Uncommon Service: How to Win by Putting Customers at the Core of Your Business

Even though we live in a service economy, many organizations see service as a low-priority operation, or a weapon for damage control, not something they go out of their way to truly excel at. But when we do experience service that goes above and beyond, it can change our entire perception of a company. We feel great about the experience, and about the organization. And we're far more likely to do business with that company in the future.

This book, "Uncommon Service," reminds all of us why we need to work on transforming our teams and organizations to be more service-oriented, and what benefits we'll see as a result. The authors take a unique approach to how organizations can do this.

Put simply, they say no organization can be good at everything. Those that try end up in mediocrity. Instead, companies need to make service their number one priority, and cut corners elsewhere. They have to be willing to be bad at something else, something their customers don't value as much, so they can be great at service, which is highly valued.

Some readers might be surprised or even shocked by the suggestion that you need to willingly let something slide in order to excel somewhere else. You might be skeptical about this approach. But once you get into the book, you might change your mind. The authors make a compelling case that this is essential to offering great service to your customers.

Providing uncommon service revolves around a framework of four "service truths." The first of these is that you can't be good at everything. So, what aspect of customer service are you going to focus your excellence on?

The second truth is that someone has to pay for it. This is the funding mechanism for your excellence.

The third truth is that it's not your employees' fault if they're not currently providing excellent service. According to the authors, many organizations have systems in place that set employees up to fail at providing excellent service. This truth focuses on how you're going to manage your employees so that everyone is set up for excellence.

And the last truth is that you must manage your customers. What kind of customer management system will you set up to manage and train your customers?

These are the four basic elements you need for great service.

And, they all work together so you can't focus on just one or two. Four of the book's six chapters are dedicated to these four truths, and the authors provide practical steps to guide you through each one.

Frances Frei is UPS Foundation President of Service Management at Harvard Business School. She designed the school's Managing Service Operations course, which is one of the most popular with MBA students.

Anne Morriss is the Managing Director of the Concire Leadership Institute, a consulting firm that focuses on helping leaders remove performance barriers.

Thanks to the authors' engaging writing style, "Uncommon Service" is a quick and easy read. If you're an entrepreneur, or in charge of any team or organization that deals with customer service, you'll find a great deal of value in this book.

One of the book's plus points is the large number of case studies, including stories from some of the world's biggest companies, such as Southwest Airlines and Zappos. These show what's possible when you adopt the four service truths, and many of the stories are really inspiring.

The authors also wisely include case studies from organizations that made bad choices and mistakes during this process. We loved that they included these as, hopefully, they'll help people avoid those same mistakes.

So, keep listening to find out how to figure out what you should choose to be great at, four methods you can use to pay for this greatness, and three patterns that can cement service into your corporate culture.

Let's go back to the surprising claim you heard a moment ago. You remember, that you can't be great at everything. This is an important part of the authors' framework, and it makes up chapter one.

The authors start out with a great story that really shows how this mindset works.

When Vernon Hill started US-based Commerce Bank in the early ‘70s, he wanted to be wildly different from his competition. Most banks back then got customers by offering the best interest rates, and they grew by acquiring other banks.

After Hill got Commerce Bank up and running, it quickly became one of the fastest-growing banks in America, despite having the worst interest rates in the industry and making almost no acquisitions. In the 1990s, its share price grew by over 2,000 percent.

The bank grew because Hill decided to be great at some dimensions of service, and bad at others. For instance, he knew that most customers hated the limited hours of banks, and the bad attitude displayed by many tellers.

So he focused first on hours. Commerce Bank was open seven days a week, sometimes even until midnight. Other banks had avoided adding hours because of the expense. But Commerce Bank could afford it because they offered such a low interest rate on deposits.

The low rates essentially paid for the convenience of flexible hours for their customers. Customers were thrilled to have the flexibility of banking when they wanted, and they didn't mind that they were earning less on their money.

This is what the authors mean by choosing to be bad at something. As long as sacrificing that thing enables great customer service, it's probably going to pay off.

So how do you know what should be sacrificed? Well, to use the Commerce Bank example, Vernon Hill knew that customers cared much more about flexible hours than they did about deposit interest rates. So, deposit rates were first to be sacrificed.

Another customer complaint was the surly attitude of most tellers. Most banks tried to find a happy medium between aptitude and attitude, in selecting their workforce. But when it came down to it, they often favored aptitude. Commerce couldn't afford to hire people who excelled in both aptitude and attitude, so they chose to hire people exclusively on their attitude.

Having a team with little or no experience in the banking industry, Commerce had to make another trade off. They didn't offer complicated investment services or dozens of different checking accounts. Those were next on the chopping block. Instead, Commerce offered a few simple services, and left it at that. This gave the employees more time and energy to focus on creating a fun and unique experience for customers.

