Equinox White Paper: Customer Service Benchmarking

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Here’s an old project but a very relevant one, on which I spent 10 weeks building a model of best practices in customer service. It’s as relevant today as it was when I conducted it in 2006.

The Task A Bain Consulting study showed that, in service companies, by reducing customer turnover by 5%, there is corresponding 25-100% increase in profits. Equinox was interested in investigating what best practices could be implemented in its organization to decrease turnover and improve profitability. We worked directly with the COO of Equinox and the management team to to benchmark best practices in customer service across industries. From the findings, we delivered a concise set of corporate culture principles to the implementation team, which are applicable to every customer-centric business. The Resources

  • Interviews with the Equinox Management Team
  • Malcolm Baldrige Award Winner Case Studies
  • Corporate Mission Statements: Jet Blue, Red Door Spa, Four Seasons
  • Articles by Paco Underhill/Envirosell “Opera Attendance” and “Wells Fargo”
  • Pine/Gilmore “The Experience Economy” and interview with Pine
  • Leonard Barry “The Soul of Service”
  • Frederick Reichheld “Loyalty Rules” and “Bain White Papers”
  • Adam Hanft, Inc. Magazine, “Starbucks”
  • Tim Augustinee, Inc. Magazine “Not Your Typical Employee Suggestion Box”
  • Guy Kawasaki “The Art of Customer Service”

The Process: The project duration was ten weeks and was comprised of staff interviews, operations auditing, research all available data on customer service principles. The Output: An operationally focused set of Principles, Recommendations, and Best Practices that can be applied to any organization that will reduce customer turnover and increase revenue. Principle 1: Build Personalized Member RelationshipsFact: The true measurement is repurchase loyalty, not customer satisfaction (Bain)

  1. Recommendation: Listen and Learn

Best Practices: surveys/focus groups, complaint-handling processes, operationally easy feedback processes, proper incentives for customers/employees, involvement of stakeholders in planning and design efforts

  1. Recommendation: Develop a Mission

Principles must include Genuineness, Empathy, Anticipation, Delivery, and Care and are built on humane values which include service excellence, mutual respect, honest, and integrity. Provide information to front-lines.

Principle 2: Deliver the PromiseFact: Companies which think of themselves as service providers are unprepared to compete with firms in the business of staging experiences.

  1. Recommendation: Define the “Equinox” Experience/Promise

Best Practices: personalize choice, build a distinct and recognizable voice, focus on small things, generosity, value the customer, one-to- one marketing, become a partner outside of niche in which we compete, “Better, not Bigger,” create and manage expectations, customers are IMPORTANT

  1. Recommendation: Map out the Optimal Processes

Shamelessly share information, focus on the process, not the product, employees should describe intention using phrase “…in order to,” Goal flow-down

  1. Recommendation: Execute with 100% Consistency

Best Practices: performance standards, focus on scalability, accountable employees, propagate culture, create and adhere to mission, practice “visible leadership,” develop standard processes, self-policing culture, train consistent management approach, outsource non-core functions, attention to detail

  1. Recommendation: Encourage Innovation

Best Practices: listen, encourage flat structure, hire diverse individuals, elicit employee participation, reward intelligent risk, ideas more important than source, problem-solving culture, benchmark outside of industry, reward it with cash/stock

Principle 3: Hug Your Huggers JetBlue’s Philosophy: “Treat people well, and they’ll treat the customer well.” Best Practices: growth opportunities, elicit feedback, accountability, progressive employer, employee recognition programs, train adherence to company mission, cross-train (between functions), teach the business model, alignment employees and mission, eliminate frustrating processes, be patient in hiring process, ethical practices, employee as an asset