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For the longest time I have been uncomfortable with the various labels we place on our customer facing activities. They are referred to as:
Customer Service
Customer Care
Customer Support
Customer Relationship Management
Client Services
Client Relations.
Most of these titles and designations focus on what we DO without focusing on the results we are hoping to achieve.
We engage in these activities, presumably to promote:
Customer Satisfaction
Client Retention
Customer Loyalty.
And we trust that these aims and practices will contribute to PROFITS.
But as a long time management consultant and President of Customersatisfaction.com, I’m not at all convinced we’re headed in the right direction, that these words and phrases are helping us or our clients and customers as much as an alternative model, which I’m going to introduce, here.
I believe all would be better served by focusing our efforts on IMPROVING CUSTOMER VALUE.
Peter F. Drucker, renowned management guru, used to point out to those of us who studied with him, that customer service “Must be defined from the customer’s point of view.”
The true test of valuable service is whether, if unbundled, customers will pay extra money for what is being dispensed to them.
A fellow student, in senior management with a financial services company, boasted that his firm was superior to competitors because it had a network of “local branches close to customers.”
When grilled by Drucker as to whether he had PROOF that these expensive deployments had any significant value in the minds of customers, my colleague balked and stammered.
It was merely an ARTICLE OF FAITH on his part; and in fairness to him, also in the minds of many at his company, that all of their efforts to serve were actually serving.
Upon closer scrutiny, the local service centers were found to have slight, if any, marginal utility to the customers in whose name they were built.
So, what IS value to customers? And how is it linked to achieving value to companies?
It is a moving target, for one thing. Yesterday’s first class air traveler insisted on a larger seat with more leg room. Today’s requires sleeper seats, independent audio and video programming, expedited baggage services, and an amenities kit on international flights.
One of the key components of providing value to customers is by offering an attractive PRICE. Take the shopper at a 99 Cents Only store. He or she can expect to find a tube of toothpaste for 99 cents, where the same item costs three times as much at a typical drug store or supermarket.
That’s value, without question. The amount and quality tendered should offer substantial utility to the customer.
But stark utility and functionality are only part of the equation.
The Mercedes dealer that has a Hall of Fame, a Polaroid portrait gallery of every buyer dating back decades displayed on the wall, insists on awarding men and women a dozen long-stem roses with each car purchase. It’s a moment in which every customer feels special and important, and a snapshot commemorates it, and is placed on the wall joining similar images of Hollywood celebrities such as Clark Gable, that have bought cars over more than a half-century at this famous dealership.
That’s value, too. Compared to the cost of an upscale car, the roses and the photo are very inexpensive. But they are part of a much greater ritual that the dealership has orchestrated to create an ELITE club, consisting of mostly ordinary purchasers.
This example shows the possibilities for IMPROVING CUSTOMER VALUE are practically endless.
Frequency marketing plans, based on airline miles, cash-back rebates, and even free dinners and haircuts, have had a dramatic impact on generating repeat business and a perception of value for buyers. At the same time, they have introduced loyalty and more predictable revenue streams into otherwise fickle industries.
These promotions show the Win-Win potential of focusing on creating VALUE.
From the business’s standpoint, when a customer can be induced to spend more, to buy the higher profit items, to resist the siren songs of competitors, and to be a source of referrals, then a CUSTOMER’S VALUE has been increased, and for that matter, so has the value of the overall enterprise.
The trick is to create better FITS and ALIGNMENTS between what a company offers by way of customer-facing practices and to increase the willingness of customers to select and prefer their vendors.
Does the company that answers the phone more pleasantly and faster than its competitor, win more business and better retain its customer base? We presume it does, and millions of dollars are invested annually by firms to train their personnel in telephone etiquette and call handling techniques.
As the author of MONITORING, MEASURING & MANAGING CUSTOMER SERVICE, let me ask you to consider these questions:
Where are the MEASURES that show such a correlation between good calls and good business? Where are the MONITORING techniques that capture and compare the RESULTS achieved by well trained versus poorly trained reps? How many customers have been DETECTED grumbling instead of singing as conversations conclude, or have explicitly responded to post-mortems and surveys by stating, “I went to your competitor because your call handling is inferior”?
Instead of focusing mostly on what we do, we need to ask “What are customers achieving?” and equally important, “What are we getting, in return?”
I have often said the truest test of customer satisfaction is this question:
“Will your customers reorder, or permit you to up-sell or to suggestively sell them more, RIGHT NOW?”
If not, you have not increased a customer’s VALUE to your firm, and you have demonstrated that you have not dispensed enough value to the customer, up to that point.
There is a VALUE DEFICIT that should be detected and remedied, immediately, but all too often it evades review and repair.
How do we create better FITS and ALIGNMENTS?
We need to (1) Seek and obtain FEEDBACK from clients on an ongoing basis that we’re delivering what they value. We should employ explicit and implicit measures of value tendered and received. (2) We should benchmark our processes against known BEST PRACTICES in the field and across industries.
But we can’t be satisfied with these initiatives, important as they are.
We also need to (3) CREATE NEW SATISFACTIONS and NEW VALUE for customers and for our companies.
This means taking risks.
For example, today’s hybrid vehicles cost more off the showroom floor, but they deliver more over time, including long-range economy and an increasingly important perception that the buyer is doing his share to reduce dependency on foreign energy sources, making his country more safe and secure in the process.
But when hybrids were designed, gas cost about $1.80 per gallon, and manufacturers had to get in front of their customers and entice them into the future.
Toyota made the bet that the market, and global events would catch up with their vision, and they bet right, winning a leading worldwide market share in the process.
You don’t have to be big to emulate them.
For the price of a few roses or a snapshot, you might accomplish the same thing, providing customers find VALUE in it.
Best-selling author of 12 books and more than 1,000 articles, Dr. Gary S. Goodman is considered "The Gold Standard" in negotiation, sales development, customer service, and telephone effectiveness. Top-rated as a speaker, seminar leader, and consultant, his clients extend across the globe and the organizational spectrum, from the Fortune 1000 to small businesses.
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