Is Customer Service an Oxymoron or Leadership Tool for Hospitality Managers?
By Justin Taillon, Professor & Department Head at Highline College
Hospitality professionals universally recognize the importance of customer service to the success of their businesses. Examples of this importance are measurable. For example, one study on the impact of customer service found the following (Oracle, 2011, p. 2).
- 86% of consumers will pay more for a better customer experience.
- 89% of consumers began doing business with a competitor following a poor customer experience.
- 79% of consumers who shared complaints about poor customer experience online had their complaints ignored.
- 50% of consumers give a brand only one week to respond to a question before they stop doing business with them.
Customer service has historically been understood as the provision of interaction by a for-profit company around the sale and marketing of a product to a consumer potentially willing to pay. Yet, the tenets of customer service do not lend themselves to only our traditional understandings of what constitutes a customer. The foundation of customer service is correlational to effective management of team members. Put another way, an emerging management strategy of employees is customer service.
There are two primary forms of customer service: internal and external. External customer service is the revenue-generating act of providing support to existing and prospective consumers. Internal customer service is service to the people we work with, whether a co-worker within the same organization or a member in an affiliate organization (or at times even a supplier from within our organization's supply chain).
Generational Differences and Internal Customer Service
Thinking of the aforementioned statistics regarding poor customer service strategies, this is applicable to employees as well. Team members depart our organizations when they are not treated well. Turnover of each front-line employee in hospitality costs approximately $7,000 (Teubert, 2013). If we begin to treat our team members as customers, then they are more likely to stay with our organizations. Furthermore, this is becoming truer with Millennial and Generation Z.
Leading team members is one of the most difficult and complex things a hospitality manager does. Lending itself to the complexity are changing demographics (e.g. Baby Boomers, Generation X, Millennial, Gen Alpha). Specifically, Generation Z and Millennial individuals expect a workplace that is barely recognizable to previous generations (Dev Talukdar, 2020):
- Freedom of thought - They expect to be listened to and have their ideas treated as equal to those of others, no matter their experience (or lack thereof).
- Flexibility of work - They get their work done, but not necessarily during regular business hours or even on-property.
- Work culture transparency - They expect the organization to share information with them. They want to see a picture larger than their specific role.
- Scope of learning and development - They want to cross-train and in fact want to continuously be in learning mode. They do not often succeed in tedious or repetitive roles.
- Technology - Millennial and Gen Z (and likely Gen Alpha when they enter the workplace) are often tech savvy; but they are even moreso tech reliant. In particular younger Millennial and future generations face difficulties when automation is lacking and traditional methods are relied upon. While this is often understood as hindrance in workplace environments, these younger individuals can serve as pseudo-consultants when employers are seeking to implement new technologies.
- Limited bureaucracy - The quickest way to create needless turnover in an organization is to enhance bureaucratic processes. If we hire the right people and train them properly, then we should be able to trust them in flat organizational structures that they prefer and excel in.
- Support social causes - Sustainability is a feature of younger generations. While green-washing or marketing limited environmental practices have become modus operandi in many organizations, younger generations are more cognizant and less likely to allow businesses to get away with these practices. They want true sustainability, and that means social issues even moreso than environmental practices.
Younger generations are seeking the aforementioned team member centric approaches to management. Traditional management strategies, including even leadership models, do not appeal to these generations. Rather, elements of internal customer service as a management strategy should be adopted in the hospitality industry.
Management and Internal Customer Service
The 2020s are necessitating a greater shift in what an environment conducive to success implies. Managers are responsible for meeting 2020's challenges and the chain reaction industry-wide stemming from COVID-19; furthermore, they are responsible for leading teams through these difficult times. Knowing that a shift to an internal customer service model is needed right now does not mean we know how to make it happen. Luckily, there are foundational powers that managers have in our repertoire that can assist us in implementing a new approach to managing team members.
Managers have seven types of power that can be leveraged to create a cultural environment in the workplace:
- Coercive power - This is the power to instill fear in our team members. Think of it as management's ability to wield a carrot and/or stick.
- Expert power - This is your knowledge and expertise built on years of experience.
- Information power - As managers, we often have intelligence and internal communication others do not have the ability to access. This allows us to see a more holistic picture and make superior decisions.
