If you want to keep your customers, you must empower your employees.

Empowerment. The word—and the concept—all too often causes employers and employees to break out in a cold sweat. It shouldn't. It should be embraced and celebrated as a critical element in your formula for success.

Empowerment is the most difficult concept companies attempt to implement. The problem is that executives don't understand what empowerment is and how it works.

My definition of empowerment is this: allowing employees to do whatever they can—including bending and breaking company rules—to satisfy the customer. Few companies, however, are willing to give their employees that authority—and few employees are willing to accept it. Why? Executives think their employees, particularly frontline employees who often are earning minimum wage, are so unintelligent that dishonest customers will take advantage of them. Employees, on the other hand, think they'll be fired or reprimanded if they don't follow the company policies when dealing with a dissatisfied customer. .

E Wong, the largest retailer in Peru, recently hired me to train 8,000 of its employees in the art of customer service, which includes empowerment. The two go hand in hand; you can't have exceptional customer service without empowerment. E Wong's CEO Erasma Wong recognizes and enthusiastically supports both. As a result the company he heads is a service leader in Peru.

"We are not a supermarket with great customer service," he says. "We are a great customer service organization that happens to be in the supermarket business. Empowerment at E Wong's is bending and breaking rules. It's taking care of a customer to the customer's satisfaction—not to E Wong's—satisfaction."

The goal with empowerment should be to have millions of overly happy customers, just as it is for E Wong's. Yet too many executives think their employees will "give away the store" if they are empowered. What's the worst that could happen—that they'll have millions of overly happy customers? If that happens, the company would be another Southwest Airlines or Land's End. Remember, it costs a small fortune to get dissatisfied customers back but almost nothing to keep them.

If other companies throughout the world adopted E Wong's attitude they would be successful beyond their wildest dreams. Mandalay Bay Resort in Las Vegas could use an attitude adjustment when it comes to empowerment, something I experienced firsthand when I was checking out of the hotel recently and discovered that I had been charged $40 for local telephone service while using the Internet. There was no sign in my room saying that the hotel charged by the minute for that service and, when I registered my complaint about it, the employee at the front desk said he was unable to remove or reduce the charge. He then called his supervisor, who was only willing to reduce the charge by half. Needless to say, I will never again stay at Mandalay Bay.

Even Nordstrom's, supposedly the most service-oriented retailer in the United States, has policies that defy logic and result in the loss of customers. I am one of them. What drove me away was this: When I went to pay for a $95 necktie, I was told I couldn't use my Nordstrom's credit card because I hadn't used it for a year. Even though I had charged thousands of dollars on that card over the years, the employee was not empowered to let me use my card. So I left the tie at the counter and defected.

On the other hand, companies such as the Spur station near my home in Minneapolis have empowered their employees to keep their customers coming back to them. I buy minnows for my pet duck for $2.75 every week from that Spur station. The first time I was there, I asked an employee there if he would give me an extra scoop at no charge. He did and each Spur employee continues to do so each week. They don't have to check with the manager first; they just give me those extra minnows. That scoop costs Spur only 10 cents—but it keeps me coming back week after week.

I am expecting the lack of empowerment—which has resulted in deplorable customer service—to cause quite a stir with U.S. cell phone providers this fall, when number portability becomes available. For years, providers have treated customers poorly, knowing that most of them wouldn't defect, because they would have to leave their phone numbers behind. Now, as the result of action by the Federal Communications Commission, customers will be able to keep their cell phone numbers when they change providers—and I expect many of them to quickly take their business to providers who offer the best service.

During 2000, when the worldwide economy was soaring, most company executives weren't concerned about keeping their customers. If a few left, they thought, there were many more to take their place. The economy has changed drastically, however, and keeping customers has become a focus for many companies.

If you want to keep your customers, it is critical that you empower your employees. You must train them in the art of customer service. You must give them the authority to bend and break company rules in order to take care of your customers. You must support, encourage, and celebrate their efforts to do so.

Service leaders know that the goal is to keep customers, not to protect the merchandise. If you empower your employees to give your customers what they need, those customers will keep coming back to you, and you will succeed.

John Tschohl is an international management consultant and speaker. Described by Time and Entrepreneur magazines as a "customer service guru," he has written several books on customer service, including e-Service, Achieving Excellence Through Customer Service, The Customer is Boss, and Ca$hing In. John also has developed more than 26 customer service training programs that have been distributed and presented throughout the world. His weekly strategic newsletter is available online at no charge.