Editor's Note: Entrepreneur Richard Branson regularly shares his business experience and advice with readers. What follows is the latest edited round of insightful responses. Ask him a question and your query might be the inspiration for a future column.
Question: How does Virgin manage to deliver impeccable customer service that at times seems to be above and beyond the norm while keeping prices competitive? And why is it that so many other businesses only seem to be able to deliver either low prices with no service, or high prices for good service? -- Ryan Morphett, via Entrepreneur magazine
Answer: When you are making a decision about how best to serve your customers, your own experience is often a better guide than a more sophisticated analysis of the market. I find that I am often more disappointed by expensive goods and services than I am by lower-priced ones because my expectations are often overinflated when I pay a high price, but I have few expectations when I pay a low price. If a top-of-the-line product or service doesn't work as I had hoped, I might think: "At that price I really expected something better." But if something is disappointing at the other end of the scale, I'm likely to think: "I've only got myself to blame," and "Oh well, I guess you get what you pay for."
A question that often appears on customer surveys is: "Did we meet your expectations?" If the response is in the affirmative, the company may conclude that they must have done a good job – which may not necessarily be the case. Consider a situation where a customer who has had a bad prior experience comes in with very low expectations. When a client anticipates that service will be lousy and that's precisely what they get, then technically their expectations have been met.
The key is to set realistic customer expectations, and then not to just meet them, but to exceed them -- preferably in unexpected and helpful ways. Setting customer expectations at a level that is aligned with consistently deliverable levels of customer service requires that your whole staff, from product development to marketing, works in harmony with your brand image.
Because when there is no alignment, chaos can ensue. In commercial aviation, the big, long-established carriers, often still referred to as "full service" airlines, set themselves up for failure by continuing to oversell their services, even though they ceased to provide great service long ago. Their passengers have higher expectations than when they pay an identical fare for the same trip on a low-cost carrier.
Meanwhile, the low-cost carriers have done a very good job of setting expectations as they reinvent short-haul flying. Ryanair CEO Michael O'Leary and his team are unapologetic about their decision not to provide a great many traditional perks. What their customers do get in exchange for consistently low fares is flights on clean, well-maintained aircraft that usually leave on time.
Related: Richard Branson on Facing Your Fears
At Virgin America, we try for a different model. We offer great value, providing clean, stylish, comfortable planes for our passengers; in terms of service, we try to surpass travelers' expectations by offering better entertainment, good food and more comfortable seats. For the last five years the airline has consistently won customer-service awards.
Pricing your product or service is only one way to exceed expectations, however. The other is through your front-line employees -- everyone who works with customers.
Surpassing expectations on the service side means that your people understand what your brand stands for, that they are proud of it and will go the extra mile to make sure that your customers are happy.
Doing things better doesn't have to cost more -- all it takes is a little creativity and attention to hiring, training and management. To achieve consistently terrific customer service, you must hire wonderful people who believe in your company's goals, habitually do better than the norm and who will love their jobs; make sure that their ideas and opinions are heard and respected; then give them the freedom to help and solve problems for your customers. Rather than providing rules or scripts, you should ask them to treat the customer as they themselves would like to be treated -- which is surely the highest standard.
Your managers will have to be sure to provide in-depth training for new front-line employees. At the most basic level, you'll need to be sure that new hires use the product or service and then have the experience of asking for help from your staff. Understanding the customer's experience will give them great insight into their new jobs -- and sometimes longtime employees might like a refresher.
If you are seizing on a new business opportunity, deliberately move your customers' expectations up a few notches and consistently over-deliver on your promises -- you will leave your competitors struggling to catch up.