From the August 2009 edition of the Verghis View newsletter. Feel free to sign up for your own free subscription at http://www.verghisgroup.com/

Today’s Most Common Service/Support Traps

One of the reasons I have been so busy is because of a number of service assessments I have been performing for various organizations around the world. Over the past few months, savvy executives have been getting a jump on their competition by seeking a blueprint on the best ways to prepare their leadership teams and organizations for the inevitable growth period that lies ahead.

Some companies have found their support infrastructure under increased stress. Others have found the support landscape has grown far more competitive, as customers rightfully demand more value for what they pay.

I’d like to share some of the most common themes I’ve seen emerge during my recent assessments. If you are interested in your own service assessment, please check out http://www.verghisgroup.com/consulting/support-assessment/ 

TRAP #1. TREATING ALL CUSTOMERS THE SAME
Trying to be all things to all customers is a disaster waiting to happen. It’s an unsustainable business model. The fact is, customers are not all the same. For a startup, revenue is paramount, so you do whatever it takes to get and keep a customer. But when an organization matures, you need to adopt a more pragmatic approach: getting and keeping your profitable customers.

But if you can’t be everything to everyone, what is the alternative? Is it giving some customers excellent service, while others receive something less? Absolutely not! You can give everyone excellent service. Here’s how to do it.

Give customers in each segment better service than they expect — and better than they can get from the competition.

How do you manage to deliver great service to all your customers? Begin by dividing your customers into segments, and understand exactly what each segment really wants. But how do you segment your customers? If you’re part of a larger company, it has no doubt already been done for you. Talk to your marketing or product management team about your company’s “target market.”

If you’re with a small company or have never done this kind of customer segmenting before, here’s one simple approach.

Just divide them into high, medium and low-revenue customers. This is a decent first pass if you have nothing else to work with.
 
Next, find out what each segment of your customer base likes, and what your competition does in this space. Note: These days, “competition” refers to more than just your head-to-head competitors. It also includes service experiences across all companies, like Amazon.
 
Finally, tweak your processes and align your resources to address the needs of each customer segment.
There you have it – a simple way to segment your customer base and deliver exceptional service to everyone.

TRAP #2. MISSING THE TREES FOR THE FOREST
When I hear people citing their Customer Satisfaction, Customer Engagement or Net Promoter Scores, my first question is usually, “What customer segment does that score refer to?”

My advice: Stop aggregating key performance indicators like customer satisfaction scores across your entire customer base. This is particularly true if you have a large customer base (like one of my clients, who has 60+ million customers). Aggregating customer satisfaction scores across multiple customer segments tends to obscure important details.

In the example above, I’d want to know the sat scores for each segment of the customer base. Ditto the survey return rates. If you have a Technical Account Manager relationship and some customers are paying you a lot of money for a percentage of a senior person’s time, the response rate for those customers should be far higher than for those who only pay you a few hundred dollars a year.

TRAP #3. IGNORING IMPORTANT DETAILS
Look at the companies who are reporting profits these days. Aside from one-time events that may have bumped up revenue, most increased profits by cutting costs. While you cannot cut your way to greatness, this should be part of your ongoing strategic business review.

The aviation industry is a good example of profiting from attention to detail. When fuel costs soared, airline profits evaporated like a vapor trail in the sky. A careful review of costs uncovered this fascinating tidbit: 20% of a large passenger jet’s fuel is consumed carrying the fuel itself! This discovery led to critical changes in procedures. Instead of topping off the fuel tanks and lavatory water after each flight, they added only the necessary amount.

Result: Savings of thousands of dollars per flight — often the difference between a profitable flight and an unprofitable one.

There you have it – three simple lessons that can help you get ready for the recovery ahead.

Posted in: customer service, Customer support and service assessment, IT support, Managing Support, Technical Support