Why Customer Satisfaction Starts with HR

Article excerpt

There's convincing evidence that HR drives customer satisfaction-and corporate revenues-by careful attention to who is hired, how they are trained, how they are coached, and how they are treated on the job.

In a conference room at Philadelphia-based Rosenbluth International, one of the country's most successful travel agencies, a dozen new employees are participating in a customer-service training exercise. What's astonishing is that the new company associates are practicing how to provide bad customer service.

One group is asked to dream up the rudest ways a motor-vehicle bureau staff member could treat a hapless customer who comes in to apply I for a driver's license. After a few minutes of preparation, the associates perform a skit for an audience of other new employees. The trainee who plays the customer arrives at the ersatz office and stands in line. Just as he reaches the counter, the trainee portraying the clerk posts a sign proclaiming that he'll be back in 15 minutes. Other trainees make the hands move on a fake clock to simulate the wait stretching to 20 minutes, then 30, then 40. As the customer pleads for service, the clerk-who is sitting behind the counter, reading a magazine and loudly cracking gum-berates him for his impatience. The ultimate indignity comes when the customer proceeds to the license-photo area and learns that the camera is broken.

Rosenbluth's HR team uses the exercise because it's fun, but mainly to focus trainees on a serious lesson: Customer service arguably is the most critical factor in an organization's long-term success and even survival.

There was a time when customer service was seen as the responsibility of sales managers and tech-support team leaders. Today that attitude is as dated as rotary telephones at corporate call centers. Increasingly, companies are recognizing that HR plays a seminal role in building a customer-friendly culture. Throughout the business world, HR departments are focusing their efforts on improving customer satisfaction. They're using HR activities-hiring, training, coaching, and evaluation programs-to give employees the tools and support they need to develop and nurture positive, lasting relationships with clients.

The evidence is compelling that HR practices can promote customer satisfaction-and, in the process, improve corporate revenues. A landmark 1999 analysis of 800 Sears Roebuck stores, for example, demonstrated that for every 5 percent improvement in employee attitudes, customer satisfaction increased 1.3 percent and corporate revenue rose a half-percentage point.

Moreover, subtle changes in hiring or training sometimes can produce major improvements in customer happiness. One of this year's Workforce Optimas Award winners, NCCI Holdings Inc., discovered in a survey last year that its customers wanted more help in using the company's insurance data software products. As a result, NCCI created a training initiative to give its customerservice reps more technical expertise. By the fourth quarter, the surveys were showing that customers were much more favorably impressed with the reps' technical abilities. Apparently as a result, the overall customer-satisfaction rating rose 33 percent during that period, from 6 to 8 on a 10-point scale.

A company with strong customer satisfaction and loyalty can survive and prosper even when faced with a tough economy or an unforeseen disaster. The salient example: Southwest Airlines, which consistently ranks first among airlines in customer satisfaction. Following the September 11 terrorist attacks, which pushed many airline companies to the brink of demise, Southwest actually managed to post a profit in the fourth quarter of 2001, and was confident enough about the future to add new routes.

Conversely, a company that provides lousy service may have trouble hanging on to its customers over time, and thus may be forced to continually replace lost accounts that have fled in frustration. …

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