S3E2 The Love Your Customer and Empower Your Employees Edition with John Tschohl
James chats with John Tshohl the internationally recognised service strategist and customer service guru. He’s the founder and president of Service Quality Institute, a global leader in customer service, helping organisations keep customers build market share and improve the performance of the entire workforce, so they develop a culture of developing superior customer service.
John has authored hundreds of articles on customer service and service strategy, and is interviewed almost every week on television, radio, and by newspapers around the world. USA Today and Time and Entrepreneur magazines refer to him as a customer service guru.
They chat about loving your customer, learning from Amazon, empowering your employees, buying dog food, returning fish, amazing service recovery and of course, exceptional customer service.
James Nathan 0:54 Hello and welcome to The Only One Business Show with me your host James Nathan and today I have a fabulous guest for you, internationally recognised service strategist and customer service guru. He’s the founder and president of Service Quality Institute, a global leader in customer service. Service Quality Institute helps organisations keep customers build market share and improve the performance of the entire workforce, so they develop a culture of developing superior customer service. He’s developed a complete line of learning systems and services to help organisations create a customer service culture. His technology is used throughout the world and comes in 11 languages and many market variations. He’s authored hundreds of articles on customer service and service strategy, and has interviewed almost every week on television, radio, and by newspapers around the world. USA Today and Time and Entrepreneur magazines refer to him as a customer service guru. Please welcome John Tschohl, John, how are you today?
John Tschohl 2:02 James, I’m great. And it’s good to be with you.
James Nathan 2:04 I’m really, really pleased we can sort this out because I know you’ve not been well recently so, so hope you’re back in and in full form.
John Tschohl 2:15 I’m in full form. I had a really bad cold last week and I could barely speak.
James Nathan 2:20 Gee, well, it’s not it’s not the sort of thing you want. How’s things in Minneapolis today?
John Tschohl 2:25 It’s beautiful. We have new snow on the ground, it’s cold. So in the summer, it’s beautiful, more beautiful than the winter.
James Nathan 2:37 And you were telling me earlier before we went on air that you were across your master recently, which is a fairly wet and, and rainy part to the UK. But take us back in time, John, because you because you’ve been in the customer service world for, well, almost longer than anybody else haven’t you?
John Tschohl 2:54 Longer than anybody in the world. What happened is in 1979 I saw organisations spending a lot of money advertising, trying to bring people to their place of business. Then, when the customer walked through the door, they would issue baseball bats to the employees and it hit the customer over the head if they could to make sure they didn’t come back. And this is 1979 before most of your listeners were born, and I had a simple concept I said, if you treated a customer like a king or a queen, like royalty, a lot of business, a lot of money. And I said, Why is customer service so bad? And I decided it’s because nobody had ever been trained on customer service. In 1979, I wrote the world’s first customer service training programme. It was released in January of 1980, called Feelings it’s probably the most successful customer service programme ever been used everywhere in the world. And I thought I’d be rich
And 10 people would say, ‘you want to train employees’? Are you kidding me? And what is customer service? You know? So what I found is there was a lack of excitement about customer service. I did a lot of business. And I see the same thing happening today though, you know, there’s a brokerage company called TD Ameritrade and they must spend absolutely millions and millions of dollars every month on advertising. And about two years ago, they bought out Scottrade for like $7 billion. And so I was forced to go to TD Ameritrade and their customer service was awful. I closed every single account with, you know, within a matter of two weeks, and I see ads on TV every day. And I keep thinking do people know how bad it is? And so companies today still have unlimited money for marketing. What they don’t understand is that if you deliver this incredible customer experience, people use word of mouth, they tell all their friends, you don’t have to spend as much money on advertising and you grow at a much faster rate. That’s the principles of what I teach.
James Nathan 5:24 Do you know when you say that, we all talk about how, you know, how much more expensive it is to get a new customer than it is to hold on to what you’ve already got. But it baffles me when when you talk about things from 1979 and, and things haven’t changed. Tom, why haven’t they changed? Why haven’t people caught on?
