The incalculable appeal of good service

I recently spoke at an event hosted by Walpole, the association for makers of British luxury goods. And in conversation with the senior executives we all agreed – it is not so much the products you sell that guarantee success but the service you provide to customers.

I have spent most of my career in the service industries. My big winners have invariably been companies that managed to capture customers with outstanding service – be it in retailing, private healthcare, recruitment or financial services. Great service generates repeat custom and loyalty – and word-of-mouth recommendations. Nothing is better at creating a powerful franchise.

Yet it is extraordinary how bad service can be in the hospitality industry in Britain, even at expensive hotels and restaurants. That is why there are so many wonderful opportunities in the sector – so many of the opposition are still doing the job so badly.

After all, what is it that patrons want when they go for a meal or seek a room for the night? They want a warm welcome, prompt attention and knowledgeable staff. They want personal recognition if they are a regular. They want consistency, courtesy and efficiency. And they want any problems dealt with swiftly and politely.

My experience, from owning classic restaurants such as Le Caprice, The Ivy and J. Sheekey is that diners consider food, wine, value and decor important – but what really matters to them is how they are treated as people. When eating out, the public complains about noise, prices, bad food, crowds, dirt and so forth, but more than two-thirds of all complaints relate to poor service.

At PizzaExpress, I saw all complaint letters. Frequently the issue was about how managers dealt with difficulties. The best managers know that you can turn round the most dissatisfied customer by exceeding their expectations. So if their meal has been slow, give them a drink – or possibly the entire meal – on the house. You may well switch them from being harsh critics to advocates.

In theory, delivering memorable service should not be difficult – the principles are straightforward. But the task of persuading employees to provide excellent service on every occasion is hard.

The first step is to hire nice people, who are responsive and like dealing with the public. Cultivate a sense of pride in the organisation. Instil the belief from the top to the bottom that the customer comes first. Pay staff well, and give them extra for above-average performance. Provide strong leadership, show them respect and give them the correct equipment and support. Training can help, but I think picking individuals who enjoy their work is more important. And, as Donald Adams says, “To give real service you must add something which cannot be bought or measured with money, and that is sincerity and integrity.”

Culture matters enormously. While French waiters are normally highly professional, they are also too often haughty – sometimes almost rude. I find this sort of clipped manner – evident in certain grand boutiques in London – to be off-putting.

On the other hand, Americans tend to understand real service. I buy my shirts at Brooks Brothers in New York because the store assistants take immense care of you – they are hired properly and given incentives – although when I’ve been to their shops in London the experience has been hugely disappointing. Similarly, I think the Four Seasons hotel chain tends to give remarkable levels of service.

The fascinating thing is that good service does not necessarily cost an organisation more to provide than shoddy service. It is an obvious way for entrepreneurs to gain an edge and take share from rivals – without requiring additional investment. But it does need constant effort and a skilled team.

Moreover, customers are becoming more assertive in showing their dissatisfaction. Thanks to websites such as tripadvisor.com, bad experiences are communicated for the world to see. The hit-and-run approach to customers is not a sustainable business model. Be it tourism, sales, administration or aftercare, every business should excel at service if it wants to prosper.

E-mail: Luke Johnson
The writer is chairman of Channel 4 and runs Risk Capital Partners, a private equity firm