The luxury touch

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The relationship between heightened quality of service and the luxury touch is often noticed, but its significance is rarely understood. A recent Booz Allen Hamilton study suggests that with luxury brands, the excellence of the underlying product is merely a starting point. Interviews with 40 executives at a broad spectrum of high-performing luxury brand companies confirm that what makes these luxury products truly stand apart is the superb level of service in which they are wrapped. Indeed, the services surrounding each of these brands can be viewed not only as an intrinsic part of the products themselves, but also as an important differentiator of the brand.

Companies like Ritz-Carlton, Nordstrom, and Lexus can guarantee service that goes the extra mile because, in effect, they've programmed their organisations to foster customer-centred behaviour in employees at all levels. Although there's no single process for achieving high levels of customer satisfaction, four principles are common to nearly all top-performing luxury brand companies:

1.They create a customer-centred culture that identifies, nurtures and reinforces service as a primary value.

2.They use a rigorous selection process to populate the organisation with superior sales and support staff. The impulse to care about accommodating customers cannot be taught to people who are not predisposed to it.

3.They constantly retrain employees to perpetuate organisational values and to help them attain greater mastery of products and procedures.

4.They systematically measure and reward customer-centric behaviour and excellence in sales and service to enforce high standards and reinforce expectations.

Over the past five years Ritz-Carlton sales have grown at a rate of 12.7% per annum, compared with a rate of 1.8% for the rest of the luxury hotel industry. Nordstrom's US sales have grown at a rate of 8.3%, while sales for other non-discount department stores have declined 1.6%. And Lexus sales have grown by 7.8%, compared with just 0.9% for other luxury auto brands.

Values First

Customer-centric values and culture inform the hiring process and animate the systems of training and rewards. Instilling values of this sort may be the ultimate test of leadership. Leaders of customer-centric companies clearly articulate what kind of organisational culture they want and consistently sell employees on its key principles.

Ritz employees are constantly schooled in company lore and company values, spelled out in a credo that the company calls its "Gold Standards," printed on a card that employees carry at all times. The credo begins with the statement, "We are ladies and gentlemen serving ladies and gentlemen," and continues with principles such as:

• I am always responsive to the expressed and unexpressed wishes and needs of our guests.

• I continuously seek opportunities to innovate and improve the Ritz-Carlton experience.

• I immediately resolve guest problems.

• I have the opportunity to continuously learn and grow.

• I am involved in the planning of the work that affects me.

• I am proud of my professional appearance, language and behaviour.

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