John Tschohl 5:43 You know, I’ve never quite figured it out. I think it’s because they don’t understand the power of the service strategy. The most customer driven company in the world is Amazon. Amazon will release their financial numbers on the 30th of January. And my suspicion is they’re going to grow sales by $70 billion in 2019. That’s my estimate. I could be off. It could be 60 billion, 65 billion. We’re talking billions, talking dollars, okay. And we’re talking a lot of money, but they have a better grasp of the customer experience. And you don’t see very much advertising for Amazon. They use word of mouth. Well, they started in 1995 with two people. And they’ve grown like 100,000%. He has a better grasp of customer service, he’s more relentless than any other company in the world.
James Nathan 6:53 There are so many businesses who live and breathe by service. So if we talk about people like hospitality and airlines you would think that they would be you know, their lifeblood is how they look after people and some of the some of the hotel chains obviously extremely good at it. What have Amazon done though what are they pulled that so different and made them so good?
John Tschohl 7:15 Number one he is relentless. What I found is that companies focus on customer service for sometimes two years, one year 10 years and then they’re done. This has to be a culture it has to be a lifetime commitment. Number two, everybody at Amazon has empowered to take care of a customer to the customer’s satisfaction. Trying to get an employee to make an empowered decision takes usually two miracles. Whether it be in the UK, Europe or the US. I never had anybody at Amazon ever tell me no, ever. Amazon is not interested in short term profits. They’re interested in keeping a customer, they understand the value of great customer service. They’re very good at service recovery. So if they screw up, or there’s a perception they screwed up, they’re going to make you a whole really fast, okay? They’re not going to argue they’re not going to debate, they’re not going to say let me talk to my manager. It is absolute magic what they do. They have speed, better speed than any company in the world, they think speed they have created speed. Today, when you order from Amazon, you’re thinking of getting your product either today or tomorrow and you don’t have to leave your home. You can just go to your phone and your smartphone and buy right on the thing, you can go to your computer, you could be sitting at home naked at one o’clock at night and you can place an order and it’ll be there then next day. If you went to your local bookstore in the UK or the US naked at one o’clock in the morning you’d probably get arrested and number two, the store wouldn’t even be open and number three it wouldn’t have what you wanted anyhow. Amazon has a really good grasp of customer service as one of their strategic pillars.
James Nathan 9:25 And famously, they bought Zappos a few years ago and Zappos was one of those businesses where, you know, people talked about Tony Hsieh and what he was doing with that business. Have Amazon changed Zappos or Zappos changed for Amazon? Or, how’s has that worked?
John Tschohl 9:42 Amazon tends to buy companies that really are good at customer service. And so Zappos did not change Amazon, Amazon was very customer driven at the very beginning. And so I think that they’re just two complimentary companies that Amazon owns.
James Nathan 10:04 You mentioned empowerment there. And it’s something that is… it’s an interesting concept empowering employees because most businesses would say they want to, but then they come up with the hundred thousand reasons why they shouldn’t, you know, we can’t trust or whatever it might be. When businesses don’t empower their employees, what would you say to them?
John Tschohl 10:25 You have to make a decision on the spot in favour of the customer. If the customer is over happy, you make a lot of money. Your single goal every day should be to have over happy customers. Over happy customers are loyal, they spend more money with you and they bring their friends to your place of business.
James Nathan 10:45 So it’s not it’s not an option. It’s an absolute.
John Tschohl 10:48 There, there are too many….. All customers are different. There are too many weird things that happen every day. What you want your employees to understand is that this marketing money, take care of a customer, love the customer, give the customer what they want. We’re not talking million dollar decisions here. Typical empowered decisions for 20 pounds. It’s for peanuts, okay? But it’s like cutting off a guy’s right arm. When you ask him to spend $20 of the company money, he’s afraid that company is going to go bankrupt. He’s going be affraid the owner won’t have any money for dinner tonight. This is marketing money and what the employee does is the magic. If it has to go to the top, the whole building is burned down by the time it got to the top and number two, typically the owner, the CEO is going to give away the store. So the key is whether you got 10 employees or 200 employees. Every single person has to have a good grasp of customer service. And they have to be empowered. You have to force them or them to make empowered decisions on the spot in seconds. That’s what Amazon does.
James Nathan 12:06 How do you get those people when you’re looking at your business and you think you are we need more people into our business? How do we hire people who have that ethic who have that mindset?
