Time for Overalls and Work
“Opportunity is missed by most people because it is dressed in overalls and looks like work.”
- Thomas Alva Edison
Well, it’s almost official, we’re in a recession. So now what? A solid strategy is to make sure you don’t lose the customers you already have. A major opportunity in this market is a strategy around service. Good service can win lost customers back and keep the ones you have satisfied. Here are some tips on what you can do to make service pay in a recession.
First, you need for your customers to be satisfied after each and every service event. A current trend is to apply the practices of Total Quality Management (TQM) to service. So to summarize what this means for service: understand the customers’ expectations, identify the risks in trying to meet them, put processes in place to mitigate them, incent staff, and create a feedback loop. Simple, huh?
The first point, understanding expectations, isn’t as easy as it sounds. This fact is why company spend hours negotiating Service Level Agreements (SLAs). Now these are very popular in the IT world but are used more and more in other industries. The problem is many customers have iron clad SLAs are still unhappy with their service. Why? Expectations. Meeting expectations isn’t enough.
Think about it, when you were in grammar school, were you happy with an “S”? All that said was you were “Satisfactory, met expectations.” In other words you did what was expected, what you were obligated to do. Big deal, I’m sure there are a dozen of your competitors that are willing to do a satisfactory job as well.
So how do you exceed expectations? By focusing on the second step, risk mitigation. You better have everything in place to execute and execute well. That means having a high performance service supply chain. Everything should be monitored and managed: repair, planning, sourcing, pricing, and logistics. Stock outs, for example, should be a major exception rather than a “fact of life.”
The final step of a feedback loop is often underutilized. Notes when closing a case really doesn’t cut it. Root cause analysis of what caused the problem is key. Can you prevent this issue for impact other customers? Can you lessen the impact to other customers? Unless you are really analyzing data, capturing the field knowledge, completing the feedback loop with all the data, then finally making this information available to the front lines, you are operating in the dark.
Another missed opportunity is repair. In a down economy, people hold on to their equipment longer, this means more repairs. For repairs, the demand patterns are less predictable and more speculative, the sources of supply are varied (new, repaired, and refurbished), the life cycle extends beyond manufacturing lifecycles [in some cases like A&D by decades], repairs can take multiple paths, the levels of part substitution are huge, and multiple levels of inventory require optimization. All of this makes repairs a complicated but critical piece of the chain.
So that’s just a small window into some of the tactics you can use to build into you service strategy. Many people forget that service can be your most powerful profit lever, especially in hard times. Any the only way to pull that lever is with quality service and quality service is hard work.
February 4th, 2009 at 8:05 pm
Reading through these blogs brings back many memories from my times as a field service engineer, field service supervisor and branch manager for one of the major computer companies in the ’80s. We didn’t have the benefit of an organization like this one but some lessons can be learned “the hard way”. I took over a branch that was losing money, was next to last in customer satisfaction according to the company’s annual satisfaction survey (133 out of 134) and had employee turnover greater than 10%.
The biggest issue I noted as I assumed my new job was that employees (everyone, not just the engineers) were not focused on customer satisfaction and literally took no pride in achieving positive customer feedback. Engineers were not adequately trained and viewed being sent off to training as a major inconvenience. Call slips (the note taken when a customer calls in with a problem) could be found on the floor, in the trash, etc. So I began a series of talks with my almost 60 employees about how I felt about our job and what I expected in the future.
I started with a VHS training tape from John Cleese (yes, of Monty Python fame). I believe it was entitled “Who sold you this then?” and demonstrated how an engineer can absolutely destroy customer satisfaction and confidence by convincing the customer he/she had bought the wrong product. After some discussion, the group decided the salesperson really had sold the wrong product but the engineer took entirely the wrong approach in addressing the problem. The consensus was that the engineer should talk to the salesperson about why the engineer believes the wrong product was sold and look for ways the engineer could help the salesperson get the customer to upgrade.
We continued to go through similar scenarios (no, not all John Cleese) in subsequent meetings with similar results. Ultimately, my goal (accomplished) was to get all of the branch staff to look for ways to help our customers be successful in their business. This also led to engineers more closely involving sales to sell additional products and services.
My point is simply that I don’t think it is entirely appropriate to saddle technicians and field engineers with sales related tasks and metrics. If they are motivated to always look for ways to improve the customers’ situation, the sales opportunities will surface.
(P.S. By the time I moved on, 2.5 years later, the branch was the most profitable in the district, had employee turnover of less than 5% per year and was in the top 1/3 of the nation in the customer survey.)
February 5th, 2009 at 7:56 pm
Mike-
Great observation - overall, the consensus seems to be to your final point: avoid making service techs into quota carrying salespeople but encourage them to find ways to improve a customer’s satisfaction - and that may include a conversation with the customer or a conversation with their sales colleagues. “Gosh lady, even though I’m here to service your plasma screen TV, I can see you’re having problems with internet access because your wireless adapter has been installed incorrectly, (or it’s low quality, or it’s slow, or there’s a better way to get internet access). You should look into an upgrade to improve the speed and quality of your connection.”
You also bring up a good point about taking pride in customer satisfaction - if service techs are rewarded and praised for their successful service, then they will be motivated to continue to deliver excellent service. This is also something that appears to be changing as post-sale service becomes more important. Thanks for commenting and please feel free to share more of your experiences with our readers!