The Benefits of Treating Your Customers … Well, Like Customers!

Until only recently, the Services Lifecycle Management (SLM) solutions purchase/acquisition cycle was a fairly closed-loop, highly structured, and oftentimes formal process. Potential users obtained most of their decision-making data and informational input directly from the vendors, sought the recommendations of published buyer’s guides and directories, and picked up on the latest “buzz” at industry trade shows or via services trade publications – all historically serving as powerful and rich resources.

This was the way SLM solution decisions had been supported and made for decades. But then, the Internet, blogs and social media changed everything – including the means by which information is gathered, reviewed, and analyzed; how potential vendors are evaluated and selected; and even the way in which customers position themselves as potential buyers in a largely buyer’s market.

In October 2010, The White House Office of Consumer Affairs reported that dissatisfied customers will tell between nine and 15 people about their negative experience, with roughly 13 percent (i.e., or about one-in-eight) telling more than 20 people. Satisfied customers, on the other hand, will only tell about four to six people about their positive experience.

Therefore, according to the report, customer service failures are likely to be communicated two-and-a-half times more often than customer service successes. As a result, services organizations need to maintain a ratio of roughly 2.5-to-1 satisfied vs. dissatisfied customers just to break even in terms of word-of-mouth customer service feedback.

In all likelihood, customers will become even more critical – and communicative – about their service experiences in the future, based on the widespread usage of social media tools and technology devices. This presents a new front for services organizations to address in an increasingly social media-influenced marketplace; however, there are still many other challenges that must also be addressed.

The three most uniquely daunting challenges faced by services organizations over the past few decades have included the following:

  • Transforming themselves from manufacturer/OEM cost centers to strategic lines of business (i.e., with their own executive-level management and P&L responsibility)
  • Shifting their operational focus from company-centric to customer-centric, whereby the customer represents the focal point of their universe
  • Learning how to treat their business-to-business (B2B) accounts with the same high level of service and support that other vendors use to treat their business-to-consumer (B2C) customers

Surely there have been other equally daunting challenges facing the services industry throughout this period, as well, including:

  • The globalization of business operations
  • An uncertain cycle of volatile economic upturns and downturns
  • The proliferation of new technologies and applications
  • The continuing shakeout of marginal performers, and the resultant consolidation within the supply side sectors
  • The widespread growth of social media for business purposes

However, while each of these business game-changers ultimately impacts all business segments, the three challenges outlined in the top list above focus uniquely on the services sector.

It is no longer good enough to tell your customers that your organization is “no worse” than any of its competitors (the “like-company” comparison);  because, if you do, you will risk hearing something in return such as, “I understand that. But what I don’t understand is why you can’t process my order as accurately as Amazon.com or QVC, or handle my return – and process my credit – as quickly as American Express!”

Companies like Amazon.com and QVC are maximizing their use of the Internet’s communications capabilities by making not only the purchasing process easy – but the returns process as well. For example, you might purchase an item from one of these vendors via telephone, laptop, iPhone, tablet or other handheld device. Once you obtain a customer number, it’s all very easy to place an order.

The overall customer experience is then heightened even further by the high level of communications provided to the consumer (i.e., the receipt of a near-instant e-mail confirmation of the order; the subsequent follow-up e-mails when the item is shipped; notification of when an item is on backorder; etc.). Even the return process is easy: if the item isn’t what you thought it would be (e.g., wrong color or size, you already got one for your birthday – whatever!) you can simply return it in the same packaging used for the initial shipping along with the supplied return mailing label, and a return receipt and credit notification will be forwarded to you (typically) in a matter of days – if not hours!

By simply delivering (or promising) the same-old, same-old treatment to your existing customers, you are guaranteed to continue treating them as “just another business account” (i.e., the “B” in B2B). However, your customers are quickly becoming accustomed to being treated better as “C’s” by some of the most successful B2C vendors. They are also increasingly being empowered by the Internet; a seemingly unending number of new technologies, apps and devices; and the ongoing explosion of social media tools.

The time has come for your organization to recognize that these “new” levels of customer delivery performance are now the norm – and that its customers will increasingly settle for nothing less than the best.

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Using Key Performance Indicators (KPIs) to Drive Service Operations Improvement

The concept of Key Performance Indicators (KPIs) has been around for as long as many of us have been working in the services sector. However, each of our organizations may have a different understanding of their importance and use. Generally, the first hurdle for many service managers is gaining the proper understanding of exactly what KPIs are, and what they can do to help them run their service operations more efficiently.

