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.