Being Delightful Is No Substitute for Strategy

In a recent post on Tom Peters’ site, Seth Godin wonders how we should define excellence these days.  He writes that while people used to consider quality excellent, it’s become boring.  Just meeting the customer requirement isn’t enough – no one gets excited that their water company keeps the faucet running or that the local grocer has stocked shelves.  Instead, you have to set the bar for everyone and provide unique customer service like Virgin Atlantic or Ritz-Carlton.  You have to be “so surprising, so delightful, so over-the-top and, yes, so human that there really isn’t anyone else I’d rather dance with.”

Really?  I don’t think so.

Customer service fixation

Like Godin says, this definition of excellence is a moving target.  Once you slow down and your competitors provide the same level of service, you’re no longer excellent.  In my mind, contrary to popular opinion, sometimes chasing a moving target like that is a bad idea.  Or maybe more to the point, don’t chase the same moving target everyone else is.

Let’s take Godin’s most salient example of excellence – the amazing customer service provided by companies like Ritz-Carlton, where every employee is empowered to fix customer complaints on the spot.  What if you want to provide service that’s as memorable in order to grow your business?  Well, there’s a reason that kind of service makes such an impression – people who have that kind of attitude towards customers are scarce.

So how are you going to recruit them and keep them?  How do you train them?  How do you ensure that your customer service isn’t seen as fake (like the people at my gym who have been trained to say hello and goodbye every time I come and go but are otherwise unremarkable)?  You can’t just have an inspiring idea about good service, you have to figure out how to deliver it.  Does it require spending more time on recruiting?  Higher employee pay?  A bigger training budget?  How much will it cost to resolve customer complaints in a way that makes them raving fans?  Will it mean raising prices or accepting lower margin?  Maybe.  You can’t will your company to be more delightful.  You need to have a strategy for making it happen.

And let’s say you’ve figured it all out, your service is amazing, and business goes through the roof.  What happens then?  Your competitors try as hard as possible to copy you.  They will offer your best employees higher salaries to leave, they will work on reverse engineering your training processes, and they will figure out other ways to make customers happier to keep up with you.  Take a look at Ritz Carlton, for example.  In San Francisco, TripAdvisor barely has them in the top 10% of hotels based on customer reviews, with another 20-30 hotels coming out as good or higher.  If your 20 closest competitors make people as happy as you do, are you still “indispensable”?  Still excellent?

Old-fashioned competitive advantage

There are many more ways to be indispensable than service.  Let’s look at that “boring” local grocery store down the street.  How do they stay in business?  Location – it’s more convenient to pick up stuff a block from my apartment.  Safeway?  They have a big selection and aren’t too far away.  Whole Foods – premium food, a crunchy granola brand, and usually a great shopping experience (ok, so service does make a difference).  Trader Joe’s – a unique approach to merchandising rotating private label foods that allows for low prices and unique selection.  They’re not all trying to win on the same thing.

And companies like Toyota have won and lost market share and billions of dollars on boring, old-fashioned concepts like quality, despite sometimes less than stellar reputation for service and snazzy design.

In reality, there’s often a big tradeoff to be considered between customer delight and success.  Consider the humble deli.  Zingerman’s Deli in Ann Arbor, Michigan is an amazing customer service organization and is revered around the country by people who look for the best customer service and some of the best food.  What’s the catch?  They only have one location and are basically a break-even business last time I checked.  Yet they’re indispensable to their customers.  Meanwhile, Subway has mediocre food and service yet makes over $9 billion in annual revenue.  There’s no justice in business, except by accident.

Or what if you’re an up and coming freelancer or consultant.  Should you spend 50% more time on a project to be indispensable to that client, or should you spend that time going out and finding additional clients to grow your business?  The answer is probably somewhere in between and maybe closer to the latter, something that the motivational business press sometimes fails to mention.

Sometimes you really do win based on old-fashioned competitive advantage.  Things like lower costs, barriers to entry, and all that strategy stuff do matter.

I’m not saying that companies like Zappo’s and Southwest haven’t done amazingly well by focusing on service, but making that level of service work is hardly a slam dunk, nor is it right for every company.

Strategic alignment

So what is right for every company?  Figure out:

  • Which customers you want to focus on?
  • What those customers care about?
  • What you are uniquely positioned to provide?
  • What your competitors are unable or unwilling to do?

Don’t try to sell to every customer.  For every flyer who swoons over Southwest’s folksy charm, there’s a business traveler who wants stodgy lounges and frequent flier miles instead.  You can’t please everyone, so pick a segment and stick to it.

Figure out what they want more than anything else.  If you’re selling to purchasing agents, it might be price.  For engineers, it might be quality.  For time-starved professionals, it might be convenience.  You’ll know you’ve hit the right thing when customers buy more from you as a result.  If it doesn’t affect their buying behavior, it’s not that important.

What can you be the best at?  If you’re not a people person, it’s probably not cheery service.  But maybe you’ll be the most reliable.  Maybe you’ll just be open 24 hours.  But whatever it is, it has to fit with your personality, talents, and ideally background.  If you’ve spent 10 years as a reporter, starting your own interior design business is going to be a bigger hill to climb.  Passion still trumps experience in the end, but be careful about knowing what you’re doing.

Finally, pick something that can’t be copied.  Of course, nothing’s ever completely unique.  But if 20 of your competitors start doing exactly the same thing you are (or even worse, you copy what they’re already doing), the odds aren’t good.  Articles about great companies focus on a handful of things, but the secret is that every decision in the company is focused on achieving the same goal.  Every process, every hiring decision, and every analysis is aligned towards that goal.  That kind of alignment is what competitors have the hardest time copying, and it’s what leads to sustainable success.

If you can get all these answers to match up, you have a great shot at being indispensable.  And you might be indispensable for boring reasons, but it won’t matter.

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