The Million Dollar Greeting. Dan Sachs

that continues every day for as long as the company is in business. This is one of the many philosophies you will encounter throughout this book. Great organizations do not stop after the initial training is over; success is an ongoing, iterative process that is expensive initially but pays off tenfold over the long haul by developing and then keeping loyal customers.

      For example, at Lettuce Entertain You Enterprises, a 150-venue restaurant group profiled in this book, there is a daily staff meeting before each meal service. Expectations for the day are outlined, VIP customers identified, new menu items discussed, and so on. This daily, ten-minute, customer service training session happens at every Lettuce Entertainment restaurant, in more or less the same way, every day, across the country.

      Fortunately for the rest of us, the standards and practices highlighted in this book can benefit organizations beyond the hospitality sector. The companies profiled in this book, such as Lettuce Entertain You, Union Square Hospitality Group, and Hyatt, are industry leaders and have been for a long time, but their methods are universal. These companies have developed sophisticated tools to ensure that each of their customers feel valued and appreciated, but these tools can be adopted by any company that wants to improve their customer service.

      Some might argue that as technology streamlines our relationship to products, hospitality is less relevant, but I think the reverse is true. In our impersonal world, our natural need for recognition and appreciation makes the need for empathy and action that much more critical. Loyal customers are profit-driving customers. Loyal customers spend more over time and require little, if any, incentives to return again and again for the same quality and the same service. That’s why my experience with the mattress is so illustrative. If the company had solved my problem after the first phone call, they would have earned a customer for life instead of losing one.

      Through a series of conversations and case studies, we’ll discuss some time-proven best practices from hospitality organizations and other industries within the service sector. Some of these studies focus on the company’s internal customers—their employees—and demonstrate the value of training and building a culture around hospitality. Other studies review the relationship between consumers and providers to explain the intrinsic connection between long-term loyalty and profit. To help you realize these goals, the book outlines purposeful management strategies that emphasize the importance of leveraging hospitality training throughout the service economy, especially at a time when the dynamics of the workforce are changing quickly and radically.

      The challenges of today will only intensify over the coming years as an increasing number of baby boomers and other more experienced employees leave the workforce. Most people (but not all, as you will see) agree that the generation currently entering the workforce arrives with different expectations, and employers can either try and fight the new reality or adapt and improve, especially when it comes to quality service delivery. But despite what you may have heard—or experienced—this is an exciting time. Changes in the workplace and customer expectations are evolving quickly, and the stories in this book reveal worthwhile ideas—some simple, some complex—about how to improve workplace culture and, ultimately, deliver meaning to employees and customers alike.

      Products and Services

      In order to clearly understand the concepts in this book, it’s important to distinguish between “products” and “services,” especially because the transition to a more service-based economy has created such dramatic shifts in the consumer landscape. The definition of “product” is pretty straightforward: it’s something that can be inventoried, patented, and even displayed: anything from a hotel room or a pair of shoes to an online accounting service or a sticker. All mass-produced products are designed to be consistent and are defined by price, promotions, placement, and other tangible factors.

      “Services,” on the other hand, are less easily defined because they cannot be inventoried and are inconsistent and fleeting. The waiter bringing your coffee, the housekeeper cleaning your hotel room, and the airline representative rebooking your flight all offer services, which create both challenges and opportunities. Organizations with high-quality customer service recognize the difference between their products and their associated services. Those that excel and keep your loyalty despite unforeseen problems mitigate many of the challenges inherent in the products by acting with empathy during the service encounter.

      A Brief History Lesson

      Before we dig into the interviews and case studies, some background is in order. Our best chance of understanding the challenges service providers face today, as well as those they will face in the future, is to examine the not-so-distant past. The transition from pre- to post-industrial times necessitated a new approach to customer service, and it has been continually evolving ever since, even though some key lessons have been either hard-fought or ignored.

      In the interest of brevity, let’s focus on a representative example of many of the changes that have occurred over the past century: Bell Labs. A key player in the products and services industry, the company formed in 1925, when four thousand scientists and researchers from Western Electric Company and the American Telephone & Telegraph Company (AT&T) were pulled into a new company: Bell Telephone Laboratories. Like Apple or Google in Silicon Valley today, Bell Labs was considered the premier tech company in the country and was as influential in the psyche of the American consumer. Bell Labs was revolutionary for its day, servicing such entities as the telephone company and the US Government. Like Tesla, Amazon, and scores of other contemporary companies, Bell Labs spent money, time, and energy testing and developing new products, ranging from the transistor to the Unix operating system. That dedication to research and development paid off, and, beginning in 1937, the company was awarded eight Nobel Prizes over a seventy-seven-year period. However, creating the technology for the transistor (Nobel Prize awarded in 1956) is one thing; ensuring that the product will work when mass-produced is another. Luckily, by that time, a system had been developed to do just that.

      The formal recognition that quality was an important factor in production began in the 1920s, when Walter Shewhart, an American physicist and statistician commonly known as the “father of statistical quality control,” identified the need to control the quality of industrial products. He invented an elaborate system that introduced tracking charts to monitor quality in mass production, and then named the concept “statistical process control.” The process was later adopted by Bell Labs as a way to ensure that their mass-produced telephone products and consumer goods were meeting company standards. In fact, Shewhart’s methods were considered so sound that they were later implemented in weapons production during World War II.

      Unfortunately for American consumers and businesses, the lessons learned before the war about tracking service quality were largely forgotten after it. There was a general and unquestioned sense that America’s superior ingenuity and systems were simply better than their foreign competitors and did not require any systemized quality control. In contrast, the Japanese, during their post-World War II reconstruction, realized how important quality was to the success of a product, and they famously adopted the theories developed and pitched to them by two Westerners, W. Edwards Deming and Joseph Juran, in the 1950s.

      Both Deming and Juran believed that the majority of product defects were caused by poor management, not inept line workers, whom Americans usually blamed. Additionally, the two men thought implementing superior quality control processes while a product was being made was a far better use of resources than hiring a team of inspectors to find and assess flaws afterward. This sounds like a no-brainer now, but it was a revolutionary idea for its time. Deming and Juran convinced Japanese business leaders that if workers were given the right tools and the responsibility for making sure things were done correctly, quality would improve and there would be no need to hire teams of inspectors after the product was made. As you probably know, their argument was a persuasive one. Beginning in the 1960s, their theories strongly influenced Japanese manufacturers from Toyota to Sony and helped the “Made in Japan” phrase signify consistent, reliable products, whether a consumer was buying a Toyota car or a Sony Walkman.

      While the Japanese were reorganizing their manufacturing processes around Deming and Juran’s theories, few American entrepreneurs similarly recognized the importance of structuring a company around consistently delivering a quality