John Tschohl 12:18 Well, the service leaders hire one out of 100. They’re very careful. They’re looking for attitudes. And they hire for attitudes. Most companies hire the first body that walks through, and if they got a pulse, they’re hired. So, it’s easier to train people that already love customers. The second thing is that you got to train and develop your staff, you got to spend money, building and developing your people. You could go to any university or college for the rest of your life in the UK, the US or Europe, and there’s not one university that has any courses on customer service. It’s a skill that you’re supposed to know from birth? Well, that’d be like to be a good computer programmer, you’re supposed to learn it from birth, give me a break. All these skills can be taught. It’s not complicated. Now the other mistake James, that people make is they say, you know, in the year 2000 I had 22 employees and I trained everybody on customer service. It was now 2020, 20 years later 90% of all the employees you’re trained in the year 2000 are gone. Maybe 95% if you don’t constantly keep developing your people with something new on customer service every four months, every six months you’re going to not sustain the focus and the commitment you need to drive an incredible service culture.
James Nathan 13:47 Amazon obviously a very big business with be a very deep pockets. You know, they have the ability to choose carefully. They have the ability to train well. What about smaller businesses, though? What can they do?
John Tschohl 14:00 It’s not that expensive. And you know, I’ll put a plug in for Service Quality Institute we have really inexpensive programmes that you can use to change behaviours and attitudes that can be implemented on site, that are very effective at developing the skills and the attitudes of superior customer service. And, attitude is key. You got three seconds with a customer, they can read your body language, they can hear your tone of voice, they can tell how much you care or don’t care. And then the second part of that is the skill. It’s a skill it’s not complicated. You know, wouldn’t it be nice when you walk into a place of business on the phone in person, everybody smiles? Wouldn’t it be nice if James everybody called you by your name? You know when you go to your local supermarket in the UK or the US when you go to your local dry cleaner do they call you by your name? When you walk into pick up your dry cleaning, do they say James It is so good to see you back here, let me get your order? Or did they say what’s your name? And then after you give me your name, do they ever use your name again, this is all what I call superior customer service. What would happen if you went into a restaurant? And as you walk in the hostess says, all my gosh, Mr. Nathan is so great to see you today. Welcome back. Would you like your usual table, Mr. Nathan? It doesn’t happen. Nobody gives a damn. They don’t use your name. They don’t care about the customer. You’re just a number. Okay? There’s nothing more important than a customer if you love your customer. If you train your staff to deliver an incredible customer service. You can make a change and you can spend $2,000 a year and train your whole staff with some of our programmes is peanuts. Peanuts.
James Nathan 15:57 What so why don’t I that goods have been on I hear what you’re saying, I spend my life in the same kind of arena. You know, I work with businesses, and I talk about how, you know, looking for opportunities to delight people, what stops the people in those businesses doing that?
John Tschohl 16:16 I think that the company says, you know what, if I train my people, they’re going to leave. So, that’s number one problem, so I don’t want to train my people, because if I train them, they’re going to leave. Number two, I have only dumb people working for me, I don’t pay him a lot of money. The less you pay people, the less respect you have for them. 99% of all customer content is what the lowest paid person in the company, the least valued, least trained, least respected person. So why would I spend good money if I got let’s say, I got 40 employees, training these people because they’re going to leave. I don’t pay them a lot of money anyhow. But, we have no problem spending money on advertising. We have no problem spending money on the rent, the lights, the overhead. The most valuable thing you got our high performing people and if you have high performing people money flows through the sky and you become rich.
James Nathan 17:21 I love the idea of watching money come fly through but I couldn’t. I really couldn’t agree with you more there’s so many so many things are changing in business at the moment people blame Amazon for a lot of stuff. You mentioned them before and you know they’re one of my favourite businesses to chat around because I think they do so many things so incredibly well. What can the high street, what can the, you know, the Mom and Pop, what can the shops down the road do to compete with businesses like Amazon, how can they change their focus so they exist in 10, 20 years time?
John Tschohl 17:56 I think they can implement some of the principles that Amazon has number one, your business is customer service, whether you’re a retail business or hotel or restaurant, a bank, no matter what your businesse is, if everybody understood your single job every day is to take care of your customers to treat a customer like a king or a queen, revenue will soar. Number two, you got to get whether you got five employees or two employees or 20 employees. You got to teach everybody empowerment. You got to get them to make fast decisions. To spend your money on the spot it’s the most complicated, most difficult thing in the world to do. And you gotta push people to make empowered decisions. You got to reward them, you gotta use recognition, you got to make a big deal out of it. And but without it, you’re dead. You got to use the customers name. If I had a small business in the UK on the high street. When somebody walked in, I’d say good morning. My name is John, what is yours sir? Oh, it’s James. James. Have you ever been in here before James, I’d start chatting with the guy, but I would use the person’s name. How many times have you been on the high street in the last three months and somebody uses your name, or remember you they don’t care?
