Finding Solutions that otherwise puzzle organizations
Organizations believe that they provide exactly what customers desire. Ask any firm and the Paretto Principle prevails. 80 percent of most organizations believe they deliver exemplary customer service. Ironically, less then 20 percent do. According to research by consultancy Bain and Company, only 8 percent of companies really deliver on customer service.
Our present environment exists with a gap in delivering service. There are numerous reasons for the gap, however, we believe two issues contribute to this gap, a) greed and b) the inability of customer relationships.
Greed Many statements by management consultant Peter Drucker are famous. However, in the book The Practice of Management, Drucker clearly states, “There is only one valid definition of business purpose: to create a customer.” Organizations today are trumped by two fundamental issues- competition and productivity. The focus is so acute that raising revenue, higher profits and increasing productivity all ignore the necessary myopia of customer concentration.
Exemplars of avarice include Starbuck’s, the airline industry and retail establishments. Anytime an organization believes they can achieve higher growth they raise fees, not one CEO or analysts stops to ask what the impact of the client is. Prior to heightened fees, customer remain for two purposes 1) either first mover advantage in the case of Starbuck’s or 2) value such as American Airlines. Yet when fees increase, customers tend to jump ship for cheaper and more appealing alternatives.
The solution for any firm is to thoroughly conduct an impact analysis to determine potential market losses. New revenue means nothing when you lose a core customer base. Customer dissonance cannot be taken for granted.
Customer Relationships Customer connections are very difficult to build- that is to say unless you are focused on your core asset. First, as mentioned earlier, an organizations entire strategy must exist for the client. Strategic questions to ask are, “Who is the customer? Why does the customer buy? What is the value that our firm provides? How do reach disseminate product, service and announcements to our customers? These questions all told focus all beliefs, all values and all attitudes for the company asset. Further, it is imperative to treat the client as such- an asset. Nothing happens, no one gets paid and the electricity does not provide power to the plants unless a customer is involved.
Herein are several techniques to align with your clients-
Refrain from CRM. We do not challenge the power and functionality of Customer Relationship Management. Yet too much resource is placed into these trivial software systems. Stop trying to augment human interaction with software. Just like a political candidate if you desire to press the flesh then do so, do not leave an email to chance.
Interaction. The proliferation of the Internet and technology has taken away the most precious asset of any relationship- interaction. Avatars such as Proctor and Gamble and Southwest Airlines discovered long ago that the better part of customer service is being there! Get off your carcass and stop administering start speaking. Make it a plan to meet with your clients as often as possible.
Enculturation. The entire organization must holistically focus on customer service. Everyone must focus on one thing, why you are in business. Exemplars here are FedEx where the culture suggests, everyone’s employment is based on guaranteed overnight delivery.
Value and Brand. There is little doubt that a housewife buys appliances for service. She buys because of the experience others have had. Speed, cost and service become part of the customer experience relative to value. Cadillac and Coca Cola have become industry standards because of this success. Not many claim to be the Taurus of the business.
Avatars and Advertising. When the service you provide is so strong, your established customer base speaks for you. When the time arrives that prospective clients speak higher than your advertising creating new customer arrivals, your customer gap is immensely narrowed. Crocs the apparel company created a billion dollar entity with little advertising.
Value Again it is so important. What does the customer consider value? The default is price but this is untrue. Price is only part of value. The concept of value is complicated and rather than surmise, the only person to respond is the customer himself. Management must refrain from board meetings and speculation, if your organization desires the response then ask the customer.
Feedback loops. In addition to client visits, ensure success with Customer Briefings, Focus Groups, Interview, 360 feedback and other imperative mechanisms. Customer Service is not one-dimensional and requires that organizations connect the dots between what they learn about customers and what they currently offer to customers. This also includes organizational functions and customer response times.
The roads to customer service and customer loyalty are rocky, uncharted and complex. And, today’s competitive matrix further complicates the issues. There are numerous paths to take and numerous bridges that must be built to close the gaps. However, the most imperative is not discussing matters in the boardroom and leaving the issues amongst the silence. Broken promises are the missing puzzle pieces as they become the keys to future growth. Customer gaps are filled when the culture of the organization from top to bottom, exemplify with admiration and energy an emphasis to a key corporate asset- the customer.
Copyright (c) 2008 Drew Stevens PhD