We love this story because it really illustrates the point the authors are trying to make in this book. The idea of being weak in a select few areas in order to be great at service is a little provocative. But the Commerce Bank story shows how this concept can work well in real life.

You can start using this approach in your own organization by looking at your customers' pain points. What does your organization or industry do that drives your customers crazy?

This is a very simple question to help get you started. Addressing this concept in-depth takes a lot more time. The authors provide a detailed, step-by-step guide at the end of the chapter to help you, in a practical way, figure out what you can sacrifice in order to meet your customers' most valued service needs.

There's an especially useful step in here that the authors call Wasted Wedge. This makes sure you're not choosing to invest in a service quality or attribute that your customers don't value, or something they feel is nice to have but not truly essential.
We thought this was a valuable addition, because it's so easy to slip up and assume something is highly important to a customer when in fact, it's not. And, making the wrong decision about what you choose to invest in, service-wise, could be a grave and costly mistake.

Chapter two goes into how to fund your greatness in service, and the authors suggest four ways to do this. The first is to charge customers extra for it. The second is make cost reductions that also improve service.

Third is to make service improvements that also reduce costs. And the fourth is to get customers to do the work for you.

Let's look at the first one, which seems the easiest. The truth is that making your customers pay for service excellence is really tricky. You need to do what the authors call "palatable pricing."

For an example, let's go back to Commerce Bank. Some banks offer higher interest rates to their customers. But, they charge customers every time they need to talk to a teller in person.

Although, financially, most customers are better off with this pricing model, the reality is that people just don't want to pay to talk to someone in person. It feels like they're getting gouged. So, Commerce Bank flipped this upside down. They gave customers less money on their deposits, but didn't charge them anything for talking to tellers.

This is what the authors mean by palatable pricing. You need to find a way to fund your excellence in a way that will be palatable to your customers. The more palatable the pricing, the more you can charge and the less irritated your customers will be.

The rest of this chapter addresses each of those funding strategies in detail. And thankfully, the authors offer some insightful stories and useful tips to help you find the best way to pay for better customer service.

Chapters three and four cover the last two truths, which examine how to set your employees up for success, and how to manage your customers once you've adopted this framework.

After this, the authors take a broader view. Chapter five examines how to implement a service-oriented framework into your broader corporate culture, and chapter six looks at how you can keep this framework going even as your organization gets bigger.

Let's take a quick look at chapter five, which we really enjoyed.

One of the key lessons in this chapter is how to get everyone in your organization, not just a specific team or department, to adopt a service-oriented mindset. In order for this framework to succeed, everyone in the organization needs to realize that service is now part of the corporate culture.

Southwest Airlines has done an excellent job of this. For instance, if a plane is late coming into the gate, everyone is penalized. Because everyone is equal, and they all share the responsibility for getting planes in on time, everyone pitches in to expedite a late plane. And, this is just one reason why Southwest Airlines has so few late planes compared to other airlines. Every employee in the company feels a responsibility for providing excellent service. It's not just one team or group.

The authors say organizations that have successfully implemented excellent service into their corporate culture show three distinct patterns.

The first pattern is clarity. You must have a very clear idea about what kind of culture you want to build, and how this culture will help you achieve great service.

The second pattern is signaling. This means you consistently communicate the organization's core values to your team.

The last pattern is consistency. You need to reinforce the culture of service at every turn. And this includes correcting any misalignment between the desired culture and your organization's strategy, operations, or structure.

This can be a lot to roll out. And like every chapter, the authors provide useful strategies and tips here to help you slowly start to implement these patterns into your organization's culture.

There are several case studies in this chapter that show you what this process looks like in working, successful organizations. And there's a very insightful story in here about "calcification" that you won't want to miss.

Calcification is when your employees harden against your customers, especially those working on the front line for customer complaints, like in a call center. They begin to see customers, and their complaints, as two-dimensional, which de-humanizes the situation. If calcification happens to your employees, it's impossible to provide excellent service.

So, what's our last word on "Uncommon Service"? We really liked this book, for several reasons.

First, it provides a unique approach to the way we look at customer service. The idea that organizations should focus on customer service at the expense of something else is provocative. But it also makes sense.

The authors make a great point early on in the book when they talk about product management. People who design and sell clothes know they can make cheap clothes quickly, but often at the expense of quality. Conversely, they can make clothes using high-quality materials and techniques, but they'll have to give up on selling their clothes cheaply or quickly. Product managers know that the majority of the time, you can't have it all. You need to choose a focus, and throw something else under the bus.

The same is true in service organizations. You can't be excellent at everything. But if you choose to be great at customer service, and you're willing and courageous enough to cut something else to achieve that excellence, the dividends just might astonish you.

"Uncommon Service," by Francis Frei and Anne Morriss, is published by Harvard Business Review Press.

That's the end of this episode of Book Insights. Thanks for listening.