MalcolmSays

Malcolm Says

I start from the premise that customers expectations are never unrealistic.  We may think they are but with the odd exceptions customer are reasonable and believe that their expectations are realistic.  The challenge for companies is to understand the specific expectations of their customers and ensure that where it makes business sense those needs are met. 

One of the myths is that meeting customer expectations or proving a better customer experience means spending lots of money.  In a lot of situations it costs very little or even nothing. It’s not untypical for me to make at least three or four recommendations to a client that have a high positive impact on customers at zero cost them.  (I have specific examples for anyone who is interested to know more).

The second major point that many companies miss is that improved customer experience leads to better customer retention. We’ve seen many different surveys that claim that 50% - 70% of customers leave due to how they have been treated by their supplier or their by staff.  I use this information to do a very simple ROI for clients to demonstrate the value of investing in improving customer experience.  In several cases the ROI based on improved customer retention was in excess of 50%.

There are a few articles on my web site that give a bit more background to my thinking and some example of what customers really care about rather than what we think they care about.   http://www.simpleplans.co.uk/7.HTML

It’s not about where they report but what they actually do that matters.

Marketing are the servants of Sales and the masters of business strategy.  Successfully pulling this off is often quite a challenge. I encourage clients to think that Sales own responsibility for selling and servicing all customers individually and Marketing are responsible for all customers collectively.

The issue is not the internal wrangling about metrics or organisational structures.  They are just red herrings and take our mind off the core issue. The real focus is Customers and how both Marketing and Sales work together to get and keep profitable customers.  

In a really Customer focused organisation all decisions are tested against the impact on customers before being implemented. Having this common touchstone significantly reduces internal “discussions” about organisation structures.

In some circumstances people just buy on price because the difference between the options is either invisible to them or they just don’t care. In other situations they may buy based on features and perceived benefits.

In most buying decisions, business or personal, neither of these are the first hurdle that has to be crossed. The first step is what I call the RET factor. It stands for Relationship, Expertise and Trust. Many buying decisions are made using a mix of these factors before price is even mentioned. For example I might buy my Life Insurance from Jerry because I’ve known him for years, he’s demonstrated his expertise on many occasions and I trust him. Another vendor is not going to get my business just by offering a lower price.

It’s therefore important to do as much as you can to improve your RET factor rather than just trying to sell features and benefits or just focusing on price. Consider if any sales/marketing activity or business process improves or damages your RET factor with customers.

Knowing what your customer cares about is obviously important. However customers care about far more than just features and benefits and the only way to find out what those things are is to ask them. I’d suggest using surveys and any customer touch point to collect information. What’s important to customer can be illogical, irrational and impossible to work out without asking them but it may be the crucial factor in a buying decision.

There is more information on this topic and some real customer examples on my web site.  www.simpleplans.co.uk

The issue for a number of businesses it that they have already cut the obvious areas of waste but because revenues are weak they need to cut further.  The problem is where and how to cut without damaging the business.

A simple way of evaluating the various options to reduce costs is required. My approach is to look across the business and ask one question. How does this action or task add value to customers? A high level first pass will identify things to cut, things not to cut, things to review and perhaps even some areas to invest more in.  The key point is that it provides a consistent way to make decisions and to explain those decisions to staff and customers. It’s also repeatable as circumstance change either positively or negatively. 

Ideally the results should also be assessed against the plans of the business before final decisions are taken. Unfortunately a surprisingly large number of businesses do not have good plans beyond revenue and profit objectives. Definitely another reason why knee jerk reactions take place.  

I’d suggest looking at the behaviors and features that builds trust in the first place. To me the top 5 are:

1. Honesty
2. Consistency
3. Professionalism
4. Excellent service
5. Great staff
Therefore any action that a company plans to take should be assessed against the impact that it would potentially have on any or all five of the above and features. If the action would result in a negative reaction simply don’t do it because that would damage trust. If you still decide to go ahead with a particular action HOW you plan to carry it out should then be assessed against the top 5 list.

The model for the most trustworthy retailer is always John Lewis and their supermarket chain Waitrose. Interestingly Waitrose are rarely the cheapest and in spite of the John Lewis promise to never be knowingly undersold some of their own products are quite expensive. But, since everyone trusts them on all 5 points price becomes much less relevant.

Malcolm Says
Listening to customers and acting on what they say ia easy. Here is the secret of sucess.Step 1 The CEO spends a lot of time going out talking to customers and tells his senior staff team what he has heard and asks them what they are doing about issuses that he’s discovered.Step 2. The senior management team not wanting to be caught out by the boss go out and listen to lots of customers and fix the problems before the CEO finds out about them.Step 3. This process is repeated through all levels of the organisation.

Tesco are the masters of this approach.

Malcolm says:

The problem is that almost all organisations have too many processes that are no longer appropriate for today’s business environment.  Even worse, in some organisations staff hide behind the processes and use them as an excuse for their actions or inactions.

I’m been working with the new Managing Director of a company who during his first 90 days is personally reviewing and rewrite the major SOP’s (Standard operating procedures) of the £50M company. He believes that it’s the best way for him to really understand the business and make very clear what he expects of his staff. It’s going to be fascinating to see the result. Needless to say he is coming from a very customer centric way of thinking.

Whatever situation you are in it’s always good to look at existing processes and ask two simple questions.

1) How does this add value to our customers?

2) Does the manner in which this process is carried out fit the objectives and strategies of the organisation?

Interesting discussions always follow.

Malcolm says:

Innovative management is the most important skill in a climate of uncertainty. Leadership is the way to get people to understand and use innovative management.The test question before taking any key actions is: “Will this add value to my customers or does it have a negative impact on them?” Resolving this type of question often demands new thinking which needs innovative management before it can happen.

Malcolm says

A lot of your competitors use the same types of actions to take care of top clients so you have to… see more something else as well. My research says that the most effective technique is to pass your customers leads and contacts that convert into revenue and profit for them. This trumps any other action in a difficult trading environment and often costs you nothing.

Malcolm says

In my experience often the most interesting and useful customer feedback does not come through Sales or Marketing. It comes from functions that deal directly with the customer such as Customer Services, Logistics and Finance. I ask these people what customers are saying and often get some amazing information that by its very nature Sales and Marketing would have no way of capturing. For example the customer whose main reason for using one supplier was the way that they invoiced. (It fitted in well with their own internal systems.) Then there was the customer who didn’t like the way that boxes were opened for testing by the supplier. They thought they were faulty. These customers had told people in their suppliers company about these things before but the people in Logistics and Finance didn’t know who to tell or that this type of information was important.

So my recommendation is to forget trying to further automate stuff that Sales and marketing collect and focus on asking staff at the main customer touch points what they are hearing.