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JOHN R. DIJULIUS III is considered the authority on customer service and President of The DiJulius Group, a consulting firm that helps companies differentiate themselves through superior customer service. He is also the owner of the John Robert’s Spa, a chain of high-end salons and spas repeatedly selected among the top twenty in America. For more information, visit www.thedijuliusgroup.com.

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Business has never been tougher than it is today. Are you competing on price or service? The only companies surviving with long-term sustainability are the ones fanatical about differentiating themselves through the customer experience they deliver.

The companies that focus on delivering a world-class customer experience not only have higher sales growth, a stronger bottom line, and lower employee turnover, they also have a distinct competitive advantage in their marketplace. What’s the Secret? presents an in-depth, inside look at the world-class customer service strategies employed by the world’s most customer-friendly companies.

Top customer service consultant John DiJulius has spent his entire career cracking the code to learn how organizations can deliver world-class service. Now he reveals the proven strategies and principles of world-class service companies like Disney, Nordstrom, and The Ritz-Carlton. While even small companies often struggle to deliver adequate customer service on a regular basis, these companies manage to align tens of thousands of employees to deliver consistent top-class care and service to every customer.

No matter how small or large your business―even if you only manage yourself or a small department―the best practices you’ll find in What’s the Secret? will change the way you serve customers and lead to long-term excellence. You’ll find the proven steps, best practices, and service standards that you need to build a customer service machine that delivers day-in and day-out. You’ll learn how to attract and retain a high-quality customer service workforce, measure customer satisfaction, and create a culture that routinely finds ways to go above and beyond for your customer.

No matter what you do, customer service excellence is the indisputable key to long-term business success and the only way to make price less relevant to your customers. Provide a world-class customer experience and dominate your market.

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Business has never been tougher than it is today. Are you competing on price or service? The only companies surviving with long-term sustainability are the ones fanatical about differentiating themselves through the customer experience they deliver.

The companies that focus on delivering a world-class customer experience not only have higher sales growth, a stronger bottom line, and lower employee turnover, they also have a distinct competitive advantage in their marketplace. What's the Secret? presents an in-depth, inside look at the world-class customer service strategies employed by the world's most customer-friendly companies.

Top customer service consultant John DiJulius has spent his entire career cracking the code to learn how organizations can deliver world-class service. Now he reveals the proven strategies and principles of world-class service companies like Disney, Nordstrom, and The Ritz-Carlton. While even small companies often struggle to deliver adequate customer service on a regular basis, these companies manage to align tens of thousands of employees to deliver consistent top-class care and service to every customer.

No matter how small or large your business-even if you only manage yourself or a small department-the best practices you'll find in What's the Secret? will change the way you serve customers and lead to long-term excellence. You'll find the proven steps, best practices, and service standards that you need to build a customer service machine that delivers day-in and day-out. You'll learn how to attract and retain a high-quality customer service workforce, measure customer satisfaction, and create a culture that routinely finds ways to go above and beyond for your customer.

No matter what you do, customer service excellence is the indisputable key to long-term business success and the only way to make price less relevant to your customers. Provide a world-class customer experience and dominate your market.

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What's the Secret?

John Wiley & Sons

Chapter One

You can have a great product, but it takes world-class service to create brand loyalty.

Based on extensive research, interviews, and analysis of various businesses, The DiJulius Group has determined the following trends in levels of customer service:

Level Description Companies (%)

1 Unacceptable 12

2 Below average 29

3 Average 38

4 Above average 18

5 World class 3

According to this study, 41 percent of companies are operating at unacceptable (1) or below average (2) levels of customer service, while 38 percent of companies are delivering average customer service (3). If you total that up (1, 2, and 3) 79 percent of the companies provide a level of customer service which is average at best. Which leaves us having a good customer experience about one-fifth of the time (level 4) and we only have an exceptional experience with 3 percent of the companies we deal with (level 5).

You can say what you want about who you (think you) are, but people believe what they experience. -Jack Mackey, Vice President, Service Management Group

In Denial

Think about your business, what level of customer service does your company deliver? Now, from a customer's perspective, reconsider your answer. The sad truth is that the majority of businesses rank their customer service higher than their customers rank them. The following research reveals how much companies are in the dark about the level of service they are providing.

