Customer Service as a Competitive Advantage

Customer Service as a Competitive Advantage

As someone who has been heavily involved facilitating strategic planning processes for Customers during the last 15+ years, I often find it somewhat amusing how people answer the questions I p= ose.

For example, if I ask people, "What is your unique differentiation in = the marketplace?" or "What does your organization really excel at?&qu= ot; They will almost always reply, "It has to be our Customer service.&quo= t; Almost no one will admit to being "lousy" in Customer service, any more than they will talk about living in an average town with average kids.=

Therefore, if Customer service and satisfaction is so critical to the succe= ss of the vision and the execution of the strategic plan, why is it not usually monitored with the same intensity as the financials? After all, financials = are a lagging indicator (telling what happened after the fact) while Customer satisfaction may be a leading indicator (it can be predicting what may happ= en in the future).

If your business ignores measuring customer satisfaction it runs the risk of losing established Customers to the competition.

Customer Service as Overarching Philosophy
In 1960, Professor Theodore Leavitt wrote the groundbreaking article, "Marketing Myopia," in = the Harvard Business Review. To paraphrase, he basically concluded that the purpose= of all business is to attract and maintain customers while generating adequate profitability today and improved profitability in the future. That balancing act still holds true today.

= So many people that we talk with have never calculated the lifetime value of a customer that is taking advantage of all the services the company has to of= fer. Knowing that number can provide a framework to make decisions for the long = haul and maintain the customer relationship rather than looking at it from a "transactional" basis.

To calculate the lifetime value, simply take the number of years that a customer usually stays with the company multiplied by the estimated net pro= fit per year. The total dollars can give you some idea of what is at risk in the future if you under serve your customer base.

Whatever that amount entails, ask yourself, how cavalierly would you treat a check written to your company for that amount? Would you do the equivalent = of going outside your building, digging a hole, burying it there and walking a= way from it forever? In essence that is what happens when customers are taken f= or granted. The cause can either be by default i.e. not paying attention, understaffing by design, allowing a lack of systemic follow-up and follow-through, or it can be attributed to a management team with so strong= a focus on short-term results that they become almost greedy.

Does your company have a Customer service strategy?

If you examine your strategic plan, it’s necessary to differentiate the company strategy and plan from the Customer service strategy. They are not identical. Organizations need to implement a "Customer Bill of Rights" that is different again from any regula= tory compliance issue.

Leaders in the company need to ask themselves if they are willing to pay the price for excellent Customer service vs. good Customer service. Excellence costs, but it also pays off. Being even a little better than the competitor pays huge dividends. Yet many organizations are not willing to pay that pri= ce. Instead they are content with processes, technology and staff who are "good enough."

As mentioned before, "what gets measured gets done." Customer expectation measurements are important, as are ways to monitor them. It is necessary for companys to take the time to discover why a Customer has sign= ed on with you and not the competition. It’s also necessary to determine what the Customer really wants to have happen as part of their Customer experience. It is then up to you to make sure you are delivering what your Customer wants. Failure to do so most likely will result in the loss of that Customer to your competitor.

Once you determine what it is your Customer really desires, make sure you m= atch those expectations in terms of pricing and service. Make sure you are not trying to sell a champagne service to someone with a beer budget and vice versa. It’s necessary to have processes in place to support excellent Customer service from beginning to end. That is, do you have the right amou= nt of staffing resources to meet their needs? Make it as easy as possible for = them to conduct business with you.

While having the proper talent is vital to ensuring excellence in Customer service, it is also known that 94% of failings are the result of process/sy= stem failures and not people failures.

Anytime there is an opportunity for a hand-off where something can go wrong, organizations can mistakenly rely on the Customer’s people who have t= oo little knowledge of the situation, to be able to handle the details. We believe th= at it is vital for CPA companys to take ownership of the entire Customer experience.

Of course, no matter what the situation is, things don’t always go smoothly. Problems arise, that’s why companys should make sure they h= ave a process in place for "service recovery." That is, if something = goes wrong suddenly, they should be able to recover with minimal damage.

Excellent customer service that fosters customer loyalty demands a price. A= re you willing to pay it?