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Secrets of The Ritz-Carlton’s ‘Legendary’ Customer Service

Justin Hoffman • May 8th, 2014

Research supports what most of us already know from experience — that people talk about customer service. If it’s a positive experience, people talk about it. And if it’s a negative experience, people talk about it more. Statistically, most of us are likely to tell 10 to 15 more people about a bad experience than a good one, so the message is clear: your organization’s customer service is a huge factor in determining your success or failure.

At the most recent PSA Partnership seminar, a crowded room full of PSA clients and friends came to learn about “legendary service” from a brand synonymous with the concept: The Ritz-Carlton. Joe Quitoni, corporate director of culture transformation with The Ritz-Carlton Leadership Center, shared the esteemed luxury brand’s secrets with the audience.

Thirty years of legendary service

Founded in 1983, The Ritz-Carlton operates 90 hotels in 27 countries, as well as residences, destination clubs, and luxury spas, earning more than $3 billion in sales annually. It is the only hospitality organization to win the coveted Malcolm Baldrige National Quality Award twice. “Regardless of whether you’re spending $24.5 million to live with us in New York’s Central Park, or $199 to stay with us for one evening at The Ritz-Carlton in Cleveland, we have one opportunity to wow you. And that ‘wow,’ if you would, or the mystique of our organization, comes hands-down from two places: our culture and our people,” said Quitoni. A brand is not only a company’s logo and image but also the emotional connection it has with customers — which comes from the people, not the product.

An eye-opening study from the American Society for Quality shows that only 9 percent of customers will leave because they are lured away by the competition; 14 percent will leave because of dissatisfaction with the product; and a whopping 67 percent will leave because of the attitude of one person in your organization.

Quitoni used examples from his own experiences to illustrate how customer service can either come from the head or the heart. Unhappy with its high employee turnover at one point, The Ritz-Carlton overhauled its hiring process. The organization now hires for culture first, job knowledge second, he said. “I can train you to do anything I would like you to do… but I cannot train you how to deliver service from the heart. You’ve either got it or you don’t — it’s an innate behavioral ability. And in service, you’ve got to have it.” Among its 45,000 employees, The Ritz-Carlton’s annual turnover is one of the lowest in the hotel industry, hovering right around 20 percent.

Respect, authenticity, and consistency

Quitoni credits that progress in part to the respect shown to employees — referred to by The Ritz-Carlton as “ladies and gentlemen serving ladies and gentlemen” — and also to the employee promise, the newest addition to The Ritz-Carlton Gold Standards, which include the company’s credo, motto, and service values. These standards are intended to foster psychological ownership of the brand among everyone who works for them. Each employee, from housekeeper to CEO, carries a credo card at all times to remind them to exemplify the culture of the organization.

Quitoni emphasized a few key words from the credo, including “genuine,” “personal,” and “always.” Respect and authenticity are crucial to forming positive, sustainable relationships not only with customers but also fellow employees, he said. Ideally, people in the service industry should not act one way with customers and a different way behind the scenes.

The Ritz-Carlton provides new employees with a lengthy orientation and training, during which they emphasize eye contact, smiling, remembering guests’ names, and providing consistently exceptional service. To ensure that every one of their 45,000 employees is on the same page, every morning at every Ritz-Carlton, the staff holds a 15-minute “Daily Line-Up” to discuss the plan for the day, talk about special events and important guests, and share an inspiring quote. “This is our answer to sustained culture,” said Quitoni.

The high cost of not empowering employees

While not every organization has the brand recognition and the dollars that The Ritz-Carlton does, Quitoni believes firmly that businesses can’t afford not to pay attention to their customer service and the engagement of their employees. “Redirection is costly,” said Quitoni. To prove the point, he gave the example of a dinner guest who is unhappy with his soup. Instead of replacing a $5 bowl of soup, the server gets the manager. The guest repeats his story and grows more frustrated. The manager passes the buck to his manager, and the now irate customer has to repeat the story yet again. When all is said and done, that $5 bowl of soup has cost the restaurant a customer for life. (And a dissatisfied customer, if you recall, will tell an average of 10-15 people about his experience.) The Ritz-Carlton believes in first-person resolution, and empowers all employees to own and resolve guests’ problems, Quitoni explained. There’s no such thing as “That’s not my job.”

After walking the seminar attendees through The Ritz-Carlton Gold Standards, Quitoni said, “These key processes truly allow us to have an engaged workforce that delivers legendary service moments, every interaction, every single day.” While he believes that virtually any organization can improve its employee engagement and level of service — and part of his job is training other organizations how to do so — it does not happen overnight, he warned. “On average, culture transformation in any organization will take at least 12 months.”

If you’re interested in finding out more about The Ritz-Carlton Leadership Center and how it can help your organization, visit their web site. And, find out more about the next PSA Partnership event, “The CEO’s Plain-English Guide to Cyber Security” on June 24.

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About the Author: Justin Hoffman is PSA’s Chief Marketing Officer. He oversees business development initiatives and PSA's Marketing Department. His focus includes sales leadership, Account Executive support and recruiting, sales training and CRM technology. He supervises PSA’s awareness, community-building and demand-generation efforts. The majority of his 14-year career has been spent at financial services firms, managing brand development initiatives, advertising, public relations and electronic marketing. Prior to joining PSA in 2007, he led M&T Bank’s sports marketing assets, overseeing relationships with the Baltimore Ravens, Buffalo Bills and other sports franchises. Justin holds a Master’s degree in Marketing from Johns Hopkins University. You can reach Justin on LinkedIn or via email.