Posted on January 27, 2010 by Dennis Snow
I recently had the opportunity to work with Family Video, the largest privately owned movie and game "rentailer" in the United States, and third largest overall, with 612 stores. In an industry struggling to deal with significant changes, such as new rental options offered by Netflix and Redbox, Family Video is the only DVD/game rental operation showing positive growth. Expanding continually, they again achieved record profits last year.
Why is Family Video doing so well as others in the industry struggle? First, they are constantly looking for ways to offer increased value to their customers. Free children's movies and innovative new release promotions draw current and new customers to the store. I believe, however, their biggest advantage is the way they've crafted the customer experience. Each element of the experience has been studied and designed to maximize customer satisfaction.
One of my favorite examples is the Family Video policy to "diffuse first, educate second." This means that whenever a customer problem occurs, such as a disputed late fee for a DVD, employees are expected to first make the customer happy (diffuse the situation), then explain the policy (educate).
For example, sometimes new members are confused about late fees for DVDs and games. If a customer complains, employees are empowered to waive the late fee, which they immediately let the customer know. After diffusing the situation, the employee then explains the policy. Now they have a happy customer who understands the policy. (Their computer system can indicate if someone abuses the system).
The approach may appear subtle, but it is profound. Think about it; usually when customers complain about a policy or perceived injustice from an organization, the first thing that happens is an employee explains the company policy. Internally the customer gets tense, builds their argument, and waits to present their case. When the employee then says something like, "I'll do it for you this time," the customer feels as though they've been chastised (like a child), and that they should be grateful to the company for agreeing to wave their policy. (Isn't it amazing how many companies act as though the customer should be grateful for the privilege of spending money with the company?)
The Family Video approach turns the situation around. The tension is immediately diffused because the employee first takes care of the problem. Now when the policy is explained, customers listen because they're not crafting their argument. Again, subtle but profound.
The impressive thing about Family Video is that approaches like "diffuse first, educate second" are built into the organization's culture (I've provide just one example). These touches are not just desired of employees, they're expected. Therefore Family Video is relentless in training and reinforcing their special touches, and they're fanatical about hiring employees who embrace such a customer-centric approach.
What's the result of their efforts? As mentioned earlier - expansion as well as record profits in a "declining industry." Not a bad return on their investment in the customer experience.
The lesson here for me is about bridging the gap between the science and the art of customer service. The science of customer service tells us that service recovery (in this example) is important for creating strong customer relationships. The art, however, digs deep into the how of what we do. The art asks, "how can we create the strongest emotional connection with what we do?" World-class service organizations don't just teach the science of service, they help employees perfect the art of customer service.
Organization's often make the mistake of looking for the holy grail customer service practice that will rocket them past competitors. It just doesn't' work that way. Great customer service isn't the result of one big thing; it's the result of many little things done extremely well.
Suggestion: Take a look at your organization's approach to service recovery. See how you can apply "diffuse first, educate second" to your approach.
Suggestion: Look at one of your customer service practices and brainstorm the art that can take the science of the practice to a new level.