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‘You’ll always eat well and never be told the truth again’

March 31, 2010

In our media saturated age, we have access to information and choices.  In the Metro NY area, Verizon’s FiOS is competing head on with the cable companies, as are the satellite based services.  People want to feel their business is desired, not taken for granted, and the ability to change vendors is pretty easy so protecting your base has to be a major consideration. GM was sure it was the big kahuna in the US car market, only to amputate brand after brand in an attempt to survive as a major player. Never take your customers for granted is the operative phrase for 2010.  Economists are confused if we’re in a full recovery or the beginning of a W recovery’s peak before the fall, but in either event, every dollar a consumer will spend should be taken very gratefully.

Take for example my wife’s 2006 BMW.  Given BMW US’ huge drop in sales, on the order of 25%+ year on year for 2 years now, you would think BMW or the dealer would be contacting her, trying to get her into a 2010.  Who would know she’s paid off her BMW and can either keep it for a while or buy a new vehicle?  Every extended warranty company, that’s who and you would think the dealer, at the least, would be able to see who purchased 3 years ago and might respond to a call or offer. What’s the rule about sales?  The least expensive and therefore most profitable new sale is to an existing customer and apparently BMW sales training forgot that module. So let’s modify our ‘never take your customers for granted’ operative statement for 2010 by appending ‘and you’re empowered to do everything within our policies and programs to make them happy and loyal’. The counter example – We also have a Honda and with 3 months of payments left on the loan, Honda Finance has already contacted us saying they’re forgive the last few payments if we buy (and finance through them).

Another retail example is our local cable company.  Last Sunday evening, our cable suddenly collapsed, including broadband.  After a while, we called Customer Service who told us to call at 7AM the following day and ask for a 2nd level supervisor.  The next morning, we called at 7AM and were told to call back at 9AM when we asked for a Level 2 Supervisor.  In sum, we totaled 3 Supervisors, 4 stories and 2 commitments for call-backs, none of which occurred.  Finally, we spoke to the HQ Customer Care Advocate who told us she didn’t have access to any of our account information or even the open trouble ticket.  Now what kind of empowerment does this person have, other than providing ‘customer service theater’?  When the tech came, he said he didn’t have access to any customer configuration information even though he and his peers enter it in the comments section each and every time, forcing them to figure it out on every service call, in full view of the customer. Bottom line – in the past we had no viable options to cable, but now with competitors they should be using every piece of information they have to improve each customer contact, be it on the phone or in-house.

The B2B market is no different.  A past client of ours, a service provider playing in a crowded market, grew out of touch with their main clients, which as a group, provided over 50% of total revenues. The President let the VP of Sales manage key relationships and the VP in turn let the sales reps “do their jobs”.  Without a strong relationship at the executive levels, it came as a HQ level surprise when a key customer went into a feeding frenzy over quality issues, prompting a panicky visit resulting in dropping prices and promised service levels affecting profitability and that only worked for a while.  Once the spell was broken, that large customer took their business elsewhere after extracting every ounce they could from our former client.   Worse yet, word got out they were vulnerable and their largest clients were all contacted, forcing price concessions across the entire best-customer category.  Our engagement was resizing them to a lower revenue level and it was not a pretty assignment.

As operating executives, what can we do to ensure we don’t take our customers for granted?  First, we have to define all the steps and players, internal and supplier, in our Cash to Cash cycles looking for ‘sophistication creep’, which our customers call ‘complexity’. Try describing each customer touch point, and related process and trigger in Twitter’s 140 character limit. In Systems Integration, one of our most valuable tools is the conference room pilot, where we tear apart every solution before we build it, looking for every possible flaw.  Before transaction volumes grow 2-3X current volumes as the recovery takes hold, run your processes through a similar process, exposing anything imposing internal weaknesses on customers.  Simplicity has to be designed and continually enforced; complexity results from complacency.

Next, we have to ensure our customer facing personnel are trained and empowered (with discretion and information) to provide more than lip service. In addition, our incentives have to align to produce correct customer support behavior. In the case of the BMW dealership, knowing there are many dealers in my neighborhood, as well as competing brands, and given the turnover of car sales people, the owners should be mining their customer base for leads, adjusting commissions accordingly to incent outcalls. In the case of the cable company the HQ Customer Care Advocate should, knowing from their information systems you’ve been through 3 levels already, keep you on the phone until they transfer you to someone who can schedule a service call on a VIP basis. How much do you want to bet their KPIs are based on number of calls answered, not customer satisfaction or resolved issues?  As Andy Grove once said so sagely, “you get what you measure”. There’s a disjoin here – we want to do everything to grow our businesses using the rule book as a guide and our employees want to do everything to stay employed, using that very same rule book as a shield. Before you put in a new expensive IT system, it’s advisable to use the customer information you already have and modify existing systems for display and updating.

Finally, all of us have to get out of our offices and visit the tip of the spear – the customer and those people directly touching them on a daily basis.  Know what it’s like to be on both the delivery and receiving side of our business transactions.  Don’t be like those CEOs on the TV show Undercover Boss who suddenly go to work with their employees and see the light.  I particularly liked the CEO of one company who said he went to work only because he loved it while his financials clearly state he sold $44M in shares last year, something I’m sure every one of his employees missed hearing over coffee the next morning.  These CEO’s should know what it’s like long before being on camera.  I recall reading a story in the newspaper which makes this point perfectly.  A newly promoted Army 1-star received a congratulatory letter from a 2-star friend, containing the phrase ‘from now on you’ll always eat well and never be told the truth again’.

Can your company post this to Twitter – ‘in the past 10 years I can count on 1 hand the number of bad customer surprises I’ve received and the root causes never happened again’?

Rich Eichen is a Managing Principal of Return on Efficiency, LLC, who’s website is http://www.growroe.com and is one of their senior turnaround leaders/CROs, Program and Interim Executives with over 25 years experience reshaping companies, Operations and key initiatives. He can be reached at richard.eichen@growroe.com

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