Originally published in the April 2004 Issue of Link & Learn. 

How Lufhansa managed to develop "Brand Ambassadors" and improve customer service, despite severe problems in the airline industry.

One way to provide excellent customer service is through the use of Brand Ambassadors. The term "Brand Ambassador" refers to an employee who has the personality, dedication and capacity to create brand loyalty through their day-to-day interactions with customers. They help make the positive psychic and emotional link between the customer and the company's product or service. A Brand Ambassador is someone who is equally committed to the customer and the organization. They reflect positively on the company, both on and off the job.

Developing Brand Ambassadors sounds like a great concept, but fielding employees with such a high-level of knowledge and commitment is an enormous challenge. It requires a clear customer relationship strategy, enlightened leadership, and management discipline.

Lufthansa Airlines is a company striving to improve its customer service while in the midst of an industry meltdown. Lufthansa's strategy involves targeting frequent business travelers who expect a higher level of individualized service than they might receive on competing airlines. Lufthansa has embraced the Brand Ambassador concept as a critical part of realizing its goal of becoming a premium service provider.

Lufthansa's efforts are paying off. Despite the steep fall in airline revenues, Lufthansa has improved its customer service ratings as well as its employee satisfaction measures every year since 1998. The airline has maintained its market share, avoided layoffs, and prevented the drift into bankruptcy that has plagued some U.S. and European carriers. A key element of this remarkable success is credited to the Brand Ambassadors that Lufthansa has developed throughout its operations.

While serving as a board member with Lufthansa, Thomas Sattelberger was one of the architects of the airline's customer relationship strategy. Moreover, as an executive vice-president, with responsibility for ground services, cabin crews, and product management, he was deeply involved in driving the changes that made the strategy successful. While Sattelberger left Lufthansa for another assignment in July of 2003, he revealed in this parting interview with Kevin Rubens, of Aon Consulting, how developing Brand Ambassadors helped the carrier achieve higher levels of customer service.

Rubens -- Many companies struggle to improve customer service, what inspired Lufthansa to make such a determined effort?

Sattelberger - The airline industry has been deeply affected by the emergence of low-cost carriers, the aftermath of 9/11, and the outbreak of SARS. It's quite likely that only the best and the meanest (cheapest) airlines will survive the slump. Historically, Lufthansa had a reputation for iron-fisted internal cost-management, while being generous to its customers. Building on this legacy, we decided to achieve strategic advantage by going from being just a quality service provider to a premium provider.

Rubens -- Once the strategy was set, how did you proceed?

Sattelberger -- We started the journey by installing internal measures of global performance on key service metrics. We then began to gather competitive measures. For example, every quarter we conduct several thousand thirty-minute interviews with passengers of other airlines. This gives us a picture of how we are doing against our competition. Without this cockpit view, steering a huge service operation is like flying blind.

Despite the downturn, we continue to invest in our business. Lufthansa recently decided to spend 40 million dollars at our main hubs on new terminal amenities for our best customers. We are only the third airline to install beds in business class on long-haul flights. A new internet capability called "fly net" will be added soon. Beyond these investments, we're working to create excellence in economy class, including improvements in food, entertainment, and overall ambience.

And most important, we were determined to capitalize on our investment in people.

Rubens -- Brand Ambassadors are a key element of Lufthansa's customer relationship strategy. How do you measure the impact they have on customer satisfaction?

Sattelberger -- Customer satisfaction with the cabin staff is a key measure of airline service excellence. The worst airlines have an 80% rating and the best (currently Singapore airlines) has a satisfaction level of 94-95%. Back in 1999, Lufthansa's cabin staff satisfaction level was at 87%, which we considered mediocre. Every year we made steady incremental improvements and in 2003, we managed to achieve a 92% satisfaction level.

Rubens -- What changed at Lufthansa to make these results possible?

Sattelberger -- Management kept driving our deep belief that employee commitment creates customer satisfaction and loyalty. In many organizations, the frontline employee is a zero - like in the days of Mao's China, nothing more than a blue termite. That is not how we view our employees.

Lufthansa has been doing employee survey research for several years, followed by yearly action plans. After steady progress, this spring we received feedback showing for the first time that employees trusted management - the people trust us to keep our commitments and steer the company through the crisis. We also received feedback that internal communications, career development, and working conditions had improved.

In turn, customer satisfaction levels improved with our internal survey results, demonstrating the clear link between employee satisfaction and customer satisfaction.

Rubens -- Brand Ambassadors are equally committed to the customer and the company but given the trouble in the airline industry, it's been difficult for US carriers to maintain employee loyalty. Why has Lufthansa been able to stay on course?

