Real-World Customer Service

Inc. surveyed 13 CEOs to learn how they keep their customers happy and ensure good customer service.

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Inc. surveyed 13 CEOs to uncover the truth about all those clichÉs the so-called experts keep reciting. Surprise -- the customer isn't always right

This is a test.

Everyone at the seminar is busily taking notes. The customer-service expert is sharing an inspirational tale about a taxi driver who serves fresh fruit and has a client list longer than your arm. His stories take you back to your early days, when everything seemed simple: you and your customers -- pals forever. The speaker's words echo in your head: exceed expectations, and you'll have a customer for life. . . . Back at the office, your bookkeeper informs you that a chronically miserable customer is 120 days in arrears -- again.

Do you (a) demurely inquire what more you should be doing to delight this client? (b) furiously demand to know what right this deadbeat has to mess up your cash flow? or (c) none of the above?

It's not easy to strike a balance between what you do to survive and what the experts propound. Thanks to a congestion of management consultants relentlessly parroting old saws, customer service has come to mean everything and nothing at all. And too many people have run into serious difficulties when the glib formulas of those experts break down under real-world conditions. To transcend the truisms, Inc. spoke with successful company builders from Manhattan to Madill, Okla. Their businesses, with sales ranging from less than $1 million to more than $22 million, are outstanding in industries as diverse as dentistry and plastics manufacturing. The women and men who lead those companies have learned to make the clichÉd rules of good customer service work for them.

ClichÉ: "The customer is always right."

Yes, but. "Often customers know what they want but don't know how to convey it," says Bess Herzog, founder and chief executive of $3.9-million Topique Associates Inc., a Houston construction company. "Our challenge is to interpret their wishes and figure out whether we can fulfill them." Herzog forges ties with her customers' architects, who are just as important to her as her customers are, she says.

Once upon a time. "Before I started this business, I was inclined to think that the customer was always right," says Rachel Hubka, president of $3.5-million Rachel's Bus Co. "Now I take exception." She started her school bus service on the streets of Chicago's West Side, hoping to make a dent in unemployment. She embraced customer service -- providing spotless buses, computer confirmation of orders, and well-trained drivers wearing suits and ties -- to stand out from the 35 other school bus companies in Chicago. But margins remained as thin as her picky first-grade passengers.

So recently she said good-bye to one on-again, off-again, demonstrably wrong customer. That school owed her $1,800 and refused to pay up. And it wasn't just the money. Teachers at the school sometimes left their charges unsupervised. Still, the decision was a real handwringer. "It really hurt, because it was a community school," Hubka says.

Both untrue and untenable. It would be impossible to make decisions if all customers were right all the time. "Some customers are more right than others," suggests George Riggs, president of Embroidery Services, in Erlanger, Ky., which last year sold $10 million worth of embroidered clothing to resort gift shops, up from $600,000 worth in 1989.

"Twenty percent of our customers dictate what the rest of the world gets." He knows he can't please everyone. "That's why we have competitors. Gee, I sound callous as hell. Yes, I do mind losing customers." He explains, "It's a fine line we walk. A lot of our designs and colors are requested by customers, but no one customer dictates. If 5 out of 10 say something, we listen. That's called market research." But even though 85% of sales come from just 20% of the designs, Riggs stocks 600 designs.

Absolutely wrong, but the customer doesn't need to know that. "We often have to sell our solution, tactfully, without saying, 'You're wrong!' " says Bob McAdams, managing partner at Carneiro, Chumney & Co., a $3.5-million accounting firm in San Antonio. "There are a lot of gray issues in accounting, especially in tax matters."

Craig Carrel, cofounder of $4.5-million Team One Plastics, agrees. "We make sure customers at least feel they're always right." Team One, in Albion, Mich., makes parts for automobiles and medical devices. "If a customer is blatantly wrong, we won't let it slide. But we try to see it as an opportunity."

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