Company: Rackspace Managed Hosting, San Antonio, Texas
Company Description: Rackspace Managed Hosting is the fastest-growing managed hosting provider for customers of all sizes – from start-ups to enterprise customers. The company offers a wide range of vital managed services needed for complex Web sites. Founded in 1998, Rackspace has built a world-class service organization based on its philosophy of Fanatical Support™ and hosts 15 percent of the Fortune 100 companies.
Nomination Category: Organization Awards Categories
Nomination Sub Category: Best Customer Service Organization

Nomination Title: Fanatical Support in an unlikely industry

   1. Tell the story about what this nominated functional organization achieved in 2004 (up to 500 words). Focus on specific accomplishments, and relate these accomplishments to past performance or industry norms. Be sure to mention obstacles overcome, innovations or discoveries made, and outcomes:

The IT market is known for its “denial of service” mentality. Rackspace found its
differentiator and ultimately its success delivering world class customer support,
what we call Fanatical Support. We realized the one thing customers feared most
is that their online businesses could be stranded in the event of a technical
failure and there would be nobody there to help them. We addressed that fear and
focused on providing excellent support to our customers when no one would. We
view ourselves as a service company – not a technology company – where we go
above and beyond to exceed every customer’s expectation. Our overall customer
focus is the key to our success. Here’s how we did it:

1. We ripped out the automated phone support system and offer live help
24/7/365. Call us at 2 am and the support quality is just as good and fast as at 2
pm.

2. We segmented our customers into three groups by their complexity and
technology needs, providing them with a specialized service that best matched
their business.

3. All Rackspace employees are compensated based on customer loyalty. Every
month, employees 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.

4. We make sure we have the right people in the right job. We recently
reassessed all of our people and reassigned 25 percent of our employees to new
positions to take better advantage of their skills.

5. The most coveted award at Rackspace is the “Straight Jacket Award” where we
recognize a Racker that has gone above and beyond to “fanatically support” a
customer. We strap that employee into a real straight jacket in front of the entire
company and their picture then resides on the Rackspace wall of fame.

As a result, Rackspace added 1,800 new customers in 2004 including Miller
Brewing, EMI Music, National Geographic and Atari. Evidence of our success
comes not only from our 38% new customer growth last year, but from the growth
of our installed base.  Our existing customer base stays with us and continues to
spend more with us by upgrading services and using Rackspace to host new
projects. In fact, our organic customer growth supersedes any customer loss on a
net basis.  Ninety-seven percent of our customers would refer Rackspace to a
colleague and 50 percent of new business comes through referral. Rackspace has
received numerous awards for its customer support and was voted readers choice
in Linux Journal and MySQL magazines. We grew 55% in 2004 and surpassed the
$100 million mark. Rackspace has been profitable for four years.

Although most don’t equate good customer service with technology, Rackspace
and its 550 employees strive to restore service credibility to the information
technology industry and be one of the world’s great service companies. To get
there, we’ve had to look outside our industry for inspiration – to companies like
Ritz-Carlton, Nordstrom and Southwest Airlines. We’ll know we’ve been
successful when we become a household name and other companies implement
our model of Fanatical Support.

   2. List hyperlinks to any online news stories, press releases, or other documents that support the claims made in the section above. IMPORTANT: List each link on a separate line, begin each link with http://, and enclose each link in square brackets; for example, [http://www.website.com]:

http://www.rackspace.com/downloads/articles/cuckoo_for_customers.pdf

http://www.rackspace.com/downloads/articles/smallest_survive.pdf

http://www.inc.com/partners/sbc/articles/custserv.html

http://www.msnbc.msn.com/id/4547279/

http://mediaproducts.gartner.com/reprints/rackspace/123741.html

http://www.rackspace.com/aboutus/listings.php?hidelistings=1&detail=1172

http://www.rackspace.com/aboutus/listings.php?hidelistings=1&detail=1163

   3. Provide a brief (up to 100 words) biography about the leader(s) of this nominated functional organization:

Graham Weston, Rackspace CEO, became involved with the company in late
1998 when he decided to invest in the start-up company and assist with corporate
strategy, marketing and service delivery. As our CEO, Weston focused his time
and energy on setting the direction for Rackspace as it carved out a leadership
position in the web hosting market. Weston is also active in real estate and, as
CEO of Weston Properties, owns 700,000 square feet of industrial and office
properties in Texas, including the Weston Centre in San Antonio's business
district. In 1989, Weston founded Assessment Technologies, an ad valorem tax
consulting firm.