Three Levels of Customer Service: Going Beyond Serving and Satisfying to Wowing and Winning Loyal Customers

Creating customer loyalty requires more than just serving customers in an efficient and effective manner. It takes a caring heart that shows true interest in the expectations and needs of those who patronize your business.


A small casino client of mine has carved out a profitable niche in a very competitive city by providing exceptional service. The owner has created a company that delivers superior service by every individual at every level throughout the organization.

Generally speaking, there are three distinct types of customer service. Each level provides value to your customers, but the third level tends to guarantee customer loyalty.

Most companies who have any customer focus at all are adept at providing the lowest of the three levels of service. Sadly, few businesses reach the optimal third level in their product and service delivery.

 Level One – “Processing”

As the name implies, service at Level One is process-oriented.  The service emphasis at this level is on processing customers through the transaction in the most efficient and effective manner. Timely transactions are seen as the key to customer satisfaction. Service improvement efforts at Level One focus on streamlining processes, bundling transactions, eliminating redundancies, removing bottle-necks and making the customer experience as hassle-free as possible. The critical intention at Level One is getting the customer through the transaction quickly so the employee can serve other patrons.

Fast-food restaurants, airline reservations, utility company bill payment processing and, sadly, many healthcare facilities are classic examples of Level One service companies.

Employees at Level One service companies are provided with policies, procedures and processes that are designed to serve the customer faster, better and cheaper. Employees are instructed to strictly adhere to the policies and procedures as a way of ensuring customer transactions will be handled consistently and error-free each and every time.

Obviously this is a very effective way of delivering quality customer service. Unfortunately, if a company limits their service delivery to Level One-type activities the customer interaction tends to become automated, with a focus on rules, methods, procedures and the number of transactions rather than on the individual customer within the transaction. Employees tend to focus on the work – the transaction – rather than on their job – serving the customer.

The approach to service recovery when errors are made within Level One companies also tends to be depersonalized. Employees at this level typically respond to customer problems or complaints by saying such things as, “I’m sorry, but our system won’t let me do that” or “You’ll have to . . .” or “Our policy requires you to . . . .”  or “Our computer is down right now. You’ll have to call back later when it is up again.”

Level One service providers invariably retreat to the safety of a policy or rule rather than stepping out to help the customer. Employees at this level typically do only what the policy allows them to do and go no further.

 Level Two – “Satisfying”

The intent of Level Two service is to satisfy the customer. Obviously this is a noble intention and usually requires employees to go beyond just processing a transaction. It entails meeting both the intrinsic and extrinsic needs of the customer.

Service providers at this level must have the interpersonal skills needed to interact with the customer. They must be professional, polite, positive, responsive and engaging. It requires employees to be both efficient and personable. It means satisfying the customer at both the transaction and interaction levels. Personality and behavior matter in Level Two companies.

Customers typically like doing business with Level Two companies. The employees are nice. The food is good. The atmosphere is pleasant. The products work. It’s a nice experience.

Although Level Two sounds like the pinnacle of where companies should want to be in their service level – meaning great processes and great people – the problem with only satisfying your customer is that 40% of satisfied customers rate the service of those companies as either “fair” or just okay.

It takes more than satisfied customers to build customer loyalty and word of mouth buzz. Satisfied customers often switch providers for no other reason than to try something else. Profitability and growth come from loyal customers who boast of your products and services and tell others of their experience. Boasting takes more than mere satisfaction.

Level Three – “Caring”

People who know me know I like to go camping. Recently I was at an isolated campground in the mountains a few hours north of Las Vegas where, other than the campground host, I was the only camper. While visiting with the campground host he happened to mention the casino client of mine I referenced in the lead paragraph of this article. I asked him if he liked going to that casino. Interestingly, the camp host didn’t say anything about the slot machines, the odds of winning or the food in the buffet. Instead he told me how wonderful the owner is and how welcomed this man makes him feel whenever he patronizes the casino. He said he is always treated well when he is there. He also declared that this casino is the only one he goes to “because they care about me.” He told me it wasn’t just the owner who treated him this way, but every employee at the property. He felt a special bond with the staff there because of the way they cared about him.

Level Three service providers understand the real key to service delivery is developing a personal relationship with the customer. Level Three companies get to know their customers individually and personally. They know who they are and what they like and don’t like. Level Three providers go out of their way to meet the unique needs and preferences of their customers. They’re flexible in their interactions and tailor their response to the individual situation and customer.

More important, employees at Level Three service companies take personal responsibility in both serving the customer and resolving any problems that may arise. Employees follow-up and make personal contact to ensure the customer is completely satisfied with the resolution.

Management in Level Three companies trust the employees and empower them to make the right decision on the front-line. Management recognizes the employees are a far greater asset in wowing and winning loyal customers than any whiz-bang product or streamlined process. Personal, kind, caring, human interaction is the key to customer loyalty and long-term profitability. §


Innovative Management Group is adept at creating company cultures of customer-focused, engaging employees who care about the customers. We offer consulting and training customized to target your specific industry, market and business needs. Please call us to learn how we can help focus your employees on the things that matter most.



10:00 am am  10-23-12
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