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Focus on 'Moments of Truth' for Customer Loyalty

March 08, 2010
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There is perhaps no greater customer service story than the remarkable true account of Jan Carlzon and the business turnaround around that he led as the president of Scandinavian Airlines.  

In 1981, Scandinavian Airlines reported an $8 million loss and the future of the company looked bleak at best. When the then president resigned, the board of directors promoted Carlzon to the position. In less than two years, Carlzon turned that negative $8 million into a gross profit of $71 million – an extraordinary gain of $79 million!

How did he do it? And, more to the point, what does this have to do with customer service?

Everything.

Unlike the conventional “we need more sales” approach, Carlzon’s brilliant, yet simple plan was to re-focus the organization on their most important asset – existing customers!

Carlzon made a business case that SAS already had 10 million passengers per year and, if they did a more effective job in managing those existing relationships, they could turn the airline around and prosper. Doing the math, he reasoned that the average passenger came into contact with five SAS employees during a single transaction with the company. He called these encounters “moments of truth."

According to Carlzon, “a moment of truth is an episode in which the customer comes into contact with any aspect of the company, however remote, and thereby has an opportunity to form an impression.”

Carlzon recognized that each customer contact is a unique, unrepeatable opportunity for a company to differentiate itself from the competition. In the case of SAS, he made it his job and Number One priority to proactively manage those 50 million unique customer contact experiences.

No doubt you’ve heard the phrase, "You never get a second chance to make a first impression." That being the case, the first moment of truth takes place as soon as the customer walks in the front door of your dealership. This introduction sets the tone for the rest of the experience, and if the customer perceives it as lousy or unwelcoming, you are leaving the door open to competitors who would happily invite your customers in and take away your business.

Very often it all comes down to providing genuine hospitality. Simple gestures like making direct eye contact, smiling and speaking in a positive, enthusiastic manner will normally produce a feeling of customer satisfaction. Customers that feel valued and appreciated from the very start will have a strong tendency to return for future business.

It is important to remember that service and sales go hand-in-hand. In every service opportunity there is a sales opportunity, and in every sales opportunity there is a service opportunity.

At the helm of Scandinavian Airlines, Jan Carlzon did not set out to specifically generate new business, although that was an anticipated (and welcomed) by-product of the positive word-of-mouth created by his Moments of Truth campaign.

In today's competitive marketplace, service is the most important thing a company has to sell. It differentiates companies when they have the same product, such as is the case with tire and auto service businesses. Every decision should be made with the customer in mind and viewed as another opportunity to make a favorable impression.

The benefits of providing exceptional customer service are clear. Unfortunately, failure to satisfy a customer on any Moment of Truth can quickly ruin the customer’s memory of high quality service; even the most delicious meal isn’t very good when service is poor because poor service leaves a bad taste in your mouth.

Your shop’s appearance can be sparkly beautiful and your product displays perfect, but when service is substandard, the customer experience will be perceived as mediocre at best.

Exceptional customer service is not a one-time event; you have to be consistent. It is only as good as your last encounter. Like a Broadway show, it is a production, and it goes on stage every day at the same time. It's live and there's no rehearsing.

To secure customer loyalty and referrals that boost sales and profitability, remember your Moments of Truth and give every customer interaction the special attention it deserves!


An avid auto enthusiast with a fondness for American muscle cars, Steve literally grew up in and around his family's auto service business in Massachusetts. Today, he is the CEO and Trainer of Champions of Sale Away LLC. Steve has over 20 years of successful sales, sales management and sales training experience. He was featured in Tire Review's January 2010 cover story, "Deliver World-Beating Customer Service" and has been a featured speaker for numerous tire dealer association conventions across the country.

As the producer and host of the Pinnacle Performance sales and customer service training program for the tire/auto service industry, Steve has received national acclaim for teaching independent tire and auto service businesses how to improve customer relations and produce greater sales results. To learn more about the program, click here. Ferrante can be reached directly at 866-721-6086 ext. 701 or via e-mail at steve@saleawayllc.com.

 

Submit a Comment   Legacy Comments
avatar   ELMER WOODARD   star   3/19/2010   8:27 AM

WITHOUT CUSTOMER SERVICE THERE IS NO SERVICE



avatar   Burke James   star   3/9/2010   1:15 PM

Great success story. Now I'm going to smile and sell something! Thankyou- Burke