The CX Lie CEOs Believe—And How It’s Costing You Millions

What if the reason your customers are leaving has nothing to do with the price that you charge, the product, or even your competition? What if the quiet killer inside your business is the service you think is good enough? Hey, friends, I'm Jason S. Bradshaw, and welcome to another edition of Chats with Jason, the show that helps you transform the experience to transform your business and the world around you. Today, let's buckle up because I'm joined by the man USA Today, Time, and Entrepreneur magazine calls the guru in customer service, John scholl. For nearly 50 years, John has been helping companies crush their competition not with gimmicks, but with world class service strategies that radically reduce defection, energize employees, and skyrocket profits. From training the US military to Fortune 500 giants, to building multilingual programs that shift team behavior at scale, John isn't here just to give you the theory. He's here to hand you the playbook for lasting change. We're diving into the myths, the mindset, and the methods that turn ordinary businesses into legendary brands. So grab your notepad and join me in welcoming John to the show. John, it's great to have you on the show today.

Jason, it's good to be with you. I can see why you're so good. You're very, really good at what you do.

I appreciate that. John, it's an honor to be on the Global Guru's top 30 list with you and of course, an honor to have you on the show today. John, was there a moment early in your life when you realized that ordinary service just wasn't enough?

It was 1979 before you were born.

I was born in 1979.

You were? Okay. So I saw organizations spending a fortune on marketing and advertising. And as the customer walked through the door, they would issue baseball bats to the employers and they would hit them on the head as hard as they could to make sure they didn't come back. And I just couldn't understand it. I said, this is really stupid. I said, my thought was that if you treated the customer like a king or a queen, they'd come back and they'd give you a lot of money. So then I said, jason, why is customer service so bad? This is 1979. And I decided it's because nobody had ever been trained on customer service. There was nothing available. So I decided to write the world's first customer service training program. I thought I would instantly be rich. Okay was released in January of 1980. And then the first thing that when it gets released, people would say, what's customer service. And then you want to train employees. We only work with executives. People never understood the power of the employee. That's how I got started. And today, because of COVID I think customer service is as bad as it was in 1979.

Yeah, it's disappointing that we've seen organizations divest in the investments that they had originally made in customer service and experience. It leads me to my next question, John. Most companies say that they really do care about the customer and the customer experience. Some even go to far as say they care about the employees. But as you've mentioned, so many are still getting it wrong. Why?

They think that customer satisfaction surveys is the solution. They spend all their money on doing customer satisfaction surveys. I don't think most people respond because they know that if you respond, nothing happens anyhow, and so they're just a waste of time. If you took. I know this is true in the US if you took the TAP 5000 CEOs and you had them tell you, how would you rate your customer service? Then I'm glad you asked. We're at least a 9 or a 10. And then if we asked 330 million people in the United States, how would you rate customer service? They'd say it's awful. So the difficulty we got is CEOs have never been in their own company. They don't touch all the different points in their own company. So they don't experience hell every day like everybody else does. I think customer service is awful. I think the CEOs don't understand it. I think they're living in. When Time magazine did their cover story Customer Service, it was their biggest selling issue. This a number of years ago, by the way. I said, the only thing that matters to a CEO is show me the money. And I think the number one reason firms are not focused on the service strategy is they don't understand how money falls from the sky like snow right into your hands if you deliver an incredible customer experience. Nobody wants to compete with Amazon. Nobody wants $65 billion in profit. Nobody wants $65 billion increase in sales, 11% increase in sales last year. Nobody wants to compete with Apple, who has $99 billion in profit. These companies make too much money for other companies to want to compete with them. And Amazon, in my opinion, and Apple are two companies that are a 10 in customer service, and they're flawless at it.

Yeah. And even when they get it wrong, they recover quickly, which is important.

Amazon has a better grasp of Service recovery than 99.9% of all companies in the world, including the United States.

So in thinking about those CEOs that you mentioned, those faceless CEOs that would say probably a 9 or, or at least a 10. At least a 10 out of 10. That's an interesting response. What lie are they believing? Like why do they believe this lie that they actually are a 9 or a 10 out of 10?

