There is perhaps no greater customer service story than the remarkable true account of Jan Carlzon and the business turnaround around that he led as the president of Scandinavian Airlines.
In 1981, Scandinavian Airlines reported an $8 million loss and the future of the company looked bleak at best. When the then president resigned, the board of directors promoted Carlzon to the position. In less than two years, Carlzon turned that negative $8 million into a gross profit of $71 million – an extraordinary gain of $79 million!
How did he do it? And, more to the point, what does this have to do with customer service?
Unlike the conventional “we need more sales” approach, Carlzon’s brilliant, yet simple plan was to re-focus the organization on their most important asset – existing customers!
Carlzon made a business case that SAS already had 10 million passengers per year and, if they did a more effective job in managing those existing relationships, they could turn the airline around and prosper. Doing the math, he reasoned that the average passenger came into contact with five SAS employees during a single transaction with the company. He called these encounters “moments of truth."
According to Carlzon, “a moment of truth is an episode in which the customer comes into contact with any aspect of the company, however remote, and thereby has an opportunity to form an impression.”
Carlzon recognized that each customer contact is a unique, unrepeatable opportunity for a company to differentiate itself from the competition. In the case of SAS, he made it his job and Number One priority to proactively manage those 50 million unique customer contact experiences.
No doubt you’ve heard the phrase, "You never get a second chance to make a first impression." That being the case, the first moment of truth takes place as soon as the customer walks in the front door of your dealership. This introduction sets the tone for the rest of the experience, and if the customer perceives it as lousy or unwelcoming, you are leaving the door open to competitors who would happily invite your customers in and take away your business.