Do Customers or Employees Come First?

Anyone who has ever been in customer service has heard the line, “The customer always comes first.” But do they really? Keep reading to find out.

KEEPING CUSTOMERS HAPPY

The main school of thought is that companies need to keep their customers happy. That is absolutely true. You can’t run a successful business without happy customers, but how do you make your customers happy? By providing good customer service, of course! Let’s disregard products for the time being and just focus on the customers and the employees because if you don’t have good products, you have other problems.

EXAMPLE OF POOR CUSTOMER SERVICE

Let’s keep this simple for the moment. Here is an example of an experience where a family was going out to dinner with their children. They were seated at the restaurant and the waitress came over to take their order. Before they started, the parents told the waitress that one of their children has egg and nut allergies and asked if they could check to see what the child could eat. This restaurant had a large menu with a variety of food.

The waitress went into the kitchen and came back out five minutes later, telling the parents that everything on the menu has eggs. “Everything?”, they asked. “Yes, everything”, the waitress said. The parents said, “If our child can’t eat anything here, then why would we ever eat here?”. Then they got up and walked out the door, never to be seen in that restaurant again. Not only that, they told that story numerous times to as many people as they could about that restaurant. How many customers did they lose? Who knows, but this problem could have been solved. Is it the waitress’s fault? Is it the manager’s fault? Is it the restaurant’s fault? All of the above.

EXAMPLE OF GREAT CUSTOMER SERVICE

Here is another story about a different restaurant. The family walks into the restaurant. They are seated, and the waiter comes over. The parents proceeded to tell the waiter that their child has egg and nut allergies and asked what was on the menu that the child could eat. Mind you, they are in an Italian restaurant and everything is made with pasta. The waiter knows everything on the menu, as well as how it is prepared. Without hesitation, he said, “All of our pasta is made with eggs.” The parents sighed. The waiter noticed this and said, “However, let me see what I can do.” He brought their drinks and said he would be back in five minutes.

The waiter came back and said everything was fine and they would make the child a special dish with a clean pan. The parents asked how that was possible if all of the dishes were made with pasta that contains eggs? He said that he walked over to a neighboring restaurant and borrowed some egg-free pasta that the restaurant could use to prepare the dish for their child. The parents were astounded! The food was excellent, but more importantly, the service was unbelievable. The parents have since told that story at least a hundred times, to everyone they know and have not only recommended the restaurant but that specific waiter, as well.

Maybe the first restaurant and the second restaurant had the same quality food, but these parents, and many others like them, will never know about the products (food) at the first restaurant because the waitress, or the chef, or the manager, just didn’t care enough.

So, we learned that the customer is vitally important because the customer pays for the food, products, and services they consume. You might say that the customer comes first…but not so fast! In the case of the restaurant, the customer was only taken care of because the employee took the trouble to take care of them, by going above and beyond their duties.

Why would they do that? Just because they want a good tip? Sure they do, but that’s not all of it. They have to enjoy where they work. They must respect their boss. They must love the food there, and they must believe in the restaurant and its owners. They count on it for their livelihood. Most importantly, they take a sense of ownership and pride in their work and they are happy to represent the restaurant and say they work there.

WHAT ABOUT PUBLIC COMPANIES?

How about a public company? This is a bit different, isn’t it? The Senior Leadership Team and the Board of Directors have an obligation to appease and produce for the shareholders (investors) of the company. A big percentage of the shareholders in a public company are institutional investors and they are demanding, so the Senior Team tends to do what is necessary to keep that share price going higher. They are also internally incentivized to keep the stock price going up. This means that they may value profit above all else, whether through revenue growth or cost-cutting measures. So, because of the nature of a public company, the model is shareholder first, then the customer, then the employee. However, there are a lot of corporate leaders who have seen the change that employees can make on a company’s bottom line, by treating them better. Treating employees better isn’t the only factor in making a great company though (see below on how we use an Employee Sentiment to Revenue Ratio as part of a key factor in our stock research metrics).

A GREAT EXAMPLE OF LEADERSHIP

A great example of a leader who believes that employees should come first is Sir Richard Branson of the Virgin Group, a global conglomerate that owns a percentage of too many companies to list here. Richard Branson believes that employees should come first. Because if you take care of your employees, then they will take care of the customers.

For an example of a company with great customer service, we can point to Chick-fil-A. Whether we go to Virginia, Massachusetts, or Colorado, the experience has always been the same…excellent customer service. Sometimes we think they must be handing out bottles of happy pills to their employees!

HIRING THE RIGHT PEOPLE

At Tycoono®, we don’t think it’s just a matter of treating employees right and making them first on the priority list that makes a company great. It’s more than that. It starts with the hiring process. Here is the process on how we think a great company keeps great employees:

When interviewing employees, it’s not enough to just check the boxes on skills and experience. This is a major commitment on both sides, so if they have most of the skills and experience, but not all of them, it’s okay.
Make sure that the person is a cultural fit for the company and for the team they will be working with. Personality does matter, and their personality needs to fit the role. This is what we call chemistry. Chemistry between two people can also apply to a team, a manager and a company. Have you ever been to a party where after 15 minutes you just wanted to get out of there as fast as you can? That wasn’t the right place for you, was it? A company can be the same way.
Once the candidate’s skills, experience, and personality meet the criteria for the role, you can have them meet with the broader team to again determine a personality and corporate culture match. They may even have their own personality test that determines whether or not the person is a good fit for the company.
If you hire people that are a good fit for the company and they show promise, it is the manager’s job and the leadership team’s job to provide the necessary tools, career path, education, perks and pay that will keep them happy. You should also genuinely care about them. An employee will go the extra mile for a boss and for a customer if they know that their boss, and the company, care about them.

EMPLOYEE SENTIMENT / REVENUE RATIO

There is a survey done each year by Glassdoor and Fortune, that rates the “Best Places to Work”. We take the top 100 companies that have ranked on this survey and compare that to each company’s revenue, to come up with a ratio. We feel this metric is important in the positioning of the company in their sector and in the public eye. We use this as one out of many key metrics that provide the output for our stock research and it tells us which companies have a better long-term future than their competitors.

CONCLUSION

In summary, we subscribe to the “employees come first” school of thought, but first, you have to make sure that you hired the right employees to begin with. It’s tough to overcome bad behavior or mediocrity from an employee who just doesn’t want to be there in the first place.

Just to prove the importance of good customer service, here is a “bad customer service montage” for your viewing pleasure: