Strategic Service Management

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

Earlier this week, The Economist reported on how staff-motivation schemes may be feeling the impact of the recession. You may be experiencing it yourself: as corners are cut, those elements that are not seen as directly linking to revenue, and which take up time that could be devoted to primary activities, are most endangered. Of course, the line between perception and reality is blurred: as The Economist reports, “Towers Perrin, a consulting firm, found that between 2002 and 2006 companies with excellent records in motivating staff generated an average annual return over the period that was 9.3 percentage points higher than that of the companies in the S&P 500 stockmarket index”. Their message is clear: dismiss the value of motivation at your peril.

This article in last October’s Harvard Business Review did a pretty good job of pinpointing four key areas to focus on for motivating employees. However, in times of trouble, our focus shifts towards corporate stability, rather than individual benefits. We can go back to basics, and Maslow’s Hierarchy of Needs: we pursue Self-Actualisation and Esteem only when Safety is taken care of. When this is no longer a given, our perspective changes – and, with it, our behaviour. The best healthcare and pension plans in the land are worth nothing without a job underpinning them.

If this blog entry could guarantee you safeguarding your job, it probably wouldn’t be publicly accessible – and I would retire on selling the formula. But this is anything but The Age of Guarantees. Furthermore, how you go about re-engaging your staff (and yourself?) within your organisation depends on specifics that a generic entry cannot address. You should be aware, however, of changing behavioural patterns around you.

But I will make one point I believe is relevant to us all. As you look to cut costs, close that deal, refocus… don’t lose sight of the importance of customer service.

Companies that excel in customer service foster an atmosphere that improves both internal and external relationships. Furthermore, remember:

·         Winning a new customer costs as much as five times as much as retaining an existing one – and that’s before you’ve built up any loyalty or knowledge;

·         Customers who become advocates are an amazing marketing tool; unhappy customers are a potential barrier to growth;

·         Dealing with happy customers motivates staff. Solving issues for appreciating customers gives a great buzz. But dealing with unhappy customers, not being able to help them… that leads to high turnover rates. And high agency fees…

·         If your products and service are at the premium end of the scale, this is the time to be engaging with customers – to ensure you are not threatened by low-cost alternatives

This is not just about niceties. Even in a recession, excellent customer service makes sound financial, commercial sense – throughout your value chain. It’s only normal for you to lose sight of this, at times. But, if you let your competitors make the mistake on a long-term basis and you keep your eyes on the prize, you will come out of these time a stronger player for it.

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

Greetings from Paris.

That always sounds extravagant, doesn’t it? Well, don’t get carried away. I have a checkered history with accommodation in this beautiful city, and tonight’s tipped the balance the wrong way.

I am here for a two-day User Conference with our European Pricing customers. And ‘here’, more specifically, is the Radisson SAS near CDG: convenient, practical, respected. The sort of place you associate with good service; an impression that I have had reinforced in the past few weeks, during which I’ve dealt from afar with the hotel’s Commercial Department to get the event set up. Nothing has been too much trouble for them.

Then came tonight. I cleared customs, and duly waited for my shuttle bus at Terminal 2B. It’s a Sunday night, so I appreciate the service will be relatively infrequent. Some thirty minutes later though, having seen the Hilton’s shuttle go past me for the fourth or fifth time, it’s hard not to wonder.

A couple of hotel guests waiting with me are on the phone to the hotel, who assures them it’s ten minutes away. Trouble is, they had done that 25′ earlier - equally abruptly. Now it’s bad enough when expectations are mismanaged by the local pizza delivery joint: but this is a hotel brand that prides itself on service, leveraging it to charge a premium price. Does it know what’s going on? If not, why not? If so, why the blatant misinformation?

In the end, I waited 50′ for the shuttle. How long the other two guests waited, I daren’t imagine because when it finally arrived, there was only one seat available. Since they were travelling together, they kindly offered it to me. They weren’t as docile towards the driver or the hotel reception, over the phone. The waiting had been bad; the deceit, unnecessarily aggravating. I wouldn’t want to be in the driver’s shoes as he heads back to pick them up from here, which he seemed to be doing - even after Reception had guaranteed them another shuttle was already en route and would be with them five minutes after ‘mine’…

Whatever you sell, your customers are not idiots. Most customers tend to have greater patience than you may think. They accept things go wrong - indeed, fix their problems well and their loyalty will be higher than had they never existed. That’s why Dell showcases its Enterprise Command Center to illustrate how it helps its customers: because doing so exceptionally well is a true competitive differentiator.

What customers don’t accept is being lied to. That’s just insulting. While it’s no more insulting than it ever was, it is easier to get found out, since there are just too many sources of information available for customers not to verify what they’re being told. And it’s too easy for customers to share their dissatisfaction within minutes, as you are proving by reading this.

If you can’t always be truly exceptional, at least always be exceptionally true.

