I have been helping one of my clients grapple with growth challenges. During the course of our conversations we got around to looking at the business from the standpoint of customers. As such, I asked for an analysis of the customer base by revenue and profit.The analysis shows that the top 10 customers accounted for the lion’s share of the company’s revenues and thus its health and viability.
On that basis I was expecting the management team to have in place a policy, plan, practices and people to take great care of these customers. I was expecting that there would be some kind of game plan: to keep in regular touch with these customers; to stay in tune with their changing needs; to come up with new products and services to meet these needs; and to ensure that any issues were identified quickly and addressed.
What did I find? I found that these customers were signed up some years ago, these customers are getting the service they contracted for, they have made no complaints, and so there has been no communication with these customers other than the monthly invoice.
“Ridiculous!” That was the statement that the MD made when I asked him to reflect on the importance of these customers to the business and the way that his business has been treating these customers.
It occurs to me that so many people – at all levels of the organisation and across all functions – are so immersed in the doing that there is so little reflection upon what is being done, and not done, and the implications. Which makes me wonder, how much of what occurs, and does not occur, in an organisation would show up as “Ridiculous!” if viewed through the eyes of the customer?
So why is it that the management team of this client are oblivious to the importance of their existing customers? The simple answer is that they are fully immersed in:
1) the sexy stuff of ‘developing new products’;
2) the sexy stuff of getting new channel partners so as to acquire new customers faster and grow market share; and
3) dealing with all that it takes to make the organisation work – the people issues, the process issues, the information issues, the financial issues, and the systems issues.
Behind the obvious, is the not so obvious. Is it possible that there is no focus on existing customers because the MD is from a sales background and enjoys the thrill-chase of new customer acquisition? Is it possible that there is no focus on existing customers because the other directors take their lead from the MD?
Is the same kind of thing true in your organisation? How much of what you do, and do not do, would show up as “Ridiculous!” when looked at from a customer view, or a longer term perspective?
Back to my client. The good new is that the MD has taken steps to engage with at least one of his top 10 customers. And there is significant opportunity to create value for this customer by selling them new products and solutions that are more in tune with their current and future needs. Sounds like a win-win to me and as such it shows up for me as being the best kind of business.
Ok, you have just got a new customers and you want to keep that customer happy: you want to keep her and thus build an annuity stream from her. Looking at the situation from a service centred (and I would argue normal human perspective) you have three strategies available to you:
- Do your best to make sure that there is agreement on expectations and that you don’t create problems for your customer;
- Make it easy for the customer to get hold of you by prominently displaying your customer services number;
- If and when the customer contacts you then deal with her problem or complaint there and then with empathy.
Where is the leverage in this? Surely the leverage is in the first of the three strategies: doing your best to ensure you and the customer have the same expectations and that you do not create problems for your customer.
So why is it that so many companies do such a poor job of this? Let me give you just three examples:
- I know of one brand name etailer that knows that their shopping process causing big problems for them and their customers and yet continues to do nothing. When you place an order the website forces you to enter your credit card details leading you to think everything is done, settled. Yet, this credit card data is only processed later when the ordered items are despatched. As a result some customer payments do not go through because the card is no longer valid or because the details supplied by the customer were incorrect. Of course this comes as an unpleasant shock to the customer who was left thinking that their credit card had been accepted – when she had placed the order.
- Mobile phone companies continue to sell mobile phones that they know have faults. They know because they keep a track of which phones are failing and sent back by their customers. They even know what the main defects are on these phones. Yet they continue to sell them to new customers knowing that it will lead to trouble down the road!
- When I joined BSkyB and took out a bundled (pay TV, broadband, fixed telephone line) package with BSkyB to simplify my life I found that it did nothing of the kind. Whilst BSkyB did a great job of setting up Sky TV I had a horrid time getting the broadband set up. And when I wanted to get the issue fixed or later cancel the order I found myself bouncing between different customers service teams and different customer services numbers. In the end I was not able to cancel my order because I found out that I had actually been signed up for three different orders – each with different start dates, different end dates and different conditions!
What if these companies practiced transparency? What might be the results?
Lets take a look at my BSkyB experience – particularly why it was that I was so mad with BSkyB and am not anymore. What has made the difference? Well as a result of research I now know what I did not know before. Specifically, I have found out that:
- BSkyB has made up of product divisions, TV belongs in one division, Broadband in another and so forth;
- The contact centres for Sky TV are outsourced to one company, the contact centres for broadband are outsourced to another company and so forth
From this information I can now make sense of my baffling experience. No wonder that I had to contact one set of people to get the TV services installed and another set of people to get the broadband set-up. No wonder the SkyTV contact centres did not have a clue about the order I had placed nor about my broadband issues. No wonder that the Broadband folks had no idea of my total order and were not able to deal with anything other than broadband stuff.
Being a human I can empathise with the human beings who were on the end of the phone – in some of the most infuriating interactions I recognise that I was talking to the wrong people because I had a faulty map of the territory!
But why did BSkyB not make this clear to me? Why did they give me the impression on their website that I could simplify my life by buying the bundle of products from them? Why did they give me the impression that they would take care of it all and I would have a single point of contact?
If they had told me then it is possible that I might not have signed up and become a customer. It is also possible that I would have signed up and very clear on what to expect and as such would not have experienced a horrid time dealing with BSkyB.
Yet I cannot help thinking that in a structure where customer acquisition is separated from customer retention, this kind of behaviour is simply what occurs. So the access to transformation in behaviour is to change the structure: to integrate getting customers and keeping customers under the same person, the budget, the same department.