In fact, 52 percent of the services organizations participating in Strategies For Growth’s (SFG’s) 2014 Field Service Benchmark Survey cite the need to develop/improve metrics, or KPIs, used to measure field service performance as the top rated strategic action currently being taken (up from 45 percent in 2011). Another 40 percent plan to develop/improve their KPI utilization over the next 12 months. This clearly demonstrates that, for a majority of services organizations, the utilization of a targeted KPI measurement and tracking process is a prerequisite for their ability to manage – and improve – overall service performance.

But, how should your organization choose the most appropriate KPIs to measure?

Basically, KPIs are tools that may be used by an organization to define, measure, monitor, and track its performance over time toward the attainment of its stated organizational goals. KPIs are quantifiable metrics, or measurements, that relate to specific success attributes that reflect the organization’s performance. As such, the selection of the specific KPIs to be used may differ widely from one organization to another – or even between and among departments within the same organization. However, in order for a KPI to have maximum value, it must be clearly defined, quantifiable, and relatively easy to measure. Metrics that are vague in definition; qualitative or subjective in nature; and next to impossible to collect, interpret and analyze will not serve as a good basis for a KPI.

KPIs should also be directly linked to the critical factors that drive the performance of the organization. If the metric is not directly linked to a critical organization success factor, it will probably not be worth the resources and dollar expenditures to collect and process. In the world of KPIs, there is a big difference between “need to know” and “nice to know”. In the former, the resources required to collect, analyze, interpret, and distribute the KPI information will almost certainly be worth the effort. This “need to know” data and information is what management will ultimately use to make its decisions for moving forward. However, “nice to know” data and information is really not worth the expense, and will typically use up many of the scarce resources that might otherwise have been used to generate the more important “need to know” data and information.

Regardless of how your organization defines KPIs, the following factors should always be taken into account: The KPIs must …

  • Reflect, and relate directly to, the organization’s goals.
  • Be quantitative and quantifiable.
  • Be linked directly to the measurement of the organization’s success.

The KPIs you use must also be quantitative and quantifiable. The standard rule of thumb is “if you can’t measure it, you can’t manage it.” What this means is that it may be extremely difficult to measure your success if your targets are not quantitative in nature. For example, if your goal is to improve customer satisfaction from “good” to “very good”, it may be difficult to objectively distinguish one level from the other. However, if your goal is to improve an existing customer satisfaction rating of 85% to 88%, you will know in absolute terms whether or not you have met your goal if at the end of the period you have improved to either 87% (i.e., a point below) or 89% (i.e., a point above). In the first case, you have not met your goal; but, in the second case, you have. Only by quantifying the KPI used to measure performance in this case, are you able to determine whether you have succeeded or not.

KPIs must also be linked directly to the specific measures of the organization’s success. Simply tracking data over time, and reporting it back to management, is not useful if the data itself is not meaningful to the measure of success. For example, using KPIs to track employee attendance may be of use to your Human Resources department, but may not be directly relevant to the measure of your service engineer performance in the field. While these KPIs may be important to HR, there are far more that you should be using instead to measure field service performance (e.g., field engineer productivity/utilization, customer satisfaction, etc.).

Many organizations are also in various stages of developing or implementing CRM or ERP systems within the organization. In these situations, it is typically far better to build in the required KPI data collection processes before the system is implemented in order to save time, money – and anxiety – before the systems are set in stone.

In any event, before embarking on an KPI development initiative, it will be important to set the stage properly by first:

  • Agreeing on the appropriate metrics to measure as KPIs (i.e., “need to know” vs. “nice to know”).
  • Setting up all the measuring, monitoring, and tracking systems in advance to support the initiative.
  • Integrating KPIs with companywide CRM or ERP systems wherever possible.
  • Establishing a formal process for the ongoing collection of key performance data and information on an automated basis.

Without a formal set of objective, realistic, quantifiable, and actionable KPIs, your organization may never be able to accurately assess its performance over time. However, by using the proper mix of KPIs, both the organization, and each of its key departments and divisions, will be able to measure their success – or lack thereof – on an ongoing basis, with the ability to identify problems, cultivate opportunities, and make improvements, as necessary, all along the way.

SugarCRM, ah, Honey, Honey, You are my Candy Girl and You Got Me Wanting You!

Never heard of SugarCRM before? Well, get ready to have both them – and the Golden Oldie, “Sugar, Sugar” by the Archies – invade your space, the latter as nothing more than an earworm, but the former as a viable new (to you) solutions provider in the growing (and increasingly competitive) Cloud-based Customer Relationship Management (CRM) market.