James Nathan 19:20 They don’t even want you in the shop half the time. There’s a place in our village. I live in little village in the middle of nowhere in Oxfordshire. And, you know, there’s a shop in our village and if I didn’t have to go in there, I wouldn’t. The only reason I would go there because it’s the only one open. You know, the staff in there couldn’t give a damn, they really couldn’t. And it surprises me that the thing’s still running. You know, it doesn’t have any reason to exist. It shouldn’t exist. But it does. And I think only because it’s out of absolute necessity people will walk through the door there. What are the businesses that you’re seeing changing? What are the businesses who, you know, have got through this kind of cycle of looking at their service and their process, and have really, really made it great? Who’s improved that aside in your mind?
John Tschohl 20:11 Well, there’s a company called chewy.com worth about $14 billion, they’re about seven years old. And everything is built around the customer experience, taking care of your pet. People…. my wife raises her dogs. She loves her dogs more than she loves her husband. I mean, she loves her dogs and that’s true of most people that have a pet. But they’re open 24 hours a day, seven days a week. They didn’t start with, with 4000 people. They started with, you know, just a couple people, but they understand the service strategy. Companies will grow very fast if they really excel at customer service, but you’re dependent on number one change in your policies and systems to make it easy for people to do business with you have hours that are convenient to the customer. Most companies have hours convenient and days that are open convenient to the owner. You have to make sure everybody is trained on customer service. So they know how to smile. I mean, this is not complicated what I’m talking about, that they can remember the customer’s name, that they have speed. Again, you can tell in two to three seconds whether they’re excited that you’re there, or whether you’re interrupting their job. You have to teach speed. Today in the marketplace, and Amazon I think has forced more of this. People want speed, you know, Metrobank you can open an account in London, in in 15 to 20 minutes and most other banks that could take you a week or two weeks. Speed is really high value. And then you gotta really practice service recovery because every day, stupid stuff happens, bad stuff happens. In the United States 80 to 90% of all employees lie and run for cover when there’s a mistake. I teach recovery act quickly take responsibility, be empowered and compensate. What do you got that has high value, low cost that you could give away for free when you screw up? If you’re too cheap, there’s no spin. There’s no word of mouth advertising. And you want people when you screw up, just say, oh my god, this is fantastic. Okay, I can’t believe how great this company is. Instead of saying, dang, I’m never going to go back. And I would say in the United States, less than 1% of all companies can spell the two words service recovery. It’s just, it’s crazy.
James Nathan 22:59 It’s the opportunity to make an absolute raving fan isn’t it? If you can put something right in a way which makes them….. I tell a good example actually John of going into a supermarket chain here, Waitrose, I went to buy some fish food for dinner. And when I got it home, a piece of salmon, the label was out of date by a day. And so quite cross I took it back thinking oh my goodness, I’m going to drive all the way back to the supermarket. They could not overdo it, they bring you in, they give you a coffee, they go away they get the thing that you bought, they give it back to you and then they give you double your money back. And by the time that’s all happened with the biggest smile on their face, you can’t help but telling people how amazing they were and what a great thing they did. But all they’ve really done is make you smile and make your day and give you time. You talked about ease of doing business easily or ease of business there isn’t Are we just going back in time? Going back to the way things used to be?
John Tschohl 24:02 Well, that’s true. You know, see, you know, if you went back 50 years, you had one small business and they took care of their customers and today, you got companies with 100 locations or 20 locations and a 35, 40% employee turnover rate. And so things have changed, they’re faster moving. And so the level of customer service continues to get weaker, the key word is, you know, you talked about raving fans, you know, the Ken Blanchard book, you gotta wow the customer. Okay, service doesn’t get you into the game. And the example with the supermarket when they handled the problem with the fish. You’ve told probably thousands of people about that story. And maybe the extra fish cost them let’s say 10 pounds. Okay. Well 10 pounds, you know, maybe thousands of people have heard the story, for 10 pounds, if you went to your local TV station in the UK and say I got 10 pounds, I need to attract more customers. What can you do for me? They’re going to laugh okay? So, these skills are so simple, so powerful, but they absolutely work.
