Archive for the ‘Lufthansa’ Category

Is it German companies or companies in Germany?

In general, service levels offered by companies depend on the service mindset of their employees. As discussed in this post, German mentality leads to poor service mindset in the average German population. This would imply that companies with German employees offer poor service wherever they operate. However, there isn’t always such a clear cut. Service level depends also on the value that company’s management puts on customer satisfaction by providing for example appropriate training to employees or tying compensation to customer satisfaction. 

Let’s take Lufthansa as an example. The German airline employs mostly German employees and operates world wide. Since it competes with other airlines world wide, it cannot afford poor service levels. Hence, it offers now good service, even exceeding that of some US airlines. This wasn’t always the case but Lufthansa’s management must have realized that customer satisfaction is a profit driver and has significantly improved its customer service over the past ten or so years. 

Siemens Business Services (SBS), the former IT service unit of the German industry conglomerate Siemens, could be an example for German management not realizing the importance of customer satisfaction. According to Siemens, SBS has been struggling for years due to competitive and cost pressures. Could these competitive pressures come from SBS’ lower service levels in comparison with its global competitors? And are lower service levels also the reason for poor performance of other European IT service companies like T-Systems, Atos Origin, or Cap Gemini? Although the IT service market is growing, it is also becoming more global, exposing European companies to another service playing field. 

The poor service mindset among the German population impacts not only German companies, but also foreign companies operating in Germany and relying on German employees. Foreign companies establishing operations in Germany may initially pay attention to the service levels offered through their German employees. If not carefully managed, however, these service levels may morph to the typically poor service levels offered in Germany.  

Wal-Mart, the US retailer, is a good example. When the company opened its first stores in Germany, the sales clerks were providing service levels common in the US. For example, when asked where to find a product, they actually walked with the customer to the corresponding aisle, which is very typical for US retail stores. Now, years later, it’s the typical silent hand gesture “that way”.

As these examples show, the poor service mindset among the German population may lead to poor service levels offered by companies in Germany and may also impact service levels provided by German companies abroad. However, these situations can be avoided if management is serious about satisfying its customers, which naturally leads to satisfying company’s owners or shareholders.