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I'd add another, particularly since so often people in customer service are given very little authority, but are just told to repeat a stock set of phrases.
Don't tell the customer what you can't do. Tell them what you can. I've had two fantastic customer service experiences in the past two days, from what would seem to be the least likely sources: a utility company and my local tax assessor's office.
In both cases, the person I talked to said, "Sure, here's what I can do." The result is that even if I didn't get exactly what I wanted, I felt like they listened to me and got as close as they could to what I was asking for.

Business is inherently personal, since there would be no business without the interacting of people. I think you are right when you say that businesses hold back from injecting personality into their operations out of fear. When we put a name and a face on our service, we also put a name and a face on our mistakes, and businesses are so afraid of losing clients or getting sued that they come across as cold and inhuman.
To run with what KateNonymous said, I think a large part of fixing this problem is rethinking the importance and autonomy level of customer service departments. If they start from the beginning by hiring passionate people who want to serve others and are competent at doing so, make sure they have the right tools at their disposal, and compensate them well for the value they add, I think any company can tremendously increase their success.
I don't believe size itself is the problem. We should be throwing out the scripts and hiring people who don't need one.

Only thing I disagree with is your comment of "Tell your customers you take failures personally." I would absolutely disagree with this. I could see this very easily turning customers away. There's a difference between caring about failures that your company has committed, and taking them personally. The problem with taking failures personally is that you respond to both the customer who initiated the failure personally- which in most cases isn't a good thing (at least from the experiences I have seen).
Otherwise, I agree with David. Business is inherently personal, the problem is that over time built into the business creation process is removing the inherently personal side of business.
Another great book on the topic is "Personality Not Included".
Stop using your companies pre-printed thank you notes. Hand write a thank you note! Hand writing is much more personal and it shows you care. More...
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