Keeping Customers Happy

Pages 124- 126, from Chapter 11 “Perspective” in Ingredients of Outliers

The Almighty Customer

Ask anyone in business, from the proprietor of the corner convenience store to the CEO of a multi-national corporation, what the key to the success of that business is and the answer to your question is likely to be “customer satisfaction.” Entrepreneurs and corporate executives brag about their customer service in such terms as “knock their socks off,” “outrageous,” “unexpected,” “above and beyond,” etc. The headline of a feature article in a recent issue of SUCCESS magazine (August 2012) proclaimed “The Customer Is King.”

JetBlue Airways and other organizations publish a “Customer Bill of Rights” on their websites. From others, one often hears this well-worn statement: “The customer is always right.” Marshall Field, the legendary retailing genius, understood the principle well. The story goes that he once overheard a clerk in his store arguing with a customer. “What are you doing?” he asked. “I’m settling a complaint,” the clerk answered. “No, you’re not,” said Field. “Give the lady what she wants.”

In retailing circles, there’s an often-told tale of the consumer who brought a set of tires into a Nordstrom store to return them and was given a refund, despite the fact that Nordstrom doesn’t carry tires. It may be mere legend, but it does burnish that organization’s reputation for exceptional customer service.

But not everyone subscribes to “the customer is always right” theory. For example, the Padgett Thompson Division of the American Management Association rejects it completely. In a brochure promoting its “Knock-Your-Socks-Off ” customer service workshop, the company says: “Forget it. Studies show that customers cause more than a third of the service and product problems they complain about.”

The brochure goes on to say that top-notch service professionals don’t “pretend the customer is right. They make the customer right.”

A Different View

In the late 1960s, a couple of Texans, San Antonio attorney Herb Kelleher and a colleague named Rollin King, began to talk about launching a small airline that would operate only within Texas borders, serving the cities of Dallas, Houston and San Antonio. Various legal issues delayed their plan and it wasn’t until 1971 that Southwest Airlines made its initial flight.

Kelleher had a different perspective on running a business than the typical entrepreneur has. While he recognized the importance of delivering quality service, the employee, not the customer, would be the top priority. Kelleher wisely recognized that well treated and well-satisfied employees would, in turn, treat their customers just as well.

Today the name Southwest has become synonymous with outstanding customer satisfaction, delivered by happy and often zany crew members who exemplify another of Kelleher’s core beliefs: that the words “work” and “fun” are not contradictory but complementary.

Has the perspective Herb Kelleher brought to the airline industry been successful? While one business publication described his employees-first policy as apparent “business-school heresy,” Kelleher says: “Your people come first, and if you treat them right, they’ll treat the customers right, and the customers will come back, and that’ll make the shareholders happy.” Then he adds: “We have a People Dept. That’s what it deals with, so don’t call it Human Resources—that sounds like something from a Stalin five-year plan. You know, how much coal you can mine. We say everybody is a leader, no matter what your job is.”

The results speak for themselves. As it nears its fortieth anniversary, it’s America’s largest domestic airline, with thirty-two hundred flights daily to more than seventy cities. What’s perhaps the most impressive evidence of its success is that, in an industry known for its dramatic swings between profit and loss, Southwest has posted a net profit every single year!

The perspective that Herb Kelleher, who’s now Southwest’s Chairman Emeritus, brought to the company he co-founded continues to resonate throughout the organization—and beyond. In an article titled “The Best Advice I Ever Got” in its November 12, 2012 issue, Fortune magazine reported on a small survey it conducted, asking “21 luminaries from all walks—finance, law, tech, the military and beyond—for the one piece of wisdom that got them to where they are today.”

Among these “luminaries” is Doug Parker, Chairman and CEO of US Airways. “In my case,” he said, “it’s not necessarily words of advice, but more advice I received through example. The example is Herb Kelleher, who I’ve gotten to know over the last 10 years… . He is so good at listening and has really taught me how important it is to listen to your employees.”