Tag Archives: Investments

With all this Global Warming, Why is my Company Frozen?

Posted on 24 October 2009 by | Leave a comment

Boardrooms and conference rooms across the globe have pretty much frozen up in the wake of economic uncertainty and what feels like the “new world” or decreased consumer spending, low interest rates, and growing unemployment rates.

Individuals and companies alike are playing by rules they haven’t seen in years.  The “new” economy of the late 1990’s wasn’t so new after all.  And the “old” business maxims have not withered and died.  Companies must stop the hemorrhaging, sure, but those who will find a way to thrive despite the economy will be those that make prudent investments now.  Invest in the business by developing and expanding markets.  Increase your marketing.  As competitors trim budgets, advertising dollars go that much further and fill an even larger void.

Invest in your customers for a variety of reasons:

  1. It is easier (i.e. cheaper) to sell to your existing customers than acquire new ones.
  2. Your customers are already invested in your success.
  3. Your products should be providing value to your customers.  Are they?  If the products don’t provide value, what can you do to make that change?
  4. Valued customers tell prospects of your greatness and thus remain one of your most trusted marketing/reference assets.

We had a saying in the Navy that seems particularly appropriate now.  “Sins of omission are greater than sins of commission.”  Or to quote Alfred Lord Tennyson, “Tis better to have loved and lost than never to have loved at all.”  Same ideas really.  Take risks, make decisions.  David Silverman echoes these thoughts in a recent post on moving through fear.  You can remain frozen by inaction, or you can seize the day.

The pivot point is that these are Darwinian times when the best and boldest survive and the outdated become extinct.  After all, you shouldn’t count on global warming keep your company from freezing in place… look what it did to the dinosaurs!

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Posted in Customer Service, When to Deliver Customer Service

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Are You in the Race?

Posted on 7 September 2009 by | 1 Comment

Benchmarking is a common sense way to compare one facet of company performance to another company’s performance.  However, as is too often the case, common sense isn’t always common practice.

3 Benchmarking Success Factors:

1.  Know Your Customer – Before companies decide to benchmark their performance they should invest time to ensure they know their customers.  Customers have different preferences.  So, unless you run a boutique consulting business, don’t attempt to please everyone.

2.  Measure Relevant Attributes – For customer service, the 3 essential attributes are speed, quality, and cost.

Speed – For my products and services is speed important?  If a neurosurgeon thinks they’ll get paid more and have more satisfied patients by performing faster brain-surgery… well, you get the idea.

Quality – Volvo has a reputation for building cars built to last forever.  Benchmarking themselves against inferior quality autos would give them a false sense of achievement.

Cost – Again automakers present an interesting comparison point.  Think of Ford and Lincoln.  Big cost difference.  People purchasing a Lincoln are willing to spend more because they are buying the Lincoln brand which has historically signified quality.

3.  Make Appropriate Comparisons – This success factor is as important as knowing your customer.  It is effectively the same as defining your market.  To which company should you compare your company?  In a highly competitive market, compare yourself to your closest competitors.  So Pepsi should make a comparison to Coca-Cola.  But if you define the market differently, say as consumable beverages then perhaps a better comparison would be to Budweiser.

Benchmarking can be an expensive undertaking.  Some of the largest companies in the world invest millions to grow market share and make smart investments.  Even with a small budget, the exercise of thinking through the success factors can help set your company apart from the competition.  After all, any company can invest in ways to become faster, reduce costs, or improve quality.  Your goal is to improve in ways that matter to customers.

The pivot point is that benchmarking provides a way to know if you are winning the race, losing the race, or even in the race.

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Posted in Influential Factors - Helpful

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Why Americans are Too Short

Posted on 4 June 2009 by | 3 Comments

One of our cultural short-comings regarding customer care is that it is treated as a cost and not a benefit.  (I say cultural because in simpler and smaller markets it’s quite clear to business owners that they need long-term relationships with their customers.)  Short-term gains come from increasing revenues and decreasing costs.  So this approach means that to realize gains, a company should reduce customer care.  And this thinking, while short-sighted, is actually true… to a degree.  At the extreme, one could eliminate all customer care and this would boost profitability.  But unless you sell a perfect product that meets each of your consumers needs perfectly, your gains will be short-lived.  Why?  Because we want customers to remain customers for a long time.

Two Cases

1)  In one case, products are transactional in nature.  (i.e. Customers are likely to buy only one.)

2)  In another case, customers start by buying one product, but then increase their consumption (either of more of the same product or they cross product lines and buy something different).

In both cases, companies must provide service (even if it means a hit on short-term profitability) so that the customer experience is good enough to create the possibility of future sales.  In the first case this comes through word-of-mouth marketing (which incidentally, isn’t free) and in the second case comes through a level of satisfaction or trust in the first product.

The pivot point is that customer service is not optional.  Whether you sell once to many customers, or many times to one customer, service is required.  Companies that invest in service to differentiate themselves and create a strategic advantage reap the rewards long after their short-sighted competitors fade from view.

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Posted in The Right Kind of Customer Service, Why Bother with Customer Service

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