Customers and their expectations

Helping clients deliver competitive advantage is one of lloydmasters enduring offers. We know customers are getting smarter – that's the underlying message found in numerous pieces of recent research – and what customers really want are suppliers who fully understand their market and have information that they can share about it. We also know they are becoming more demanding – the rise of procurement as a profession is driving sales people to have to behave in a different way and forcing them to build different and more complex relationships; as a result, selling is becoming much more of a science and less of an art, and organisations are having to constantly rethink customer strategies – both in terms of winning and retention. They are also having to better understand the capabilities they need. And of course this needs to be delivered against a backdrop of increasing cost-cutting in their own organisations.

A useful model, which can help an organisation focus on areas of improvement in terms of managing customers, is provided by Kano. Kano’s model was developed in the 1980s as a result of linking motivation and quality theories. Essentially the model leads us to consider three types of customer experience:

1. Basic – which relates to the quality of service expected, i.e., the must-haves. If the quality is not delivered, then dissatisfaction sets in
2. Performance – which relates to satisfaction received in proportion to the performance of the product
3. Excitement – which is what the customer receives when they discover an unexpected feature or benefit

The model can act as a simplistic diagnostic tool to assess which areas need improving and in which priority. To achieve sustainability of approach, however, it may be necessary to go further and define the capabilities that the organisation needs to have – both in terms of skills and competencies, as well as structure and processes. To deliver the customer service strategy, this capabilities blueprint can then be used as a measuring tool against existing reality, with the defined gap acting as the basis for a plan of action. Using capabilities in this way then ensures a long-term focus for customer service and for sales.

In 2000, a Gallup Survey of over 500 CEOs asked what delivered their most competitive advantage. While 46% stated product and service quality, 44% stated customer service. Such results suggest that regular reviews of how you can improve in this area are probably a necessity, not a luxury.

An inspiring place

Last week I was lucky enough to be at Goodwood, running a workshop for managers and focusing on innovation. We had a head start thinking creatively as we were located at the Sculpture Estate, which is home to the CASS Sculpture Foundation.

Set up 16 years ago, this philanthropic foundation aims to ensure that British sculpture builds on its successful reputation and legacy by commissioning new large-scale works which are displayed in the park and sold throughout the world to fund future commissions.

We worked indoors, in a beautiful airy gallery, situated in the heart of the park, and could glimpse pieces of sculpture through the trees. It was an inspiring place and hopefully the workshop participants found the day and the venue as inspiring as I did.
 

Goodwood is an example of innovation at its best; it's for more than just the world famous Festival of Speed and Glorious Goodwood and has a well deserved reputation as a luxury brand.

All organisations need to look at themselves and try to engage with customers and clients in a different way; what used to work, may not work now and those clients and customers with a budget, need to think extra carefully about how and where to spend it. Looking at services and products with an innovative hat on can only help, it's an obvious place to start but, also looking at how people work internally could lead to real improvement – a touch of innovation here could help create a true bit of magic with the customer.

Compare the customer service

I’ve recently had two very different experiences of customer service; in one case they really went the extra mile and in the other they didn’t – actually they went quite literally zero miles in seven hours.

Don’t get me wrong I don’t blame Continental Airlines for the snow storm that closed Newark airport the other week, when 16 inches of snow falls in four hours you've got to expect delays but they are responsible for the poor, almost non-existent customer service provided to me and my fellow passengers during that time.

Turned-off flight CO112 as de-icing and re-fuelling had taken more than three hours and it was now snowing too heavily for us to depart, we were offered no advice or assistance from flight crew other than that as the airport was now closed, customers would have to re-book and queues would be very long. So, off we went back through security to find just three Continental staff handing out contact numbers (they were either unable or unwilling to communicate anything more) which, when you were finally able to get through, were recorded messages advising that 'due to adverse weather conditions and heavy demand we cannot take your call'. When through the magic of iPhone, I was finally able to load the Continental website to try to re-book, the system crashed at the final hurdle. Still no actual Continental personnel to talk to. The next day I boarded another CO flight bound for London but this time due to a catalogue of mis-communication and the resulting delay, the flight was unable to depart as the Heathrow curfew had been missed. Finally, three planes and over 40 hours later I arrive back at Heathrow – my luggage did not as they forgot to load the bags! and once again no Continental Airlines leadership communication nor support. I’m still waiting for a response from Continental to my feedback; still trying to find someone to talk to.

Now contrast this with Amazon. As I have mentioned in an earlier blog I was sceptical about the joys of the Kindle but since receiving one as a gift I’m a convert so it was really disappointing when the screen broke. Even though it was under warranty I expected a repair or replacement to take time so was more than happy when having spoken to a member of the Amazon customer service team I was told that a new Kindle would be sent immediately and that returning the broken device was a easy as boxing it up, applying the return label they would email me and using the web link to contact DHL who collected it from an address of my choice at a time convenient to me. Two days later my new Kindle arrive – that’s what I call customer service.

Corporate Social Responsibility – a perspective

As the weather is still so cold, I was thinking about lloydmasters projects in sunnier locations such Brazil where we helped the United Nations run a series of stakeholder dialogues focused on sustainable development and Corporate Social Responsibility (CSR).

In the UN, as in other client companies we often see much hand wringing and confusion on the vexing question of sustainability and CSR and and what to do about it.The subject can appear daunting as there is much ‘expert opinion’ and a cottage industry of ‘triple-bottom-line’ reporting endless conferences and seminars searching for the definitive ‘business case’ for CSR can also prevent clarity.

So, lets get back to basics.

When we talk about CSR, all we are really talking about is leadership and due diligence. By leadership, we mean adopting a more thoughtful, businesslike and having an understanding ambitious approach to ethical, social and environmental issues – and of the commercial opportunities arising from tackling them. Due diligence means managing the risks arising from evolving expectations in society, the values of the demand-side of the economy, requirements of law, industry standards as well as professional and codes of practice.

So, what is the 'business case'? Putting aside for one moment moral philosophy, we know that issues that are of significant interest to customers, employees, suppliers and to general society will also be of concern to shareholders. We also know that public and consumer trust are essential for a sustainable business; but more often we operate in a low trust environment and in an increasingly transparent and connected world.

In short we are constantly under scrutiny. The business case is therefore quite simple; companies showing leadership and exercising due diligence will do well and be rewarded. Those that don't, will tend to suffer in terms of brand devaluation and will eventually have to change or could go out of business.

So, what should you do?

• Don't let the tail wag the dog! Don't let ‘reporting’ be the driver. Understand what societal issues are out there, what values are driving them, explore, and understand what they mean for the ongoing success of your business
• Show leadership by acknowledging issues relevant to your business and discuss these with relevant stakeholder groups to gain insights, identify boundaries and discover win-win business opportunities. Understand what due diligence means for these issues and put in place appropriate risk management processes
• Translate these opportunities into the ‘day-to-day’ job. Set targets and measure performance taking care that things are done in a joined-up fashion and that performance is cast in win-win terms. For the business this means impact on brand equity, license to operate, customer and supplier relationships, staff motivation, carbon risk, market share, etc. For society, this means impact on the environmental, social, ethical and economic issues that you have acknowledged as something relevant to your business
• Decide what you need to communicate, and to who, and put in place appropriate communications, feedback mechanisms, partnerships and performance reporting procedures