- Legitimate power - This is your title. As a manager, you are automatically granted this power, whether you have earned it or not.
- NetWORK power - You have been in the industry for many years. You earned your management role. You met a lot of individuals, both within and outside your organization, whether through professional associations, formal education, or co-workers from the past. This network can be leveraged for information or even to provide an opportunity for your team members in the future.
- Referent power - Many of your team members want to be like you. They want your title, but they also want the knowledge and abilities you have. The fact that they seek to emulate you is called referent power.
- Reward power - This is the ability to give team members things they desire. Historically, this has been raises, incentives, and other monetary goods. In the future, this is more likely to be social issues, time off, the ability to work from home, and other non-monetary goods.
Managers should leverage their power to build the type of workplace environment our team members are seeking. This leads to lower turnover rates and more successful organizations, especially as we continue to move into environments featuring more Millennial and Generation Z individuals. Fontanella (2019) identified a model for implementing internal customer service principles that managers can leverage with their newly identified or understood powers.
Applied to management situations in a hospitality context, the ideas from the model can be understood in these ways:
- Rethinking the purpose of a team: Historically management has focused customer service efforts on consumers. Treating employees to customer service support will increase the likelihood of an effective team hitting their KPIs.
- Publish a schedule of your drop-in office hours: Are office hours only for professors? Not in the future! Emerging generations are seeking to be heard. Setting aside time to meet with them, on their schedule, is important to them.
- Set clear expectations: They do not like micro-management; but they do want clear goals they can set their sights on achieving. Make these goals SMART (Specific, Measurable, Attainable, Relative, and Timely).
- Adopt customer service tools: Each organization has approaches to customer service. Managers of the future will implement similar tools to team member management. These will be specific to each organization but could include incentive and loyalty programs, omni-channel support options, investment in what they believe is most important (meaning you listen in the first place), shared reviews and testimonials, self-service resources (e.g. H.R. management software they can view and update themselves).
- Conversational tones - Some formalities in communication can be skipped. Yes, professionalism remains integral but building a rapport with your employees by asking them about themselves, and then remembering what they say and following up, is important to their well-being as an internal customer.
- Employee goals - Future generations do not work to live. They are seeking positions and companies they are passionate about. Their goals are personal and work-related (e.g. promotions) but also social, environmental, and global. Hopefully, our organizations, including our management teams, are supportive of their goals.
- Internal service standards - We should be setting goals and measuring our successes as managers toward our employees. How quickly do we respond to our team members? What is their satisfaction level with management, the team, the organization, etcetera?
- Self-support options - We offer external customers the ability to access numerous self-support options. What if we ensured our team members had the same access?
- Problem-solving - Our team members have unique access to daily issues. They desire to be listened to in ways past generations did not necessarily have available to them. We, as managers, should problem-solve while including the voices of our team members.
- Omni-channel communication methods - Our team members seek to communicate in ways, at times, and on technologies that are perhaps new to us. We need to offer them the ability to speak to us in their desired capacity.
Millennial, Generation Z, and Alpha are the future team members, and eventually leaders, in the hospitality industry. COVID-19 and changing demographics have given us an opportunity, created a necessity, to update our management strategies. This article identified what generations are seeking in their workplace environment. Specifically, they are seeking to be treated as internal customers. Managers should therefore implement internal customer service strategies.
This article outlines the workplace environment we should be seeking, the powers we as managers can leverage in order to create this workplace environment, and some specific items research has shown we should implement in this emerging customer service paradigm of management. We will be more successful managers when we internalize new management strategies, forward-thinking ones.
- Dev Talukdar, A. (2020, August 6). 7 Expectations of Gen Z Employees that Must Be Addressed. Vantage Circle. Retrieved November 14, 2020.
- Fontenella, C. (2019, August 16). 10 Internal Customer Service Best Practices. HubSpot. Retrieved November 14, 2020.
- Oracle. (2011). 2011 Customer Experience Impact Report: Getting to the Heart of the Consumer and Brand Relationship. In Oracle (Ed.) Hardware and Software: Engineered to Work Together.
- Teubert, L.A. (2013, January 29). What is turnover costing you? Horizon Hospitality. Retrieved November 14, 2020.