Why Customer
Focus Differentiates
By Ray Miller
Has this ever
happened to you? You're in a hurry. You want to complete your
business and the person serving you is preoccupied with something
other than serving you. Then when you are served, you might get an
insincere apology for the delay followed by the completion of your
transaction. If asked to describe this experience you would likely
respond "That's typical" or "It's nothing more and probably a little
less than I expected."
Welcome to the world
of the average consumer.
Most people will
probably tell you that good service is just common sense. They would
also invariably say "For something so common, it sure is hard to
find!" Edward R. Murrow said it very well: "What is obscure, we
eventually see. What is obvious usually takes a little longer."
Research from a
litany of reliable sources tells us that the primary reason that
customers switch their loyalty from one company to another, in the
range of 40% to 68%, is because of a perceived attitude of
indifference on the part of the service provider. Sure, some leave
because of price, or product quality, or other personal reasons; but
the vast majority leave because of Poor Service.
These days,
customers are really in the driver’s seat. The options and choices
of similar products at similar prices at similar quality levels are
greater than ever.
Advances in
technology, reductions in production time and access to global
distribution mean that products and services can be duplicated and
customized faster than ever before. And your customers know this!
Consumers have more
choices than ever before. This creates an interesting challenge. How
do you create value when customers today are not seeing much
difference in the choices they are offered?
Customers
tend to look at value from four
perspectives:
the
Price
of the product or service,
the
Quality
of the product or service,
the degree of
Innovation
offered by the product and
the
Service
provided to customers.
The quality of products continues to
improve universally and competitors have developed the ability to
duplicate even the most complex of those products. Innovation
attracts younger consumers but no sooner do we see one innovation,
than someone else comes along and clones it plus adds a few more
bells and whistles.
Consider the evolution of the flat screen
LCD TV. A couple of years ago, few could afford such a luxury item.
Now there are LCD TVs to fit a wide range of budgets. And in
addition to the traditional manufacturers of televisions, it seems
that any one who manufactures computers also has their own LCD TV.
Developing a competitive advantage based
solely on product quality and/or innovation is very difficult. And
sustaining it is very expensive. You will also find that there is
more price parity today than ever before. Very few companies can
compete for long using price as a differentiating factor. By
shifting your emphasis to service quality, you will find the
greatest room for differentiation.
For most companies, customer loyalty is
the key to future profitability and growth. Corporate newsletters,
national periodicals, and most executive speeches are peppered
with a litany of examples demonstrating
the relationship between customer loyalty and profitability. In
almost every market we've learned that retained customers:
-
Are less expensive to serve because they know their role in the
process.
-
Tend to lower marketing costs.
-
Often purchase more over time.
-
Are open to purchasing new and different products as they are
offered.
Clearly, customers
value service and whether they get good service or not, they expect
it. If they don’t receive service at a level that meets their
expectations, they will go elsewhere until they find it. Whether the
economy is on the down swing or the upswing, no one can afford to
lose customers.
Many companies still deliver lousy,
inept, shoddy service and even more deliver only average service.
This creates a
unique opportunity for those who dare to be different.
Simply stated:
Companies who differentiate themselves through their service have a
distinct competitive advantage.
Ray Miller is
Managing Partner of The Training Bank, a Training and
Consulting firm specializing in Customer Focus, Service Improvement,
Leadership and fully customized training solutions. He is also
co-author of the book That’s Customer Focus.
You can get more
information about That’s Customer Focus by visiting
www.thatscustomerfocus.com or
www.thetrainingbank.com
If you would like a
pdf version of this article, please
click here and we will send you one.
Return to Articles Page
