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  • Customer loyalty is a powerful driver of organizational success, and losing a customer is highly detrimental to a companys bottom line. It can cost six to seven times more to gain a new customer than to retain an existing one. One of best ways that leaders and front-line employees can improve their organizations customer loyalty numbers is by looking at the customer service moments of truth that occur daily within their work teams and departments.Moments of truth was first coined by Jan Carl-zon when he set out to create a customer-focused culture as president of the Scandinavian Airlines System (SAS). For Jan Carlzon, a moment of truth was Any time a customer comes in con-tact with anyone in our organization in a way that

    they can get an impression. How do we answer the phone? How do we check people in? How do we greet them on our planes? How do we inter-act with them during flights? How do we handle baggage claim? What happens when a problem occurs? For Carlzon and other great service provid-ers like him, moments of truth included every detail even coffee stains. For example, former People Express Airlines chairman Donald Burr contended that if the flip-down trays were dirty, customers would assume that the planes engines were not well maintained either. Both of these leaders knew that everyone in their organiza-tions in each and every role contributed to a customers perception of the overall quality of the service that the airline was providing.

    Create Devoted CustomersCultivate Customer Loyalty from the Bottom Up

    by Ken Blanchard

    MORTGAGEPLANNER

    SUCCESS SERIESCurtis McNeillCurtis McNeillCurtis McNeillCurtis McNeill512-335-6601

  • The Leaders RoleHow can you encourage and empower people to

    serve customers at a high level and realize that they can and do make a difference? Begin by focusing everybodys energy on making customers the first priority.

    Jan Carlzon and his company, SAS, serve as a good example of what an organization committed to providing legendary service can do. Carlzon sought to make SAS the top business airline in Europe. To achieve this, he focused on clearly establishing and com-municating the vision, values, and direction he wanted everyone in the company to have. In this sense, he established expectations and then used the traditional organizational pyramid to commu-nicate that information to all employees in the company.

    Invert the Traditional PyramidWhen it came time to implementing the vision, however,

    President Carlzon turned the pyramid upside down so that the employees were on the top and management was on the bottom. By inverting the pyramid, top management became responsible for facilitating support and providing encouragement for the employees who were serving and working for the customer.

    The traditional pyramid hierarchy must be turned upside down so that the frontline people who are closest to the custom-ers, are at the top. In this way the frontline people can be respon-sible able to respond to their customers. In this scenario, the leaders serve the frontline people and are responsive to their frontline peoples needs.

    Take Care of the People Who Take Care of Your Customers

    If the leaders in an organization do not respond to the needs and desires of their people, these employees will not take good care of their customers. But when the frontline customer-contact people are treated as responsible owners of the companys cus-tomer service vision, they can serve customers at a high level.

    The experience of a large U.S. bank The Ken Blanchard Companies recently partnered with exem-plifies this concept. In working to maintain employee engagement, build customer loyalty, and execute rev-enue growth strategies, leadership at the firm decided to focus on the two key assets their employees and their customers.

    For the banks leadership this meant committing to a leadership and coaching model that promoted two-way dialogue to enhance the relationship between leader and employee. Special emphasis was placed on Partnering for Performance, which opens up com-munication between managers and direct reports by increasing the quality and frequency of conversations. Leaders adopted the philosophy that leadership is not something you do to people, but something you do with people.

    The result? Managerial skills effectiveness ratings improved from 63% before training to 99% after train-ing. Leaders began to realize that employees who had their needs met more effectively responded by serving customers at a higher level. And earnings increased across the board: a 50% increase in small business loans; 44% increase in commer-cial deposits; 25% increase in consumer depos-its; 21% increase in consumer loans; and 21% increase in net income.

    Take Care Or Someone Else WillIf you dont take care of your customers today,

    somebody else is ready, willing, and able to do it. The only thing your competition cant steal from you is the relationship your people have with your customers.

    Organizations that have excited and pas-sionate people are more likely to provide great customer service. In order to create a passion-ate, customer-focused workforce, organizations must treat their people well so they, in turn, will treat the customer well. Empowering peo-ple and allowing them to act as owners of the customer service experience is an essential step for leaders. When leaders take care of their cus-tomers and create a motivating environment for their people, profits and long-term financial strength follow.

    MORTGAGEPLANNER

    SUCCESS

    Copyright 2008 Mortgage Planner. All Rights Reserved.

    Ken Blanchard

    is the author of

    numerous books

    including The One

    Minute Manager

    and his latest,

    The One Minute

    Entrepreneur.

    Learn more at www.

    kenblanchard.com.

    Curtis McNeillCurtis McNeillCurtis McNeillCurtis McNeill

    Certified MortgagePlanner

    Blueprint MortgagePlanners1420 Cypress Creek200-191Cedar Park TX 78613

    curtis@blueprintmtg.com

    One of the greatestcompliments I canreceive is a personalreferral to one of yourfriends who maybenefit fromprofessional mortgage