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

When the company that’s owned the top spot in the Interbrand Global Brand List for the past eight years makes a move, others follow. Or, at the very least, they take note.

Coca-Cola has released… no, not its secret formula, but the carbon footprint of its various brands. That’s right: we now know that “a 330ml can of Coca-Cola sold in Great Britain has a carbon footprint of 170 grams and the same sized can of ‘diet Coke’ or ‘Coke Zero’ has a footprint of 150 grams. A 330ml glass bottle of ‘Coca-Cola’ has a footprint of 360 grams”.

So - what does that mean? Does it make Coca-Cola green, because it’s facing up to its corporate social responsibility and working on programs to reduce its footprint? Given what happened when it tried to improve its formula in the 1980s, could this be a key strategy for the company - as it leaves the product alone and looks at how CSR can enhance the brand? That was the view the Chief Executive took last year…

Will you soon be surrounded by analysts measuring your company’s carbon footprint? Or is that already the case? Of course, not everybody’s customers react as strongly as Coke’s when products are tweaked - most welcome changes. And, in companies where funds are harder to come by, product managers are still likely to shout louder. Yet this announcement is unlikely to remain isolated… would you bet against carbon footprint becoming an integral part of Annual Reports, alongside EPS and ROCE, in ten years’ time? That’s the way the Environmental Protection Agency is heading in the US…

But don’t panic just yet. Service can play a major role in reducing carbon footprint - all along boosting profitability. Cutting unnecessary trips through routing and scheduling and by ensuring techs have the right part, reducing inventory levels, improving remote support… it’s only natural to look at this from a business perspective, and to how it improves first time fill- and fix-rates, or calls/day. And there’s nothing wrong with that. But you know what? There’s nothing wrong in acknowledging that it cuts down your carbon footprint, either. That’s when it all starts tying together. Neat, eh?

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

I wanted to expand on the concept covered in the previous entry to explore a key benefit of excellence in service - one that is all the more critical in the current climate.

We have seen throughout this blog how service delivers profitability on a sustainable basis. It helps you retain profitable customers at a time when, rightly or wrongly (don’t get me started on this one - not here…) marketing spend is typically cut; it offers differentiation at a time that product commoditisation is rife. Sure, mass customisation is happening; but technology makes that easier to copy than differentiation built on people and processes; differentiation, that is, built on service.

So these uncertain times call for proven solutions and methodologies. As President Obama said on the steps of the Lincoln Memorial on Inauguration Day, “Our workers are no less productive, our minds not less inventive, our services no less needed, our capacity remains undiminished”. He was addressing a US crowd, but such statements ring true around the globe. Yet what these times are compromising is the critical link between that invention and the financial gains it stands to deliver.

Let’s take one simple example, since everybody else seems to be doing the same: Twitter. Do you tweet? I’ve only just started (feel free to follow me), out of a mixture of curiosity and fascination. The phenomenon itself is gathering attention, but so is curiosity over how it will make money. Indeed, is there any money in Web 2.0? I expect Apple and its network of independent iPhone Apps writers would merrily tweet ‘yes’. But, for many, the question mark (and the cloud of the previous dotcom crash) hovers.

With service, there are no such debates. There is room for constant improvement, in which technology (including Web 2.0) can play a significant part; but the fundamentals are a given. Look after your customers, and they’ll look after you. And, when the winds are howling and the levies are cracking, as is the case all around us, it’s imperative to ensure we excel at the basics before attempting to stretch. Many a great offerings have failed due to bad timing. But there is no such thing as a bad time for great service. Service always delivers.

That’s what makes service sexy. Because it’s not about comparing a sweaty technician with a funky website. It’s about knowing whom you can count on when it matters. And, if your customers can count on your service infrastructure to deliver, so can you - to deliver profits. And that’s always worth tweeting about.

By Shannon Rentner, Director, Servigistics

We’ve been saying it ever since I started working here: post-sale service can not only be a competitive differentiator, but it can also be a source of revenue. Yeah, yeah, and I sound like a broken record - oh wait, people under the age of 30 may not understand that reference to records….

In fact, service made the cover of BusinessWeek once again – but as fellow service blogger John Wild points out – “What was missing was the Business to Business sector in which extreme customer service is so important now.”

Wild also reminds readers that “the end business customers (those that rely on the equipment they’ve purchased or leased to remain performing or to be service ready) are a fickle bunch. They’re paying for performance (up time) and expect it. Let them down, and they’ll start looking elsewhere for products that perform better or that are serviced better. So this challenge hits right at home in the field service and service parts logistics environment.”

That means that the right part better arrive with the right technician at the right time at the right location…or else you’ll miss your SLA or the client will simply do business with someone else in the future.  

Why some many business publications fail to mention B2B post-sale service is perhaps due to the fact that it’s just not sexy.  After all, the fun comes from buying – not maintaining or repairing, right?

Wrong. Post-sale service  is sexy. It’s sustainable, socially responsible, profitable and catching on. Hope your business is ready!