Since this week is dedicated to the launch of our new eBook, 7 Secret Customer Service Techniques Every Expert Knows, I wanted to share with you an excerpt from the book.
The excerpt below comes from Secret Technique #7, which focuses on the importance of valuing customer relationships and techniques to build these relationships.
I hope you enjoy!
The Ritz-Carlton Will Spend $2,000 To Make You Happy
“Known as one of the gold standards of customer service, the Ritz Carlton has been rightly studied and dissected over the years in an attempt to find the “secret” Ritz sauce. Entire books have been written just on the Ritz’s customer service.
One aspect of the Ritz’s service that has received a lot of coverage is the fact that the Ritz empowers its employees to spend up to $2,000 to solve customer problems without asking for a manager. Yes, you read that right, Ritz-Carlton employees can spend up to $2,000 per incident, not per year, to rescue a guest experience.
What is interesting about this famous number is that the majority of authors who mention it leave out an equally vital statistic. You see, the $2,000 is always mentioned in the context of how important employee empowerment is to great customer service — as if empowering employees to excess is the key to a profitable and successful business.
What the authors often leave out is this: the average Ritz-Carlton customer will spend $250,000 with the Ritz over their lifetime.
Like any smart, profitable organization, the Ritz did not pull the $2,000 figure out of thin air. The Ritz has studied its customer base and understands the value of the relationship with their customers and what they are willing to do to maintain those relationships. Put in that context, the $2,000 does not seem so hard to conceive.
The Ritz Carlton values relationships over transactions, and for anyone who has ever stayed at one of their properties, that is no secret.
Knowing that your business probably doesn’t have a $2,000 per-incident budget for service recovery, it’s important to focus on how your business can use the same principle to your advantage. It begins by embracing the idea of a relational approach over a transactional approach.
When businesses do not approach customers transactionally, when they do not attempt to extract every possible advantage from their customers, those businesses are rewarded with loyalty and a customer relationship that is worth far more than any individual transaction.
What do you think of the Ritz’s $2,000 concept?