Think the customer satisfaction surveys are slanted to give them a lot of bullshit that just feeds their ego. If you take a look at a lot of these top level executives, they don't really get their hands dirty inside their own companies. And as a customer, they have other aids that do all this stuff for them. So everything's greased. I don't think they understand how awful it is. I don't think they call their local phone company and get an AI response, which is a chat box with no humans to it. And by the way, AI, that's the talk of the town and those are the hot words. What AI really means is screw the customer because we're going to use robots and you're never going to talk to a human again.

So do you think that turn or that twist towards self service or automation through AI, do you think that's purely driven out of greed for profit and that they're not seeing the bigger picture?

Could be stupidity. I was at Walmart earlier this afternoon. My wife wanted to get a dog bed and we got some other stuff there. 80 to 90% of all the checkout lanes were self checkout. And it was at the very end there were two aisles that had humans. And I like humans. I had a bunch of stuff that had to be weighed and I couldn't figure this out. You know, if you go to Costco, which is a service leader, you could have five people ahead of you in line and with backs, baskets full of food. Okay, and you're going to be out of there in five minutes because they have two people at every checkout counter. One person, sometimes they have three, but they have somebody that's taking your stuff out, giving it to the person. I mean, they are so fast. It's unbelievable. There's only a handful, Jason, of companies that seemed to understand the power, exceptional customer service. I invested in 2003 in nine service leaders at that time, a thousand dollars each because I wanted to see what happened with numbers, just instead of all the bullshit, sorry if I use that word, but I just wanted to see card numbers. So the thousand dollars in Amazon is worth $120,000. The thousand dollars in general Electric because they were a service leader back. They're not anymore, is worth about $1400. The thousand dollars in Costco is worth about $34,000. The thousand dollars of Home Depot is worth about 20, $22,000. But it's JetBlue. JetBlue, if you went back 25 years ago, was just on a rocket ship going straight up to the moon. And that stock today, that thousand dollars worth about $450, they didn't understand service recovery. They had a winter storm about 15 years ago and they left 113 people on a plane for 13 hours and they didn't know how to handle it. The CEO lost his job. They sold 13% of the company to Lufthansa. The stock is down. This is like 25 years ago. The stock is falling in half from what I paid for it 24, 25 years ago. And meanwhile Amazon's worth 120,000. So those companies that truly understand the customer experience and hear Flawlessman, the financial payoff is huge. I believe any organization that can build the brand around the customer experience, I'm not talking baloney, I'm not talking a bunch of bs. I'm talking about that really builds a brand where they're known for their customer service can increase the value of the business 2, 3, 4, 5, 10, 20 times a thousand times. Not 10%, not 20%, we're talking hundreds of percentage. So the key is that executives got to understand this is strategy. Whether you're a two person company today or 20 people or 2,000, you got to get. What I talk about is three things you got to do. You got to get the CEO, management to understand strategy. If you don't understand strategy, all this is irrelevant. The second thing is the leadership team has to walk the turn. Everybody has to be inboard. And then the third is you gotta have the tools to train and develop the staff because the most important person is the little employee. I was on the phone this afternoon with the CEO of Ethiopian Airlines and I told Messman, I said, the most important person in your cubby is not you. It's that little guy that's floating through your system. And if he or she does a really good job, you look like a hero. And if they do a lousy job, you look like a bum. The most important person is that little guy who we forget to train. We don't value, we don't appreciate. There's no love, there's very little recognition for that individual. And yet that's the person that has your customer in your hands. They could be on the phone, they could be on website, they could be in person, but they have your customer in your hands. And if that person's awesome, you look like a hero. Everything goes on.

So with all respect, John, it's not like you hold this secret about the fact that customer experience leaders like Amazon, Apple, Costco, that because they lead in customer service, customer experience, and because they consistently stay at the top, that return on investment in customer experience and their people in that process pays off to 10, 100 times fold. Like every CEO of every Fortune 500 company would see these results, just like you and I do, and certainly the top line financial results. Why? Why do they still consider customer experience as a cost and not an investment when they can see the fruits of it? I guess not everyone wants to be Amazon, but everyone wants to have profit growth like Amazon.

