Are we deluding ourselves by thinking we understand our customers' needs?
'ACE' ( Leading Edge Management Consultancy Limited) stands for an Audit of Customer Expectations. ACE identifies for you what your customers expect from your company and how they perceive you compared with your competitors. It is structured to focus on what is really important to your customers. It identifies the factors that are critical to a company's success and then explores them in an interactive way. It also measures how accurately staff understand the customers' expectations.
Identifying 'moments of truth' creates the platform on which you can build a customer focus programme within your organisation and put in performance measures against specific 'moments of truth'. Then you need to set new performance targets.
Another benefit is that you can benchmark your performance against your competitors which can be a very powerful way of identifying sources of improvement. It also identifies companies outside the industry that your customers think perform well. It is invaluable to analyse these companies' strengths in areas like their management structure, cost base, IT investment, market specialisms, and ways of doing things to get some really useful market knowledge on which to base future decisions.
Each audit package is company specific and can be carried out again at a later date to see what progress has been made with developing customer focus.
Case Studies - Benchmarking customer service
This company is a manufacturer of products which are used by the building trade, and sold either directly to the user or through specialist distributors and DIY stores. To complicate matters one of the products is sold under a different brand name to the users from that through distributors.
The market has been growing for the last two years and the company has experienced some customer service issues. This, along with an increased market share, has also led to some order fulfilment issues. It has now opened a new warehouse, developed better forecasting and introduced bar codes for its products.
So now they wanted to look at existing service levels and try to improve them.
What was innovative about the solution?
The company already uses a Customer Satisfaction Report. However, as often happens with customer service issues, this identifies where there is an issue but does not help the company identify what to do to meet their customers needs better, or to benchmark against its competitors.
Leading Edge favours a more-actionable set of values based on ‘moments of truth’. This is any encounter point with a customer, where things can either go very right or very wrong, depending on how it is handled. Many of the current measures are hard measures, but often customer measure the supplier on softer issues which are things like trust and communication.
The Strategic direction:
The company is being strategic and has agreed 14 measures for market gap analysis. Many of these are controllable and so they can plan what to do if any problems arise. These can be linked to the customer satisfaction moments of truth which will give the company actions to work against as soon as the survey is completed.
The objective of the research for the company was to:
- Understand its customers’ expectations and their perceptions of the service that they receive. Then the gaps which emerge can be addressed
- Identify areas of customer service in which it can differentiate itself
- Benchmark the company’s performance against its competitors
- Identify the performance gaps between competitors and the company to stop customers switching
- Establish ‘best practice’ exemplars to identify how service levels could be developed further
- Support in the development of the factors for the company’s DS Matrix.
Leading Edge has carried out a great many of these surveys. The first step is to identify the company’s own 'moments of truth'. Leading Edge consultants held some short discussion meetings with a few key members of staff who were on the front line and so were more aware of what the main issues for the company were. These issues were allocated to one of the 5 dimensions of customer service which forms the structure of the survey.
When the questionnaire was completed and agreed with the client, there was a final check to make sure it included the necessary data needed for monitoring the company’s strategic direction.
What was the biggest obstacle?
Leading Edge spoke with over 150 customers and non-customers who were split between buyers, users, depot and technical managers from the key sectors the company supplied to. These came from the company’s database of customers.The interviews were carried out by phone and the company sent a preparatory letter to warn customers that they may be called and to show it was legitimate and maximise the likelihood of success.
We felt the best way to deal with time constraints was to ask respondents which was the most importance of the five dimensions of customer service and then ask about the moments of truth in that section only.
The analysis focused on the gaps between customers’ expectations and perceptions of the company. It looked at the most important moments of truth with the biggest gaps. It also gave the company the information it needed for its market gap analysis.
Leading Edge presented the findings at the Director’s Strategy day, with key slides showing where the company needed to put in some additional work, and where competitors were doing better.
How successful was the result?
The results showed that actually the company was still seen as performing relatively well, although there were some areas where work was needed.
Interestingly, the performance from the retailers brand seemed to fall short of that of the trade one marketed through distributors, even though they were both dealt with from the same warehouse in exactly the same way. This led to some discussion that perhaps the customers of this brand needed to be treated differently.
Some of the issues that arose were because the company had been working on the assumption that each dimension of customer service was equally important and treated each one as such. Consequently, the company seems to perform less well in the most important aspects of customer service and over-perform in less important ones. This is what happened in this case.
Orders through the internet also emerged as something that needs to be addressed sooner than the company thought it would.
The management of the company took the results very seriously, setting up a task force to improve their poorer scores. They chose the moments of truth with the biggest gaps, that they thought they could improve on. They then allocated the issues to the department best placed to come up with a solution. Each issue has someone responsible for making sure it happens and a time frame.
For example, the packaging is being looked at, the naming convention for products is being reviewed and an empowerment programme is being developed to support staff. Some new products are already being developed to support the range.
What our clients have said when using us for Benchmarking Customer Service:
- "Immediate understanding of our objectives and industry problems with unrivalled professionalism"
- "Responsive; quickly grasps the problem; sees the strategic implications of the research and has an opinion"
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