Positioning itself as an alternative to Salesforce.com’s CRM solution, SugarCRM has launched an aggressive marketing campaign that is largely based on a social media push to targeted markets (i.e., practicing what they preach with respect to the integration of social media into their CRM products).

They have also just taken (i.e., yesterday) a $40 million equity investment from Goldman Sachs, amounting to half of the total that SugarCRM has raised to date (i.e., about $79 million since the company was founded in April 2004).

The company plans to use its new funding to expand its “global reach”, by increasing its global sales and support staff. According to Goldman Sachs, SugarCRM is “very well positioned” as a leading CRM player thanks to the rise of social media and mobile technologies.

SugarCRM presently has more than 6,500 customers, having added 600 to the fold in Q2 2013. The company has also experienced 15 consecutive quarters of growth, and some analysts believe that it is currently in the process of setting itself up for a 2013/2014 IPO.

Company CEO, Larry Augustin, has already communicated with me (and, probably, you)  via Twitter and LinkedIn. In fact, he just tweeted me in response to my following him on Twitter (probably not a personal response – but a response nonetheless).

SugarCRM has successfully used the social media it employs in its CRM solutions to reach out to me, and make me more familiar with its brand. Watch your Twitter and LinkedIn feeds for similar messages. However, getting the word out is the first step; but, delivering the CRM solution that works for your organization is what really matters.

SugarCRM has been in the global CRM space since 2004, but is new to my space (and, probably, yours). However, they are sure to be more familiar to more and more services managers in the coming months, largely through their social media push.

And, with apologies to the Archies, all I can say at this point is, “Pour a little SugarCRM on me, Baby.”

Certainly a company worth watching.

An Improving Services Market Is Investing in New Mobile Tools and Technologies

Now that the economy is (apparently) improving, many services and supply chain organizations find themselves in situations where they are trying to support a growing customer/market base with antiquated (legacy is more politically correct) service management systems that are no longer up to the job.

As a result, many are investing in new technologies and mobile apps to support their service and supply chain operations. This has, in turn, caused the Service Lifecycle Management (SLM) solution providers to expand their offerings to now include Reverse Logistics and other new-to-them functionalities.

Pricing models for new technologies are also in a mode of change – largely stimulated by the proliferation of Cloud-based solutions. For example, a $1 million SLM solution, paid for on a perpetual license basis, requires a large lump sum capital expenditure upfront – plus an annual maintenance contract for the duration.

However, the Cloud has allowed organizations of all sizes to implement their SLM solutions on a either a perpetual license basis or – as an alternative – a subscription model basis that requires only a fraction of the total cost to be paid on a monthly basis. Many services executives are finding that it is easier to acquire their SLM solution on a monthly payment plan (i.e., that they can charge on their company credit card) than having to go through all the red tape and paperwork to come to terms on a perpetual license contract.

Finally, more and more service and supply chain organizations now recognize that even the best systems and solutions, by themselves, won’t get the job done. A majority (for the first time in our surveys) are now citing the ability to implement and/or improve their KPI (i.e., Key Performance Indicator) measurement and tracking as the top strategic action they will be taking to bolster their service and supply chain operations performance.

The net net is that the market recognizes that now is the time to stake their claim to a larger share of the pie – however, they also recognize that they will need the proper solutions, tools, technologies and resources to actually make it happen. The opportunity for growth is here – but there’s no way to accurately forecast how long the window will remain open.

What’s in a Name: What Does Your Organization Call Its Top Customer Service Executive?

I’ve been reviewing some of my LinkedIn Business Group connections over the past several days, and I was struck by the number of new, and somewhat unique, titles for executives that used to simply be called “VP of Customer Service”.

To me, “VP, Customer Care” always seemed a bit more soothing than “VP, Customer Service”. There are hundreds of customer service executives out there with this softer title – and I find that to be somewhat comforting. “SVP, Global Customer Solutions” seems a bit more clinical, and somewhat less cozy, by comparison.

However, I did find a few titles that, I believe, may say it all. The thing is, I’m not sure which is the most compelling. They include:

– VP, Customers For Life (SalesForce.com)

– VP of Customer Obsession (Voxeo/Aspect)

– Director, Services & Customer Success Enablement (Avid Technology)

I’d love to hear your comments on which of these titles sounds most convincing – or even better, if you have (or have heard of) an even more creative title.

Of course, the bottom line is really whether you can deliver the quality of customer service and support that blows the customer away – not simply how you title your executives.

Wouldn’t it be nice if every services organization titled itself appropriately? However, in that perfect world, I wouldn’t expect the organization headed by the “VP, Customer Neglect” to be doing very well.

Let me know what you think!