I don't think they really understand why Amazon is so successful. I don't think they understand why Costco is so successful. See, there's nine steps I talk about. And by the way, one of those is price. Price is really important. Most companies are not frugal. They have too many employers. If you leave the United States, you go to Africa, you go to Latin America, you go to Asia, Russia, most of These companies have 25% more people than they need. And their concept of customer service. You put more ornaments on the tree, you have more employees. And the more employees you have, the better customer service. It increases your overhead. They don't understand that if you had high performing people, you don't need as many. I do a lot of work in Africa and a lot of work with government and I tell everybody you don't need more people. You got 25% more than you need. What you need are high performing people. You have to develop high performing people. If you look at the young people coming out of schools right now, and particularly it's even probably worse in the United States. They're on their phone, they have no social skills, they don't know how to communicate with people, and a lot of them are getting fired because they don't have the soft skills. They don't even know what customer service is. They've never interfaced and they have bad work habits. They think you should just get paid a fortune without showing up. And so the young people today don't have the work habits that are really required in the workforce. And they have not developed their social skills because customer service, a lot of it is just strictly the soft skills. Do you smile? I live in Minnesota, and in Minnesota it's called Minnesota Knives. Everybody smiles. I created a brand new program called Smart and the only place I really can't sell it is Minnesota because everybody smarts. It's just part of the Minnesota nice culture. But as I travel around the world, I was in Azerbaijan in the country of Georgia a couple years ago and not one person smiled. And I went through a supermarket chain about one o' clock at night. I did it twice. I made eye contact with about 20 people. Not one person smiled. So, you know, the first step in customer service is to smile. Now you could go to Harvard and they're never going to teach you how to smoke. There's no high school, there's no college that teaches any of these fundamentals. So if you wanted high performing, customer driven employees and you're an owner of a business, where are you going to find? You can't. You got to develop them yourself. You got to train and develop the people yourself. Because the only habits they've seen are bad habits. They're used to see it really bad service and they assume that's the norm. In fact, they think bad service is good service because they've never seen good service.

Yeah. Or that they're empowered when they have to serve themselves at the grocery store or at the airport.

When you talk about the word empowerment, Jason, trying to get an employee anywhere in the world to make an empowered decision for $5 will take two miracles at one time. And I'm talking about service leaders. Amazon is the exception. Apple is very good. But I have never had anybody at Amazon ever say no. But in most companies, the first word we train people on is the word no. And we think you're empowered. As long as you can say no. No. That's not empowerment. Empowerment means you gotta be able to make a decision in favor of the customer in seconds and the customer better walk away being over happy. So the single goal of every business, Jason, should be to have over happy customers. If you have over happy customers, there's no competition. You own the market.

Yeah. Yeah. You're not giving that over happy customer a reason to look elsewhere. Right. Because why wouldn't they? In your words, over happy. So if a leader is listening or watching along today, what's the number one thing that you think that they should start doing if they want to be more customer obsessed or more focused on delivering over happy customers?

I'd train your entire staff on customer service and it better be with something new and fresh constantly. So don't say 10 years ago I put everybody on my staff through this Magic program for four hours. And by the way, the employee turnover rate in the world is about 25%. So let's say you did something 10 years ago. The chances of some of those employees still being with you is very low. So the people are gone. But we think we did it 10 years ago. And we know that we can take Charlie. We're going to put him or her in this magic program. Maybe it's from service quality instrument. And our programs are going to be so powerful, we're going to change a person's life and make them instantly perfect. It's not going to happen. I'll bet you, Jason, that you've read 20 or 30 or 50 books on customer service.

I have indeed.

