Todd Hollander Market Research

There is an excellent article in the latest issue of Strategy and Business about how successful high-end brands such as Lexus, Nordstrom, and the Ritz-Carlton Hotel Company are able to maintain consistently high levels of customer satisfaction.

Authors Robert Reppa and Evan Hirsch assert that for companies such as these, superior service — rather than superior products — is the crucial ingredient of customer satisfaction. The products are essentially the “table stakes” that get these companies in the game. Superb service is what keeps them at the table. Specifically, the authors state:

“Interviews with 40 executives at a broad spectrum of high-performing luxury brand companies confirm that what makes these luxury products truly stand apart is the superb level of service in which they are wrapped. Indeed, the services surrounding each of these brands can be viewed not only as an intrinsic part of the products themselves, but as an important differentiator of the brand.”

The article says that there are four things that nearly all top-performing luxury brands do:

1. Create a customer-centered culture.

2. Use a rigorous selection process to populate the organization with superior sales and support staff.

3. Constantly retrain employees.

4. Systematically measure and reward customer-centric behavior and excellence.

The bottom line: Superior products alone do not guarantee customer satisfaction. Superior products delivered with consistently superior service are the true measure of successful high-end companies, nearly all of which have a top-down commitment to customer satisfaction.

For more information, see “How to build a customer-centric organization: Step 1- Change the corporate culture” (April 10, 2007).

This entry was posted on Tuesday, April 17th, 2007 at 10:08 pm and is filed under Advice/How-To. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.