We need to think of ourselves as a customer.
Since the 1990s when the “the service profit chain” and the “balanced scorecard” were introduced and became common business tools, we have had 30 years to see businesses adapt to the changing needs and wants of their customers.
Sadly this has not been as common in the industrial distribution world, nor has it been a particularly successful attempt.
There have been books by the hundreds written about customer service, yet we seem to be going the wrong way. Recently I saw a study that said, “Customer service in America is so bad it sucks; it has gotten to the point that customers have stopped complaining.”
Yet we have definitive statistics—not just intuition—that proves that customer service pays. Harvard University conducted a massive study on business in the 1990s and found that if you increased your customer retention by 5% you would increase your profitability by 45%.
So what gives?
I believe it might be as simple as this. It’s not the leadership that has to execute and deliver customer service, but it’s the front-line employees.
You know them, right? They are the people who have been working harder than ever before. Due in part to the lousy job market, they are in some cases overworked because you haven’t hired additional staff.
And the workers in the market today are not feeling good. They are nervous, stressed, and some are even afraid for their jobs.
Scared people don’t perform well, and the world in which we live is a distressed one. We have strong political and philosophical differences on strategies. We have a huge intellectual argument going on between two competing approaches to economics (Keynes vs. Hayek). We have the turmoil in Europe that started with Iceland more than 10 years ago. And I could go on.
The world contributes to the stress of everyone. So how is it we expect the employees to provide outstanding customer service?
Management is a privilege and a huge responsibility. The responsibility is to make sure our employees are safe and secure in their work. We also must operate effectively and efficiently, provide sufficient capital to see to it we have all the tools, and continue to train our employees so they are equipped to provide the customer service that our customers expect.
MBNA, a credit card company that was purchased by Bank of America in the 1990s, had one common theme: “Think of yourself as a customer.” They had this on carpets in every hallway and had it over doors and entrances. It was everywhere.
Think about the credit card business. MBNA had thousands of customers and hundreds of competitors. And they made small amounts of money on transactions, although they had hundreds of thousands of transactions. So their question was similar to yours. How do you stick out and make a name for yourself?
In my opinion, it is strictly through customer service. MBNA became so successful at customer service that they retained more than 98% of their customers!
So how about you? What is your customer retention? Do you know?
Increasing customer retention is a whole lot more difficult than writing about it. You see, it comes down to your employees—the people I call “your heroes”—and how they treat your customers.
To make this work, it helps if we know what our customers need and what they like. Thankfully there are plenty of customer surveys that list these needs and likes.
This is the hard side of the work. These are the items of significance. The customer might not choose to work with you if one or more of these items are not present.
- They need reinforcement that they are getting a good deal.
- They need to feel they made the right choice.
- They don’t want to feel taken advantage of in the deal.
- They need you to show them respect.
- They need your help.
- They need to trust you.
- They need to know they are getting high quality.
- They need you to be able to perform.
- They need you to respond promptly.
- They need you to have a sense of urgency.
I can’t say I see anything there that surprises me. Do you? In fact, I think they’re just the same as we are when we buy something.
So we need to do something. Let’s sit down with the front-line personnel and review this list and discuss it with them. Talk about specific customer examples and get them to tell stories of when they were able to delight customers.
This is a terrific forum for all parties—your employees and you will better understand each other and the job at hand. This is something I believe we should do regularly, perhaps even weekly. It is like a toolbox safety meeting where you discuss issues of significance at the moment.
Then we come to the softer side of the relationship. These are the things the customer notices and allows you to stand out.
- They like things to be as easy as possible.
- They like a history of your reliability and your reputation.
- They like predictability.
- They like you to be flexible and responsive to their needs.
- They like your help in reducing their costs.
- They like to know you can supply everything they need—a one-stop shop.
- They like you to understand their situation and help them.
- They like you to go to bat for them.
- They like you to know your products and services.
- They don’t like mistakes.
As with the list of needs, I am sure you can understand each of these likes. Again, they are the same things you like as a consumer. And this should be a subject of discussion with your front-line personnel.
I believe everyone has to understand what it is we are trying to do before they can accept that they should do something. But I also believe once they understand and accept we should do something, they will then be committed to doing it.
It is only through your leadership that you can get people to do what they know intuitively they should do, and that is to serve our customers. I also believe that you don’t manage people, you cannot make things happen. You manage process—you lead people.
I know you care about your customers and I know your employees do too. I think it is time to resensitize everyone to the needs and likes of our customers. Don’t you?
The time is now.
by Ron Slee
Water Well Journal
About Water Well Journal
The Water Well Journal is the leading resource for those working in the groundwater industry. The flagship publication of the National Ground Water Association is delivered to more than 24,000 people every month and covers technical issues related to drilling and pump installation, rig maintenance, business management, well rehabilitation, water treatment, and more.
Since many of the companies in the groundwater industry are small family-run businesses it is critical that Water Well Journal provide much more than technical content. That is why Ron Slee’s monthly columns addressing management, supply, and inventory issues are valuable. It is that type of information that helps the publication achieve NGWA’s mission of advancing groundwater knowledge.