If you're going to be really good at this stuff, you got to constantly improve yourself. You got to get better and better. I have really good material in many different languages, but so what? That's like going, you want to be a medical doctor and you go to medical school and you take one course for two hours and you're done and you're ready to graduate, you're ready to operate, or you want to be a pilot and you take one lesson and you're ready to fly that 7:47. If you look at the athletes in the Olympics, every gold medal winner either wins by a fraction of a second or a fraction of a point. It's not like there's 20 points difference or 22 minutes difference is just a tiny fraction the difference between gold and bronze and silver. And those that win the gold financially are the stars. We need to develop gold medal winners in our businesses. That's if you want to destroy your competition. So you can have price, you can have all the inventory. But what would happen if you had the best people in whatever business you're in and they were more customer driven than any of your competitors? In my opinion, that's how you dominate the market. And that's called word of mouth advertising.

So what would you say to the leader that says, I can't afford to train my team members every year?

You can't afford not to. I have a program called the Service First Video library. We charge $199 a month for 10 months to train your whole workforce. If you can't afford $199 a month wherever you are in the world, you shouldn't be in business. It's a magic program. It's really effective. With that program, we took one of the worst performing banks in China. The bank of Communications took their least performing district and moved it to number one in six months. Customer service really works. The difficulty that I've seen, my last book was called Relentless. And the reason I wrote the book Relentless is because I've seen people focus on customer service for a year, two years, and then they're done. You can't give up. You can't say, we don't need customer service anymore. Every year the customer expects you to get better. They don't want you to slide backwards. And the other difficulty that we got is that most people, most employees have self imposed limitations. They say, I'm just a janitor, I'm just a security guard, I'm just a, a retail worker, I'm just a hygienist. And they got this ceiling of cement about six feet over their head, really heavy cement. And they don't dream, they don't visualize. So we have to remove those limitations and get people to believe in themselves, to want to become indispensable and extraordinary. If you were to read Elon Musk's book, by the way, it's a must read for any of your listeners. I think this book is about 800 pages. And when I read a book, I highlight it, I mark it up, I put stars on it. All my books are highlighted. When I read a book, I grade the book. You might not see it here, but I put down the date I read it. I graded the book, graded this one in A plus. But there's two things I learned from Elon Musk in the book. One is he, he wants speed. And speed is now twice as fast. He wants it 10 times faster than you're used to. And the second thing is he wants to eliminate cost by 10 times. And he's done that with his businesses. So you've got to keep reading and building yourself and massaging your mind and you got to keep developing the people because people aren't happy where they are complacent. But the problem is if you have a business and you want to be better than anybody in your market area, wherever you are in the world, you just got to develop your people. And a lot of that is mindset because as I said, many of your employees have self imposed limitations that prevent them from dreaming, prevent them from achieving more and even yourself. We individually have self imposed limitations. Just gotta keep pushing ourselves to a higher plateau, to a higher level. And I think once you stop, you're dead. I don't think ever slowed.

Yeah, yeah. So much that we could pull out of that. I just want to talk about Elon Musk a Bit further. You said his two takeaways was he wants to go fast or faster, 10 times faster if he can. He wants to reduce cost, not just a little bit, but 10 times reduced if possible. But at the same time, if I think about Tesla Automotive specifically, he really disrupted the automotive industry. I spent a number of years as a senior executive in automotive, and while people were critical of his product, they were also scared by the level of service that he was delivering. He completely changed in many parts of the world the way you purchase a car. And this isn't having a slide at dealerships. This is just the sheer fact that he changed the way that you purchase a car. And then he said, you know what? If your car needs some service, nine times out of 10, we're going to come to you instead of you coming to us. How does someone get the mindset that says, I can go faster, I can do it cheaper, but I can deliver a better experience?

