March 23, 2020
Total Performance Leadership Blog Post #9: Customer Experience-Ten Commandments of Customer Service
Like every business that builds customer loyalty and raving fans that evangelize on their behalf, customers who come back again and again, refer their friends, relatives and random people on the street, Sewell drives its business with the Ten Commandments of Customer Service.
Bring ‘em back alive. Ask customers what they want and give it to them again and again. Systems, not smiles. Saying please and thank you doesn’t ensure you’ll do the job right the first time, every time. Only systems guarantee you that. Under promise, overdeliver. Customers expect you to keep your word. Exceed it. When the customer asks, the answer is always yes. Period. Fire your inspectors and customer relations department. Every employee who handles clients must have the authority to handle complaints. No complaints? Somethings wrong. Encourage your customers to tell you what you’re doing wrong. Measure everything. Baseball teams do it. Football teams do it. Basketball teams do it. You should too. Salaries are unfair. Pay people like partners. Your mother was right. Show people respect. Be polite. It works. Japanese them. Learn how the best really do it; make their systems your own. Then improve them.
WARNING: These ten rules aren’t worth a damn… unless you make a profit. You have to make money to stay in business, provide good service, and take care of your fellow workers. These are all the words of Carl Sewell.
Sewell says “The most important thing we ever did at our company was to decide to be the best. Long before I met my new friends in Japan, the concept of “ichiban” was important to me. Being last stuck in my craw.” This single decision by Carl Sewell in 1967 was the turning point in Sewell’s rise to prominence. Well-meaning people are often reticent to talk about their organizations striving to be the best for fear of exaggerating or using hyperbole. Make no mistake. No leader or organization ever becomes the best in their respective sector without first making the decision and the declaration to do so.
According to Sewell, making the decision to be the best made his life, and the lives of his employees, simpler, more fun and more profitable. Simpler because it ended a lot of debate. Discussions at Sewell boil down to the question: Will this make us better? If it will, and there is any conceivable way they can afford it, they do it. If it won’t, they don’t. Fun because it’s far more enjoyable to work with people committed to the same objectives. People who don’t believe they have to be the best don’t last. More profitable because customers like the way they’re treated and come back. Not only do they come back, they tell their friends relatives and neighbors about their experience at Sewell, becoming a very important element of their marketing effort.
Like every organization we’ve studied reputed for delivering great customer experience, Sewell recognizes the lifetime value of a customer. In 2002, Carl estimated that a well-treated customer would spend $517,000 with Sewell during their lifetime. Adjusted for inflation, the lifetime value of an automotive customer in 2020 is $743,394. The lifetime value of a casual dining restaurant customer can easily top $100,000 and the lifetime value of a supermarket shopper can easily top $500,000! Viewing each customer in this light should elicit a much different decision, then viewing customers based on the economic value of one transaction. It was Tom Peters who first helped quantify the true lifetime value of a customer for Carl. Peters, who wrote In Search of Excellence, insisted we stick to our knitting, get close to customers, and treat them with their lifetime value in mind. It took Sewell a while to figure out just how to do that.
Sewell questioned enough customers to learn that most people would rather go to the dentist for a deep cleaning than to have to endure a trip to the auto dealer. He found customers weren’t great at suggesting improvements but were awesome at telling him what they didn’t like about doing business with them. They didn’t like their service hours, that their employees were rude, that they had to bring their cars back to have things fixed that hadn’t been fixed right the first time, that they couldn’t have their cars serviced on Saturday, that their grounds were unclean or ill manicured, and that they were without a car when theirs was in for service.
Once Sewell got clear about what their customers hated about doing business with them, they went to work to fix the problems. All Sewell dealerships, including their service departments, are now open from 7:00 a.m. to 7 p.m. Monday through Saturday. All employee service delivery is measured and anything short of excellent service is not tolerated. Service is done right the first time and Sewell has the largest fleet of loaner cars in the business. And you don’t need an appointment to get one!
One of Carl’s biggest fears in publishing his book Customers for Life was that it would be viewed as a book for car dealerships, or just for various forms of retail. Carl learned the same thing we’ve learned in conducting our study for our Total Performance Leadership architecture, which is that learning from the best in every sector has huge value. It’s far to easy to become myopic if all we do is focus on our own industry. Carl avoided consultants who specialize in the auto industry as they often miss this important point.
Sewell created systems learned from consultants, books, magazines and from visiting other highly successful businesses. They learned from Roger Penske, Marriott Hotels, The Mansion on Turtle Creek, McDonald’s and Southwest Airlines, to name a few. They did find out who the best dealerships were, and spent time visiting and talking to the people who worked there. They copied everything they could, improved some, and built systems and measurements that track every single aspect of their business. Next week, we’ll get further into how Sewell ensures their giving customers what they want.