Sattelberger -- We have a moral contract between management and employees. Unless the circumstances are truly dire, declaring bankruptcy and laying people off are not considered acceptable restructuring tools.

Lufthansa is committed to maintaining our people on-board. Immediately after 9/11, and again recently, we negotiated a crisis agreement with the unions to avoid layoffs, cuting pay by eight (8) percent. Management demonstrated its willingness to share the pain by cutting fixed salaries and bonus by close to 40 percent. More will be needed to stabilize the situation, but there is a high-level of trust.

Rubens -- Lufthansa is a truly global company. How do cultural differences influence the way you create change?

Sattelberger - That's an interesting question. In Anglo Saxon cultures, people are naive in a positive way, which means that when instituting change, the senior leadership formulates a message, proclaims the message, and cascades the message through the organization. Symbols of change are invented and people are rewarded or sanctioned, depending on their response.

In Germany, people are more skeptical and, due to historical events, they are less inclined to follow a leader's proclamations regarding change. Therefore, we institute change from the periphery, rather than the center, and create "isles of change." For instance, the leadership might support a pilot project in Cologne, and when this is successful we would encourage the connection to other locations. And we use the people involved in the pilot to spread the seeds.

The way pursers prepare their team in the 30 minutes before departure is critical to ensuring that customers have a good experience. We arrange for employees who are considered excellent, to work with other teams and observe and teach. There are no "Employees of the Month" at Lufthansa. Instead, we create perspectives on people who are excellent and word gets around. We communicate improvements and empower service teams to take action. In sum, the key difference is the way we encourage incremental, bottom-up change, and accelerate it from the periphery inward.

Rubens -- What role did leadership play in creating change?

Sattelberger -- The leadership establishes the organizational purpose, sets the strategy, and looks for where medium-sized pockets of success are achievable. The leadership builds the infrastructure for the change and must create an open environment where ideas can surface, action can be taken, and success and failure can be discussed.

It is also very important for managers to connect on a direct personal level with the service employees. That can be difficult with global operations but we do it. We strive to create a relationship based on trust by reducing the symbolic barriers between management and staff. At Lufthansa, senior managers are personally involved in delivering service several days a year. That permits us to connect with people and understand their challenges. I often served with the cabin crew. Luckily they never allowed me to pour coffee.

Rubens -- How did you go about developing Brand Ambassadors?

Sattelberger -- We have 3,000 service managers and 22,000 service staff, so to make change work, we target the managers. They are our primary change agents. We ensure that we select the right people and provide them with a challenging and supportive environment.

We do lots of small, but important things. For example, we give managers internet access from home so that they can prepare for their briefings. We are piloting handheld computers to help pursers manage quality and provide individualized service. We have a lot of face-to-face encounters. We link customer satisfaction measures to rewards, and create learning and development opportunities so that people can progress in their careers.

We try and provide money, love and power. Money is paid for performance; love is appreciation for people; and, power is derived from the influence people have on our operations and career opportunities.

Rubens -- Are there any other lessons you can share?

Sattelberger -- The main key to sustainable change is the focus, personal care and passion for detail that top management should provide. You must be clear and consistent about what you want to achieve and why. The leadership team needs to stay in place over time to make things happen. I was able to keep my team together over the years and that was a great benefit.

I learned that if you can create an environment where 20% of the staff become Brand Ambassadors, you will gain another 40% as conscious followers. In time, the rest will come on-board with passive acceptance, and you will have won.

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Thomas Sattelberger joined Deutsche Lufthansa AG in 1994, and was appointed to the Board of Lufthansa German Airlines in 1999. His responsibilities as EVP encompassed product management, ground services, customer relationship management and service procedures, terminal projects and cabin crews. In July, 2003 Thomas left Lufthansa to join the Executive Board of Continental AG in Hannover, Germany, an international automotive and tire company with a staff of approximately 70.000 where he will be responsible for Global Human Resources. He has served on the Editorial Board of the Journal of Change Management, and has been a featured speaker at many international symposiums and conferences. He has published and authored a number of books on strategic human resource management, the most recent being: Knowledge Capitalists or Mercenaries: Human Resources Management in Network Structures of the 21st Century. Contact: thomas.sattelberger@conti.de.

Kevin Rubens is a Senior Vice President with Aon Consulting and has over seventeen years of international experience having consulted with over 100 companies, in eighteen countries, in the areas of strategic planning and execution, organizational effectiveness, leadership development, organization design, International HR management, and transformational change. Contact: 248-936-5504; Kevin_Rubens@aoncons.com.