I think you read books on customer service, first of all, and you don't read one book. Yeah, I think you need to read a variety of books. I got a bunch of my books behind me. Achieving Excellence or Customer Service? Relentless Cashing in, Moving Up, Empowerment, A Way of Life. And I got a lot of competitors books. I got other people's books in here and I love reading books from CEOs. You know, that's what I learned. By the way, one of my really good books, I don't know where it is. Oh, here's one built from scratch. This is from Home Depot. You know, these guys built beneath around the customer experience. I rated this book an A plus. I finished reading it June 17, 1999. Now with any of my books, I get them all highlighted. I could read this book in 10 minutes. But this is what Bernie Marcus and Arthur Blank did. Sam Wilde's book, Made in America. Here's the interesting thing, because I used to track all of Walmart sales and I used to compare them to Kmart. Financially, when Sam Walton was alive, the CEO compensation was about 100, $200,000 a year. Sam Walton built a business around customer service and price. About 15, 20 years ago, Walmart forgot about customer service and just focused on price. The thousand dollars I invested in Walmart is worth about $6,000 today, which is good. But the Amazon's $120,000, which is much better. I got the hard numbers down here if you want me to read any of them. I don't think people understand the strategy. I don't think they understand, as I said earlier, how Money falls from the sky if you can deliver this incredible experience. And these guys were fanatical about it. So you got to keep reading these books. And I always recommend you take a highlighter and then highlight the book as you go through it so you can read the book again in 10 minutes. The Elon Musk book would take about 20 to 30 minutes because I got so much stuff highlighted. I mean, it's really good. Next to it is my book from Steve Jobs by Walter Isaac. And what a great writer this book I Rated An A November 22, 2011 is. When I read this book, I have all these books behind me. So, again, going back to your question, you can't read one book. Let's say you're an employee and you want to make more money. See, I think any individual listening to this podcast could dramatically increase their income. I think it's impossible not to increase your income if you're customer driven, if you take care of the customer, if you're building your mind, if you do more than what anybody else asks you to do. And you got to think differently. Elon Musk puts his pants on one leg at a time. He just thinks differently. And we're programmed into what everybody else does that we forget to think differently. Everybody loves great jobs, care where you are in the world. Everybody loves great service. They just don't see much of it.

Yeah, yeah, yeah.

You can't say, in May of 2025, we're going to have great service for a couple days. It's got to be a sustained commitment. Every day you got to get better and better. If you listen to Jeff Bezos, and I love his letters to the audience when he says, the customers are very demanding. They want you to be better every year. If you look at AWS with Amazon, which is now the cash cow for Amazon, they're just bleeding money like it's no tomorrows. The reason AWS does so well is every single executive uses Amazon and they see this flawless execution. Amazon comes along and says, hey, we'll help you in the cloud. And all these CEOs, if you could do what you do with the retail, I'll sign up. They're growing like 35% a year, and it's probably 80% of their profit. The numbers are incredible on what AWS does, but it's an example of how they build a brand. Jeff Bezos does stuff different. He's willing to spend billions of dollars trying something brand new and put all the effort behind it. And he says, sometimes it works and sometimes it doesn't.

So as we come towards the end of the show, I've got two questions left for you. John, a bit of a. Sorry, what was that?

Okay, it goes so far.

I know I could sit here for hours, but I'll respect the fact that it's your evening. But if you were to explain customer experience to a five year old, how would you explain it to them?

Smile, be nice, take care of the customer, treat them special and they'll come back.

Yeah. Words to live by. And as we go to close out the episode, John, if you had to distill your five decades of experience in customer service and customer experience working with some phenomenal brands, making a massive impact in the world, what is the one truth every business owner must live by?

The customer decides where he's going to spend his money and it's his decision. And if you want it, you better take good care of the customer.

Couldn't agree more. What a masterclass in turning service into a great competitive advantage. Whether you're a CEO, a team leader, or just getting started, John has reminded us today that great service is isn't a department, it's a decision. And a decision that you need to implement every single day. A decision to lead with intention, to train with consistency, and to treat every customer interaction like it's the one that defines your brand. Because the reality is, it is. If there's one truth to take away from today's conversation, it's this. When you transform the experience, you transform the outcome. So what will you change starting today? If this episode sparked an insight, shifted your mindset, or gave you a tool to grow, please do share the episode with someone who needs it. Subscribe to Chats with Jason on your favorite platform. Leave a review. And remember, great experiences don't happen by accident. They happen by design. Until next time, stay intentional, stay inspired, and keep transforming the experience. It.