Magazine article Industrial Management

Integrating Customer Service Strategy with Existing Business

Magazine article Industrial Management

Integrating Customer Service Strategy with Existing Business

Article excerpt

Is improving customer service a strategy to increase profit margin or market share in your industry? If so, do your business procedures and computer systems support this strategy? Does the investment to upgrade the existing computer systems with customer service functions seem like a low priority or not worth the effort? Are you uncertain of how to go about it?

For example, suppose an engineering analysis shows you can improve the order entry design, support functions, and computer response time significantly. A mere 10 percent reduction in order taking time would save 80 to 160 hours a week for 40 entry personnel (at 50 to 100 percent utilization). A resulting two-year return of over $100,000 may be worth making this objective a high priority. Unless your existing order entry is a well designed, custom system, a 10 percent reduction is very possible.

At the other end of the customer service spectrum, how effective is returned materials processing? Is it viewed simply as the cost of doing business or do we use it as a quality assurance and marketing tool? Are some returns occurring because a competitor gets the product to the customer faster than we do? Why do some customers have significantly higher returns than others? Can additional questions, unique to each product at order entry time, minimize the chance of having customers ordering the wrong item? Should we enhance packing procedures to improve shipping and billing accuracy?

Between order entry and returns data processing, a wealth of information and opportunity is available for processing. Is the time to place an order over the phone excessive to the customer? Was our customer service representative pleasant and effective? Did we reply to customer correspondence promptly? Can we offer additional services that the customer may not be aware of? What would it take to have the customer use only our services? Finding patterns and statistical significance in their replies is a valuable customer service support function for prioritizing action.

Handling of complaints is extremely important. One study by the Technical Assistance Research Program Institute shows 90 percent of unhappy customers will not make another purchase from the offending firm. On the other hand, 95 percent of customers will return if their complaint is resolved quickly. Effective, speedy resolution of complaints keeps customers happy. Does your computer system support this goal? More importantly, does it prevent common or avoidable complaints?

Unfortunately, some companies are unlikely to enhance their customer service functions because they assume it is not required, or the benefits do not appear tangible. Historically, it was wiser to wait until external circumstances (e.g., government policies, economic conditions, product trends) appear imminent and then react. Is this assumption still valid?

If customer service functions are not required, why do some good customers simply fade away? Ninety percent of customers who are disappointed in our service never tell us. Several good examples exist where companies lost contact with their customers. The high quality Swiss watch industry found no reason to change until they lost their market to electronic equivalents. Likewise, the American automotive industry was financially smart until they lost major market share to foreign competition. It is 10 times more expensive to acquire a new customer than sell to an existing customer.

Let's assume we want to be proactive and are willing to enhance the customer service support features of our existing business computer system. Where do we start? First, select a group to provide unbiased, proven, broad-experienced leadership. The group, as a whole, should be capable of the following:

* Clear vision of the overall project and knowledge of how all the tasks relate. This allows them to focus their effort on critical path activities and manage the project more effectively. …

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