FEBRUARY 2007 :: COVER STORY : BIG BUSINESS

'The Voice of the Customer'
Businesses Redefine Service, Stressing Relationships, Value and Experience

BY KEMBA J. DUNHAM
Staff Reporter of The Wall Street Journal

Traditionally, many businesses have defined customer service with a simple mantra: "The customer is always right."

But over time, customer service has evolved. Deferring to the customer is still part of the relationship, but in an increasingly competitive marketplace, many businesses aren't waiting for their customers to make a complaint or have a query. They're doing their best to figure out what the customer wants and to provide it before any questions or problems arise.

"Customer service can be defined in lots of different ways," says Chris Denove, a vice president at J.d. Power & Associates, a company that conducts customer-satisfaction surveys. "It's being broadly defined more and more as the voice of the customer."

'A Sense of Responsibility'

At JetBlue Airways, for instance, customer service is simply defined as "anticipating the customer's needs," says Eric Brinker, director of brand management and customer experience. One way the company tries to achieve that is to instill in all its employees a sense of responsibility for customer satisfaction. There is no department at the airline called "customer service," says Mr. Brinker, because every person and every department should embody the term. "We are a customer-service company that happens to fly airplanes," he says.

To help ensure that the company consistently has its finger on the pulse of what its customers want and need, JetBlue surveys at least six customers from every flight it operates. The airline brings together top executives to discuss what customers are saying and how it should respond. "From the CEO down to the manager level, we are very engaged in operations," says Mr. Brinker.

One thing JetBlue learned by surveying its customers is that when its pilots stand in the aisle in the cabin to talk to passengers over the plane's public-address system, the response is extremely favorable-especially when the pilot appears at the beginning of the flight or when there is some kind of delay. As a result, new pilots are now taught how to address passengers, including practicing announcements as part of their training in flight simulators. And every JetBlue pilot is given a printed guide to making announcements.

Pulte Homes, which in recent years has won more awards in J.D. Power's annual survey of customers than any other new-home builder, measures how well it's doing with customers by tracking them over a long period of time. The builder first surveys buyers to get a feel of what the experience was like immediately after they bought their home. Then Pulte circles back to the buyers several years later to make sure they are still happy. Erik Pekarski, national vice president of customer relations at Pulte, says such tactics have helped Pulte's repeat and referral business grow to 45% of the company's revenue from 20% in 2001.

'Get It Right the First Time'

When Pulte wasn't satisfied with the marks it was getting from customers for overall satisfaction in 2001, it created a customer-relations department of 1,200 people and established a program to ensure that it paid closer attention to its customers' desires throughout the sales and building process. The ensuing jump in repeat and referral business is "proof that the stronger relationship increases our bottom line," Mr. Pekarski says.

Pulte does its best to correct problems that arise, but focuses on preventing them. That focus is embodied in its use of the term "customer relations" instead of "customer service."

"Service is reactive as opposed to proactive," says Mr. Pekarski. "It's not like we don't find things wrong and fix them-we do-but we're more interested in getting it right the first time."

Personal-computer maker Dell also shuns the term "customer service," choosing to focus on what it calls "customer experience."

"When you say customer service, sometimes people think that means, 'Oh, my computer broke, let me call tech support,'" says Laura Bosworth, world-wide director of customer experience strategy at Dell. "But the 'experience' includes your ordering process, was it easy to get online, was it easy to set up, the whole usability of the product and was it reliable over time. We think of all that."

Of course, as much as companies focus on trying to prevent problems from ever cropping up, things sometimes do go wrong. So achieving the optimal customer experience still means making things right when there's a problem with a company's products or services.

Dell says it has dedicated an incremental $150 million in the current fiscal year to improving its customers' experience with the company. And most of that money was allocated to improving problem resolution, by hiring additional customer-support agents, expanding the training of existing agents and opening new customer-support centers around the world, among other steps.

That effort was quickly tested when the company discovered that millions of batteries in laptop computers it had sold were potentially defective.

This was a particularly sensitive moment for Dell, because the company's image had slipped in recent years, partly because of technical-support problems. So Dell took great pains to show that it was on top of the problem. It was the first computer maker to recall the batteries in question, which were made by Sony and were used in laptops from several laptop manufacturers.

While Dell officials feel the company handled the situation responsibly, Ms. Bosworth says they try never to be satisfied that the computer maker has perfected its relationship with its customers. "We're a company who never feels like [we] are there," she says.

No Service Is Good Service

To some extent, different business models call for different approaches to customer service. Consider Costco Wholesale, whose warehouse-style outlets are stocked with items sold in large quantities at discount prices.

George Whalin, president and chief executive of Retail Management Consultants, says Costco customers really don't have a "typical" customer-service experience. "Those customers love Costco, even though they never talk to a soul," he says. "Those customers define customer service in a different way: It's about finding bargains and getting good value."

Richard Galanti, Costco's chief financial officer, concurs, though he says the company pays more attention to customer service than it may appear.

"The expectation is that there is no service at Costco, since people come in and expect a warehouse facility and not a lot of people standing around saying, 'Can I help you?'" Mr. Galanti says. "But clearly if you need help, there are people there to help you."

But in the end, he says, "our view of customer service is self-service." And, he adds, Costco stores often get very high ratings for service, because people feel they're getting their money's worth.