Good customer service means keeping freebies

The little extras cost you, but they're also what keeps your customers coming back.

(Photo: Gary John Norman/Getty)

Like all proud Scots, my wife, Joan, has a saying for every situation. One of her favourites is “Many a mickle makes a muckle,” meaning that a lot of little things can add up to a big thing.

When markets are uncertain and costs come under the microscope, a CFO will take note of a big expense for a small detail and think, “That’s such a trivial item that our customers won’t even notice it’s gone—but it will save us money.”

In many cases, the CFO is right. One of my favourite airline tales is about Bob Crandall, the legendarily irascible former CEO of American Airlines. One day, Bob was sitting near the front of one of their flights, intently monitoring the used meal trays that the flight attendants brought back to the galley. The minute he got off the aircraft in Dallas, Bob called the head of in-flight catering and demanded to know how much they spent each year on black olives. It took the poor man several minutes to come up with an estimate: about $100,000.

“Well, then,” Bob exclaimed, “I’ve just saved us a lot of money. Nobody’s eating the things. So take them off our menus!”

We have a similar story at Virgin Atlantic involving ice-cream bars on our planes, which we always hand out midway through daytime flights. But our decision yielded a different result. We knew our passengers liked them, but we had no idea how beloved this seemingly insignificant item was until one day we stopped giving them out, to save money.

There was an uproar. I got phone calls and letters from angry customers saying that they were shocked at the decision to “take away our ice creams.” I’ll never forget one in particular who said, “If you want to be like all the others, then go right ahead, but you should know that it’s little touches like this that make your airline different.”

How could I argue with that? We reintroduced them right away, and our customers are still eating ice cream to this day.

There is another, more subtle effect of cost-cutting, when managers anxious about budgets restrict—deliberately or not—front-line employees’ ability to make decisions about customer service. This prevents them from connecting with customers in a warm and caring way, and from acting with any spontaneity.

David Tait, who ran Virgin Atlantic for many years, recently described to me the most memorable customer service moment he’d ever experienced. He was talking with an associate in the lobby of the Hyatt Place Hotel in Utica, Mich. A staff member who happened by asked if everything was satisfactory and could she offer them a cup of coffee or tea.

David is borderline obsessive about customer service, yet that employee’s impromptu offer made a lasting impression on him. The hotel has fostered an environment where employees are comfortable making decisions on their own, rather than following a strict routine. This is the level of service that will truly make your company stand out—and it costs nothing.

This culture of extra effort should start at the top. When I am in London for a few days, I usually ask Virgin Atlantic staff to give me the names and arrival times of a few business-class passengers flying into Heathrow. We supply them with free limos to and from the airport, and I call them in the limousine. Usually when I say, “Hi, this is Richard Branson,” I get a warm reception—though one New Yorker retorted, “Yeah, right, and I’m the Dalai Lama.”

Once we get the introductions out of the way, I ask how the flight went and if there was anything we could have done better. It only takes a few minutes to make these calls, and the impression they create seems to be very positive, particularly if the customer had a problem I could help resolve.

So instead of stripping out the costly little touches in the hope that nobody will notice, preserve as many as you can, or even build in more. Your customers will be surprised and delighted—and they’ll keep coming back.

Richard Branson is a philanthropist, adventurer, entrepreneur and founder of the Virgin Group of companies.