Is it possible to be proactive about being reactive? That sounds somehow oxymoronic but after re-reading a BusinessWeek article on firms that excel at satisfying their customers, I think it might be a key to fostering customer loyalty.

For the article “Customer Service Champs” from its March 5 issue, BusinessWeek created a list of firms regarded as serving their customers well, drawing on brands in the database of sister firm J.D. Power & Associates (both are owned by the McGraw-Hill Companies). The magazine also polled 3,000 of its readers to generate a similar list. In addition, J.D. Power surveyed customers about brands that were cited by readers but not already in its database.

The result is an insightful and instructive special report on (and ranking of) 25 companies that are seen as providing top-flight customer service.

The article proves the importance of making good customer service a priority - part of the corporate DNA - and devoting substantial time and resources to developing processes to identify, track and react to service snafus. (In our own pages this month, the p. 32 article on energy company Ameren shows the impact that an organization-wide effort can have on customer satisfaction. It’s also an instructive how-to for companies that want to launch a large-scale satisfaction research program.)

Speed is critical

In this business of satisfying customers, speed of response is critical. When service problems crop up, consumers now have myriad ways to make their dissatisfaction quickly known to a company, thanks to e-mail, Web sites and cell phones. And companies have a wealth of options available to respond just as fast.

In the old days, a disgruntled customer might have taken the time to write a letter of complaint and then mailed it in, hoping (likely in vain) to hear back from someone at the offending company within the next few months. In many cases, any remaining reservoir of goodwill within that customer likely dried up.

Now, as the article makes clear, with the technologies available, it’s almost inexcusable for a large company to not provide coordinated, comprehensive responses to customer service issues. (Our case history on Budget Rent A Car this month is a good example of the power of a quick response to customer service problems.)

Most of the firms on the BW list have invested in systems to track and react quickly to customer complaints. Southwest Airlines, for example, six years ago created a high-level position to oversee all proactive company communications with customers. Southwest’s Fred Taylor coordinates the information sent to the airline’s employees during major flight disruptions but is also responsible for sending out letters and flight vouchers to customers who had to endure storms, air traffic backups or other problems – even those outside of Southwest’s control.

But it’s not enough to merely respond quickly. As anyone who has submitted a complaint online can attest, receiving a boilerplate e-mail back from the company acknowledging receipt of your comment and a promise to get back to you certainly does little to smooth ruffled feathers. And in fact, this practice can backfire if a satisfactory resolution is never offered, as not only has the company admitted it received the complaint but then it clearly demonstrates that it doesn’t care enough to follow through.

Responses like Southwest’s – targeted, specific and bearing something of value or meaning for the customer – should now be the standard.

Employee loyalty

As disparate as the BusinessWeek list is – it includes automaker Porsche and outdoor gear retailer Cabela’s – the firms on it pair their focus on customer service with a commitment to employee loyalty. Efforts to please workers range from encouraging employees to borrow and review store merchandise (as Cabela’s does) to awarding millions in scholarship money (a practice of grocer Wegmans).

Most also insist that executives log or have logged some time working in the trenches or at least have regular contact with those who do. As the article states, “While treating employees right and staying close to the front lines may sound like simplistic platitudes, they’re also the hard truth about the hard work of getting service right.”

National punch line

Even so-called service champs can take it on the chin. BusinessWeek had JetBlue Airways ranked No. 4 on its list until the airline’s handling of the February debacle at New York’s JFK airport turned it into a national punch line. For a firm that crowed about its customer-friendliness, its blunders set it up for an even bigger fall. (What’s that line about living by the sword?)

Still, as a sidebar chronicles, the airline launched a wide-ranging damage-control effort (including a mea culpa appearance by then-CEO David Neeleman on the Late Show With David Letterman) which one day may serve as a guidepost for other firms that find themselves in similar straits.

Some other interesting tidbits from the article:

  • After JW Marriott Hotels switched from paper comment cards to online surveys, responses went up 50 percent.
  • Each month, senior execs at Cabela’s assemble to listen to customer calls while watching the same screens used by service reps.
  • Service reps at insurance firm USAA earned 2006 bonuses of 16.5 percent. Last year the firm added a tool in its call centers to track sales rep suggestions for customer-friendly ideas.
  • By 2008, legendary retailer Nordstrom is scheduled to launch a system that enables employees to view a single database of company inventory to help customers track down an item they are searching for.
  • At Southwest Airlines, an employee idea led to the practice of gate agents placing color-coded magnetic cards on gate doors to let other employees know when they need help.

Always be improved

As the firms profiled in the article make clear, satisfying customers and responding to their needs is a process that never stops and can always be improved. Indeed, even Nordstrom initially declined to speak with BusinessWeek, saying it didn’t consider itself an expert in customer service. That very attitude is probably why it, along with others on the BW list, will continue to set the standard to which competitors aspire and customers flock.