Islands of Excellent Service
There has always been a disconnect between the concept of customer service among Filipinos and the international understanding of the practice. Traditionally, in the Philippines, a customer in a food service establishment would be treated with a high degree of hospitality and friendliness. Service staff would be smiling and friendly, waiters would be respectful and helpful.
The smiles would be consistent, but the service itself would not. The food often would be slow in arriving. Menu items would be “out of stock”. The restaurant’s bathroom would be dirty and without toilet paper. Paper napkins would be guarded and doled out individually as if they were treasured items. The payment of the bill would involve complex negotiations because the cashier was without change for a bill larger than PhP100.
If the smiling waiters showed hospitality, courtesy and respect, traditionally many Filipinos would still consider the restaurant as providing good service, despite the problems. An international guest would appreciate the smiles but quickly be displeased with what customer service experts call “hard skills” – delivering the customer experience in an efficient manner.
This difference in the perception of customer service has changed over the years as Filipino consumers have become more sophisticated, but there remains a tolerance in the country for what international customers would perceive to be poor customer service. A 2010 study, titled “The Cost of Poor Customer Service,” found that Filipinos were the least likely to end a business relationship despite bad customer service compared with people in three other Southeast Asian countries.
The study found that Filipino customers were likely to end at least one business relationship a year due to poor customer service. Singaporeans were three times as likely to take this action. About a fifth of Filipino consumers surveyed were dissatisfied with travel and hospitality firms in the Philippines, which includes restaurants and coffee shops.
Though it is not widely known, good customer service is legally mandated for hospitality companies accredited by the Department of Tourism, which includes most major restaurants and hotels.
Republic Act 7160, known as the Local Government Code of 1991, requires among other things that accredited restaurants have an “adequate number of well-trained, well-groomed, experienced, efficient and courteous staff”. Bathrooms are required to have “tissue papers, soap, paper towels and/or hand drier.”
Though such laws and regulation have had little impact on improving customer service, some establishments – most notably the world’s experts in customer service for the hospitality industry – have helped change the expectations of consumers in the country.
According to an analyst, who has examined the customer service operations of several large companies in the Philippines, most pockets of excellent service that can be found in the country are the result of multinational companies adapting a comprehensive and tested international customer service program.
Companies like McDonald’s, Starbucks, 7-11 and similar international retail outlets are not using unique strategies in the Philippines to bring high-quality customer service, the analyst said. They are using adapted versions of the tried and tested customer service strategies they are implementing in Africa, Latin America, and the rest of Asia.
There are pockets of quality customer service within Filipino companies. These are primarily corporations that operate internationally – such as SM or Jollibee – or those which have matured to the point that they have invested in developing international customer service standards. Few local companies have independently developed customer service programs that make the leap from hospitality to efficiency.
The undisputed king of maintaining customer service consistency in branches around the world is McDonalds. Operating more than 30,000 restaurants in 118 countries, it serves more than 45 million customers a day. The company has more than 180 branches in the Philippines.
Not long after it was founded, the company developed the QSC program, for Quality, Service and Cleanliness. That was later expanded to QSCV – Quality, Service, Cleanliness and Value. The company later expanded this into a benchmarking system in which branches are graded, and punished for low scores.
This system was used to maintain the consistent standard of the company’s branches as it expanded throughout the United States in the 1960s and 1970s. It is now used to maintain consistent standards of restaurants throughout the world. Branches face regular assessments – often via the RVR, or Restaurant Visitation Report. McDonald’s uses not only local assessments in the Philippines, but also flies in experts to analyze consistency among branches nationwide.
Local assessments combined with international analysis give the company the ability to customize its operations locally while maintaining a basic internationally-accepted standard. For instance, McDonalds in the Philippines sells spaghetti and chicken in response to consumer demand. But those menu changes were made after careful analysis and study in coordination with the company’s international experts who have examined menu changes in other countries, the analyst said.
The legendary food service company has taken international customer service development to unparalleled extremes. It operates Hamburger University in the state of Illinois in the United States, which is attended by 5,000 McDonald’s employees and managers each year, including many from the Philippines. Since 1961, more than 80,000 restaurant employees, managers and owner/operators have graduated from the facility. The training center has 19 professors with McDonald’s restaurant operations experience from around the world. It maintains the capability to teach in 28 languages including Spanish, German, French, Japanese and Mandarin Chinese. The main facility is supported by 22 regional training centers around the world.
Hamburger University– which is state accredited and allows students to transfer credits to traditional colleges – drills in the service, quality and cleanliness credo through a focus on nitty gritty procedural training. This commitment to the procedures associated with high-volume fast food operations, by line workers, managers and owners, is what gives McDonald’s its globally consistent quality.
Another international food and beverage company in the Philippines that has established itself as a leader in customer service is Starbucks. Similar to McDonald’s, the company uses programs that are tested globally and adapted locally. But unlike McDonald’s, Starbucks is a younger company that is undergoing significant changes in its operations. It also offers a very different customer value proposition to its customers. McDonald’s offers consistent, low-cost, fast food. Starbucks is in the business of selling an experience, not just selling coffee.
According to the retail analyst, Starbucks has a much more complex proposition when it comes to adapting its customer service model to the Philippines. Starbucks stores were created based on the concept of a “third place”. Customers go home. They go to work. Starbucks is the other place that they hang out and relax. Their high prices compensated for lower customer volume.
It is not clear whether the Starbucks model – encouraging people to linger indefinitely in their stores – will be a profitable plan in the Philippines, the analyst said. The company’s aggressively hospitable service, that includes calling customers by their names and memorizing their usual orders, is popular in the Philippines. In some countries, including parts of Europe and Japan, the practice is considered unnerving and inappropriate.
Starbucks is also focusing on the development of “soft skills” when it comes to customer service. Unlike a high volume fast food operation, where efficiency is paramount, Starbucks encourages its employees to be sociable with customers. The analyst was skeptical about the long-term viability of this practice in the Philippines, which is at the core of the Starbucks customer service policy. Most companies in the Philippine need to work to make their employees less sociable and chatty, the analyst noted.
The impact of multinational companies bringing customer service best practices to the Philippines has been a gradual, increased demand for improved services at establishments across the country. For those who have been in the country for more than 10 years, the changes are evident. The retail analyst who specializes in customer service issues said there are no longer just “islands” of good customer service in the Philippines. There are a few “continents” of good customer service emerging, mostly centered around affluent urban areas and modern shopping malls.
Author: John Orenz Nito, Pacific Strategies and Assessments