How to Deliver Customer Satisfaction and Service at the Lowest Cost
In this article we will look at the topic of customer service: getting it right in your business, understanding the implications for your distribution network, and how you can extract more value—and get more cost—out of your business. Do you have challenges in your business around customer service? What should the service be? Are you over-servicing, under-servicing? Three Critical Customer Service Steps When it comes to customer service, there are three things you need to think about: 1) Genuinely understand what your customers want. Most businesses fall into the trap of thinking they know what that is, rather than actually knowing. 2) Map out a well-defined customer service offer. Without that, customers have nothing to hold you accountable to and you’ve no way to design your service around your customers. 3) Optimise your distribution network to deliver on your customer service offer. Those three things must be in place to genuinely satisfy what a customer wants with the optimal amount of resources. Let’s look at each of these three steps in turn. Understanding What Customers Value Most businesses fall into the habit of thinking they know what customers want. We need to try to penetrate that. So, for example, if a sales rep asks them, customers will say, “I want a good level of service, I want a competitive price, and I want a strong relationship with the business.” This is pretty useless information, to be honest. You’ve really got to penetrate what the customer values. To do that we use a technique called conjoint analysis. What conjoint analysis does is give a forced value to what customers genuinely expect, because that allows you to prioritise what resources you apply to servicing those customers. Matt Stedman, a senior Logistics Bureau staff member who has spent years working with the various aspects of customer service and the cost to the business, gives the following example of conjoint analysis:. “A customer may say, ‘Hey, we want great levels of service.’ But what they are really saying is, “what we want is great reliability—we want consistency’.” We have found that customers value reliability and good relationships with management and sales staff over price and speed of service. Think about the different suppliers you deal with in your business or even your personal life. Do you go to suppliers where you’re treated well, the relationship is good, and the service is reliable? I...
Read More