Client Focus
All companies claim that they have a customer focus. All companies claim that their employees are their most valuable resources.
How is it that some companies excel while others flounder?
Some companies retain customers while others have rapid turnover. Some companies experience the high cost of employee churn while others enjoy a relatively stable workforce.
Why is this?
The answer lies in the depth of the relationship.
A company representative came to meet me one day claiming that the significant difference between his company and others was customer focus. He explained that his company really listened to what its customers wanted. He then went on to describe in quite some detail the various products they had available and how I could benefit from those products. He did not stop to ask what my needs were. He had no idea of what I wanted or where my company was going. It is too easy to see the interactions with customers through the eyes of the current products and services.
That reminds me of the old joke about the man who went along to the doctor's surgery. The surgery had read that in an Australia-wide patient survey, the top irritation of all patients was being kept waiting. This surgery prided itself on its efficiency and never keeping customers waiting. The moment the man walked into the reception and said that he wanted to see the doctor, the nurse ushered him into a consulting room, told him to take off all his clothes and that the doctor would be with him in a few minutes. The man tried to interrupt but to no avail. The nurse was adamant. So the man succumbed and did as he was told.
A few moments later, the doctor enters the room and sees the man standing naked in front of him. "What seems to be the trouble?" said the doctor reaching for his stethoscope. "Well", spluttered the man, "You are four months behind in your rent payments and I'm here to collect!"
The moral of the story? Don't put the service you offer ahead of the needs of your clients.
This is equally true with internal customers – in fact it is probably more so. Internal customers often request information only to be told "It's in the weekly report." or "Have you looked on the Intranet?" I am a strong believer in workers being independent, but frequently fellow workers need more help than to be told to look at my internal product, namely my weekly report. A constant criticism of finance and other internal service departments is that they make no effort to understand the needs of the other departments and to produce information in a form that allows these other departments to improve their effectiveness.
It is important to understand the customer's business (either the internal or the external customer). Once you gain this understanding you are in an excellent position to make suggestions or recommendations, to offer other products or services, to consider ways to modify existing products and services, to transform the way you present information to better meet the customer's needs.
What produces customer loyalty?
In a recent issue of The Age/Sydney Morning Herald, there was an article on loyalty in the car industry. Competing brands are offering tickets to major sporting events, and all sorts of other perks, to try to win new customers. In the same article, it said that loyalty to the Holden has now risen above 60%, a figure not previously seen since the early '90s and apparently there was quite a dip in the mid-nineties.
What keeps a person loyal to a particular make of vehicle? Obviously, you need to be very happy with the car and its performance, but a fact recognised a decade ago in the car industry was the importance of service. Surveys showed that service satisfaction rated highly when a customer was considering purchasing a new vehicle. As a result, all major manufacturers now take very special care in car servicing. Frequently it will include a wash and polish, a vacuum, an explanation of the items on the invoice, suggestions regarding future services and almost always, a follow-up phone call a few days later to check that you are happy with the service. Why do they do it? To build brand loyalty.
Loyalty is a different beast for different products and services. Loyalty around a breakfast cereal that is perhaps purchased weekly is different from that for a motor vehicle that might only be purchased every few years. Service provides different opportunities to products, and internal customers are different from external customers.
It stands to reason that loyalty is built up over time. It cannot be won overnight and it cannot be purchased easily. Gifts and perks can be offered but if this is all that is buying the loyalty, it is only good until a better offer comes along from a competitor. To have the opportunity to win loyalty from the customer, one obviously needs to provide the goods and services demanded of the customer for a period of time. And during this period, one needs to be gradually building business knowledge. As the knowledge builds, the opportunity for questions grows. "Why is it done that way?", "Are there alternative methods that can be used?"
Slowly a partnership develops. It is during this phase that loyalty develops. If the relationship is one which encompasses a good deal of complexity, this complexity helps to build loyalty. It becomes too difficult to leave you. In an ideal situation, you and your company knows more about a particular aspect of a client's business than they themselves know.
I once ran a business where we outsourced the printing of all of our written materials and documents. The relationship started with just one division outsourcing some of its printing needs. The account was initially worth around $60,000 per annum. Slowly it grew. In the end, all printing and all marketing collateral as well as all merchandising were handled by this company. The account had grown to over $3 million per annum. How was this achieved?
The supplier took a real interest in our business from the outset. The owners made every effort to understand our business. Gradually they began making suggestions about specific products that saved us money. As the relationship grew, they began to build up a store of knowledge of our business. They looked at trends that we had not seen. They made suggestions about processes that saved us more money. Finally, they had a far better understanding of some aspects of our business than we did. They began to make suggestions that influenced the strategic direction that we took.
So the relationship grew from product suggestions, to process suggestions, to strategic suggestions.
That is a relationship that one does not walk away from lightly.
What were the early important factors?
- Open and frank discussions at the quarterly meetings.
- Owners of the service business that were emotionally intelligent, that understood business and that were at pains to understand our business.
At the same time, the basics were right. We had reduced our real costs by outsourcing, our downstream service was better, we reduced waste and re-work and our quality had improved. If this was the extent of the relationship – and it easily could have been – the account would probably have never reached more than $100,000 p.a.
So often very large sales accounts grow out of quite small beginnings.
That reminds me of the story of the new salesman in the department store.
After his first day, his sales manager came to check on how he went.
"How many customers did you serve today?" the manager asked.
"One," replied the new guy.
"Only one?" said the boss. "How much was the sale?"
The salesman answered, "$88,334."
Flabbergasted, the manager asked him to explain.
"First I sold a man a fishhook," the salesman said. "Then I sold him a rod and a reel. Then I asked where he was planning to fish, and he said down by the coast. So I suggested he'd need a boat - he bought that 20-foot runabout we had on special. When he said his Volkswagen might not be able to pull it, I took him to the automotive department and sold him a big 4-wheel drive."
The amazed boss asked, "You sold all that to a guy who came in for a fishhook?"
"No," the new salesman replied. "He actually came in for a packet of aspirin for his wife's migraine. I told him, "Your weekend's shot. You should probably go fishing."
That salesman understood the needs of his customer, more so than the customer himself!