Bain & Company, a business consulting firm, surveyed customers of 362 companies and found:

Only 8 percent of customers surveyed described their experience as superior.

Yet, 80 percent of the companies surveyed believe that the service they provided was indeed superior.

How can 80 percent of the companies think they are providing superior service, but only 8 percent of their customers agree with them? Who's right? The customer!

These findings are very similar to those uncovered by The DiJulius Group. Thousands of companies have taken our Company Service Aptitude Test (C-SAT), which is a detailed, self-assessment survey that managers take to find out what level of customer service they deliver. The C-SAT has proven to be an accurate indicator of the company's customer service level.

Prior to taking the test, participants are asked to rate their company.

In this pretest question, approximately 53 percent of participants rate the quality of their service at one to two levels higher than the level determined by the C-SAT. You can take the C-SAT by visiting www.thedijuliusgroup.com/SAT. It is also discussed in detail in Chapter 4, Levels of Customer Service.

Perception Is Reality

The majority of companies don't realize the level of customer service they are delivering or that their own standards for good customer service are considerably lower than their customer's standards.

Could They Be Us?

After I speak about how to improve customer service, several people line up to tell me their personal horror stories, offering me material for my next book. I constantly hear things like, "You wouldn't believe how bad they treated me." and "Listen to what they did." This begs the question: If all of us agree and nod our heads at how bad they are at customer service, then who are the they? The answer is: They are us! We all can't be the victims. We need to assess our own businesses and accept that there is a good chance we and our companies are contributing to the crisis in some way.

No one will argue that there is a customer service crisis and that the majority of businesses do not make customer service a priority in their hiring, training, or treatment of their customers. Why is that? The answer: Because providing excellent customer service is a lot of work. It means you have to have systems, processes, hiring standards, training, and service recovery protocols in place. It is much easier for an entrepreneur, who is very educated and skilled at his profession, to open a business, hire some people, and start operating. Many assume that providing customer service is common sense: Just take care of the customer. Most organizations make significant investment in customer service a very low priority and it is the first thing that is cut out of the budget when times get tough, not realizing the major impact it has on the bottom line.

Customer Service and Its Impact on Sales

Is an investment in customer service really worth it? How does the level of customer service a company delivers truly impact key drivers such as customer retention, sales, profit, cash flow, stock prices, employee turnover, and a company's vulnerability to fluctuations in the economy and third-party conditions (i.e., gasoline prices, housing market).

Customer Satisfaction and Stock Prices

In an article from the American Management Association's Journal of Marketing, January 2006, titled "Customer Satisfaction and Stock Prices: High Returns, Low Risk," author Claes Fornell asks the question, "Does an investment in customer satisfaction lead to excess returns?" The empirical evidence presented in the article suggests that the answer is yes! Let me repeat that:

The empirical evidence suggests that an investment in customer satisfaction does lead to high returns at low risk.

Claes Fornell, is the director of the American Customer Satisfaction Index (ACSI) and a professor at the Stephen M. Ross School of Business at the University of Michigan. ACSI is a leading indicator of consumer behavior, measuring the satisfaction of consumers across the U.S. economy. Extensive research proves that an increase or decrease in customer satisfaction, not only greatly impacts each individual organization, but has a significant impact on the future health of the economy.

Equally amazing, the author's findings suggest that satisfied customers are economic assets with high return and low risk. The study also proved that the leading ACSI companies consistently outperformed the market by considerable margins.

It is conclusive that organizations that consistently deliver superior customer service generally enjoy more repeat business, less price elasticity, higher price points, more cross-selling opportunities, greater marketing efficiency, and a host of other factors that usually lead to earnings growth. These companies also enjoy lower expenditures related to warranties, complaints, defective goods, higher employee satisfaction, and market share. In addition, several research studies find that higher customer satisfaction has a positive impact on employee loyalty, cost competitiveness, profitable performance, and long-term growth.

These findings are consistent with previous studies that revealed that companies with...