James Nathan 25:25 You mentioned Metrobank as well. Metrobank are a favourite of mine at the moment. Not only do they have dog bowls on the way in for your dog to have a drink, which, you know, I love dogs too. But I like the fact that you can actually talk to someone, that a manager…. you have an actual account manager, a business manager, a guy who knows you and talks to you. That kind of old fashioned style of banking is something that people absolutely crave but, no other banks are doing it. Why did they follow that lead?
John Tschohl 25:58 If you focus on the service strategy you will have anywhere between a 10 to a 20 year lead time over your competition. That means that Vernon Hill at Metrobank sat down with all of his competitors and told them what they’re going to do, why they’re going to do it, why Metrobank is going to grow, market share and rapidly grow its deposits and its accounts. Everybody would say the guy’s a crazy nut okay. And it’s ego and it’s pride. It’s too much work for some companies. You know, look at Metrobank they’re open seven days a week, they’re open Monday to Friday from 8am to 8pm. How many other banks in London or the high street are open from eight to eight? They’re open on Saturdays from eight o’clock until five, they’re open on Sundays from from 11 o’clock until, you know, like three o’clock or four o’clock and the rent from the safety deposit boxes covers most of the rent. Because if you have…. apparently people in the UK like to put stuff in a safety deposit box. They charge a lot of money I think, they’re cheaper over here, but they’re open at any hour, you want to go in. They understand customer service. So in by the way, it’s an American bank founded in the UK, you know, the investors are primarily from America. And they, they’re the number one, Amazon and Metrobank are the number one number, two customer service companies in the UK.
James Nathan 27:42 It’s phenomenal, isn’t it that these businesses are….. but we’re talking about very new businesses really in comparison with the with the old ones who really should know better. How’s it going to change as the future draws quicker and quicker toward us? You know, obviously the internet’s been a very big change in almost everything in the last 20 years. It’s changed all the way that we operate in every different walk of life. What’s the next step? What changes next?
John Tschohl 28:12 I think you need to use technology to improve the customer experience. So if I called Delta Airlines right now, we’re going to answer the phone in about 20 seconds. They’re going to say, John they’re going to use my name. I don’t have to say, can you look up my reservation it’s code number M 5369. I just like and you look at my schedule for Vietnam next month, and they got it right in front of their fingertips. We need to use technology to improve the customer experience. If I called Amazon on my cell phone right now, they’re going to say we need to verify this, is it okay if we send you a text message? And you say yes. And then they send you a text message, the text message says, Is this you calling? And you say yes. And then a live person comes on and they can do anything you want.
James Nathan 29:17 You know, I’ve noticed something with them recently actually that because that process you’ve just described seems to have even changed because I don’t think you can phone them anymore. So if you want to talk to customer service you have you press a button, which says ‘call me’ and your phone rings instantly. They’ve even made that better.
John Tschohl 29:36 But they they call you in one second.
James Nathan 29:40 Yeah, yeah, immediately.
John Tschohl 29:41 Here’s so that you got the phone you got your, you know, they can call you. They understand the customer experience. Most companies think the customer is the enemy and then make life miserable. What we’re talking about is how do you improve this customer experience so that the customer loves doing business with you.
James Nathan 30:05 Well, they love doing business with you. And they tell everybody else they know. You’ve got a fantastic business, haven’t you?
John Tschohl 30:12 That’s very true.
James Nathan 30:13 John, what’s your big, what’s your big tip? If I was to ask you for your one thing, you one big tip your golden nugget, the one thing that people could do in their businesses today to make them better today and better for the years to come. What would that be?
John Tschohl 30:28 I would say train your staff on customer service. Every single employee with something new and fresh, at least, you know, once or twice a year, become the service leader. Understand the power of customer service. If you have 10 employees or 40 employees, the strength is your employee. If that individual is awesome, you’re in good shape.
James Nathan 30:50Fantastic, John, thank you so much. It’s been lovely chatting with you. I can’t believe how fast time flies.
John Tschohl 30:56 Thank you very much, James.
James Nathan 30:56 It’s been my pleasure.