Customer Services - The Differentiator.
By Dr. Rick Johnson
Wednesday, 6th February 2008
Customer service is the one consistent differentiator in an economy with perceived parity of products and services between competitors -Follow these six (6) management tips to ensure customer service meets your customer's expectations.

Tip #1: Telephone System

When was the last time you evaluated your telephone system? Industry studies prove the telephone remains the most common method customers choose to communicate with suppliers. Do you have an automated system that can drive customers crazy because they have to choose from a menu? People want to speak to a live person. Going thru a list of options can be annoying. Take the time to check out your system and how your customers feel about it.

Tip #2: E-mail

The convenience and universal acceptance of E-mail by customers and vendors is obvious. The main problem is: customers send E-mail to individuals, e.g., orders, RFQ's, and questions go to individual Customer Service/Inside Sales reps. Vendor responses often do too. When the recipient is not available, how can you ensure timely response if only the individual recipient can access his/her E-mail?

Consider this: Customer E-mail is sent to one general E-mail box accessible to all. Individuals pick up their own messages. When someone is out, another person is assigned to pick up and respond to that person's E-mail. To ensure proprietary E-mail only goes to intended recipients, e.g., managers, intra-company E-mail, work groups or teams, separate E-mail addresses are established.

Tip #3: Call Your Company

One customer service principle goes like this: "Pay attention to the details. It is often little things that cause customers to seek another supplier like what happens to them when they call you. Additionally, call several times to determine if you get the same price and service from different people. It is not uncommon to have different interpretations of the same pricing system by inside sales people. Managing your pricing system more effectively can often add as much as two points of margin.

Tip #4: Customer Satisfaction Surveys

How many lost or inactive customers did you have in the past 12 months? Why did they become inactive? When customers take their business elsewhere, there's usually a good reason. Check out these quotes:

"We consistently lose 35% of our customers annually and 30% of our existing customers are new annually."
"In the past 2 years, we have lost over 50% of our accounts. It's the big customers that hurt most, but we're losing all types and sizes to competitors. Many of them didn't even exist a few years ago."

"We wipe inactive customers off the files once a year. It's too depressing to look at them."

Industry studies prove it costs five times more to get new customers than it does to retain existing accounts. A customer-focused service strategy is needed to earn loyalty through customer satisfaction and prevent lost accounts. Instead of just listening to informal, inconsistent feedback from field sales and other employees, create an annual customer satisfaction survey by mail supplemented with telephone calls. What do your really customers think of you? Ask them! Make no mistake; the "Voice of the Customer" is critical to creating and maintaining service excellence.

Tip #5: Your Customers View of Service

Customer service is not confined to front line personnel. Front line services, and the personnel who deliver them, are "products" of strategic issues addressed by top management. Many surveys indicate that customers see a need for better internal operations for order handling, improved customer service with outside and inside sales, and better awareness of cost controls and how they affect price.

Some typical customer comments:

"I can't write ten (10) POs at $45.00 each just to buy from you! You need to eliminate that cost or we'll go elsewhere!"
"You've got the best product mix and Inside Sales people. You deliver complete and on time! That's the good news. The bad news is: in the past 30 days, you sent us 300 invoices. We need a full-time clerk to process them! We can't afford to do business like this!"

"Whenever I call, your line is busy. If I leave Voice Mail, I don't know if or when you'll call back or if I'll be here when you do. I want suppliers who answer calls and take orders at my convenience!"

These examples demonstrate business process and practice problems. All are beyond the control of front-line personnel and are the purview of managers. All require managers to put customer focused performance measures in place and periodically conduct customer satisfaction surveys. Make sure that you have a specific documented customer service strategy that includes process and structure that encompasses all phases of service excellence.

Tip #6: Customer-Focused Measures

Though companies typically measure sales and profit contributions, customer-focused performance measures are different. They prove how your services affect customers. Not to be confused with sales measures, customer-focused measures explain reasons for lost sales, retention problems, time-consuming and costly complaints, and cost-redundancies. These measures 'benchmark' performance from the customers standpoint, i.e., the one whose opinion counts!

Consider these metrics to support service excellence.

1.# of order errors by type and frequency and person responsible, e.g., wrong item, too much, too little, order taking error, order entry error, freight error, etc.
2.# of returns (Credits) due to distributor error, e.g., damaged goods, defective products, etc.
3.# of back orders
4.# of expedites
5.# of partial shipments
6.Order size
7.The phone system number of calls per sales person, dropped calls, time on hold, number of voice mails, time of call backs
8.% of on-time delivery of the right quantity and the right product to the right place of blanket orders, contract, or special agreements, all other orders Telephone, Email, Voice Mail and FAX measures to prove how well inbound contacts are managed

What you measure proves your commitment to service excellence and what you expect of your employees. Employees pay attention to things that are measured and tend to ignore things that are not. (Hawthorne effect) When customer-focused performance measures are used, your employees know exactly what you mean by service excellence.

Rick Johnson, expert speaker, wholesale distribution's "Leadership Strategist", founder of CEO Strategist, LLC a firm that helps clients create and maintain competitive advantage. Need a speaker for your next event, E-mail rick@ceostrategist.com . Don't forget to check out the Lead Wolf Series that can help you put more profit into your business.

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