Are Your Competitors Stealing Market Share From You?
Product Supplier or Service Supplier?
Please note: the examples in this introduction refer primarily to a business supplying products to customers rather than one supplying services. However the underlying principles and need for an excellent Customer Service Function apply to all businesses.
The Customer Service Function
While it is accepted that an efficient Customer Service function is critical to good customer relationships and in preventing negative opinions and a poor reputation, there are many more benefits to be secured by a business owner from operating a progressive and proactive Customer Service function.
As a business owner/senior manager you should have a goal to implement a Customer Service function which is recognised as superior to that of your competitors. To do so it is important you understand:
- The level of service your customers expect;
- The level your competitors provide;
- The level you provide at the moment.
From the above understanding you will be able to establish a robust Customer Service function which will deliver a competitive edge.
To implement such a service you must have access to timely and reliable information. This information can be split between:
- Qualitative – attitude and impact of your operations on your customer relationships;
- Quantitative – measurable evidence, reflecting the range of services you provide to your customers.
It’s important to note that the above information, separated as it is by a focus on the Direct Customer and on your Company’s Operations, will also act as spur to drive improvements in the operational efficiency of your business.
The key to achieving good-to-great performance is based on setting stretching but realistic levels of service, based on discussions with your customers.
The areas which need to be assessed each period from your customer’s perspective include:
- Order Fill% Completed orders vs. Total number ordered;
- Case Fill% Completed delivery of cases vs. Total number ordered;
- On Time% Deliveries on time vs. Total deliveries;
- Refusal% Cases refused vs. Total number delivered;
- Invoice Accuracy% Invoice errors vs. Total number of invoices issued.
Measuring the above will provide essential inputs for any CRM (Customer Relationship Management) system you wish to implement. In addition, it will underpin the setting of performance objectives in the Performance Appraisal process; this in turn will support the identification of training and personal development objectives.
Other measures, connected to the interface between your company and your customers, would focus on operations capable of improved efficiency or reduced cost levels.
Under this heading the following areas require measurement:
- Sales Forecast accuracy;
- Non-Quality Costs as a % of Sales turnover;
- Stock Cover, expressed as a number of weeks’ sales;
- Credit Notes analysis, split between avoidable & unavoidable.
The reason for implementing a Customer Service management process is straightforward: to retain existing customers and to attract more people to your business. However, it can produce additional benefits of significance, such as:
- The establishment of an effective communication channel with your customers;
- An opportunity to ask your customers where improvements could be made;
- The ability to identify customers lost and to understand why they left;
- The provision of a forum where your customers turn to you for advice.
In short, there are compelling positive reasons to expend your effort in implementing a robust and progressive Customer Service process – it’ll make a real difference, for sure!
If you would like assistance to improve your Customer Service Function please contact: