Every month Rackspace, a San Antonio-based Web-hosting company, recognizes the employee who best lives up to the company’s motto of delivering “fanatical support”—a dedication to customers that’s so intense it borders on the loony. Appropriately, the award is a straitjacket. Vice president David Bryce started his customer-care program with a few simple rules: Criticizing a customer is a firing offense. Be reliable. No news is NOT good news—communicate frequently with customers. Look for ways to exceed expectations and make customers say “wow.” Eliminate hassles—make it easy for customers to do business with you. Rackspace employees are divided into teams, and each team is treated as a separate business, responsible for its own P&L. Every month, employees can earn bonuses of up to 20% of their monthly base salaries depending on the performance of their units by both financial and customer-centric measures: How low is customer turnover? How much did existing customers expand their business with the company? How many customers referred new business? How profitable was the group? Each quarter, employees receive additional bonuses if companywide performance goals are met. Employees are expected to provide great service, and get unconditional management support in return. This year, three employees left because they didn’t “get” Rackspace’s service ethic. Even more surprising, one customer was fired for being abusive to the company’s employees.

Fast Company June 2004