Best Practices in Client Experience Strategy: Rackspace

Imagine doing a great job for a customer.

Then, picture the company’s chairman stopping by your desk to shake hands, offer praise and reward you by handing over the keys to his BMW convertible. Sound great? Well, it is. Just ask anybody at Rackspace who’s had the use of the boss’s $70,000 car for a week. Loaning the “Rackermobile” to service champions is just one way that this IT hosting company reinforces its two-word motto—Fanatical Support®. By living those words, San Antonio-based Rackspace has earned a reputation for world-class customer support.

Prime Performance has been a customer of Rackspace for several years and I’ve been consistently impressed with their customer service culture.  On many occasions, we have felt that Rackspace was not a vendor—but truly a partner working toward our success. Oddly enough, company managers didn’t think about service early on. As Chairman Graham Weston noted they first chose a real estate business model – buy a building, lease it and hope nothing goes wrong until the lease is renewed. However, Weston saw this wouldn’t work because of clients’ round-the-clock need for reliable IT support. “I realized that the big opportunity was to not just to rent the servers, but to make the servers into a service, make them usable,” he said.

So, service became king at Rackspace. Amazing results followed. Today, the corporation has offices in Australia, the United Kingdom and The Netherlands. It serves 99,000 customers and is one of the “Top 100 Best Companies to Work For,” according to Fortune Magazine. Plus, Rackspace reported profits of $30.22 million in 2009.

Significantly, Rackspace’s superb customer support rests on some simple ideas – all worth adopting:

  • Solve the customer’s problems – Too often, companies think of their needs first and client needs second. Only the reverse brings big success.
  • Listen to the customer – Everybody claims to do this. Few do it well. At Rackspace, an issue is not resolved until a customer says it is.
  • Hire carefully – Rackspace hires customer service personnel for their people skills. Then, they teach them technical ones.
  • Reward superior performance – It doesn’t have to be a BMW, but as a company leader, be willing to put your money where your mouth is when it comes recognizing superior customer support from your employees. The key is to draw attention regularly to behavior that all employees can follow.
  • Make the value real Help employees understand the impact good support has on the company’s financial health; that their service has a dollars and cents impact on your company’s bottom line.

Of course the Rackspace model isn’t one that’s meant to be cloned. Your company’s client service strategy must meet the unique needs of your company and industry.  However, Rackspace demonstrates how sustained growth and customer loyalty don’t have to be won through a price war with the competition. Instead, they made a company-wide commitment to providing the best service on the market and created a strategic plan for achieving this goal. At Prime Performance, we continue to be impressed by Rackspace’s success. And we remain loyal customers.

Watch the brief video below about the Rackspace Service Culture:


Company Profile

Name: Rackspace US, Inc. (NYSE: RAX)

Industry: Telecommunications Resellers

Chairman: Graham Weston

2009 Employees: 2,774

2009 Sales: $629.0 million