By Paul Courson, Managing Director of Cablofil UK
It’s impossible to switch on a TV or radio these days without being confronted with an economic gloom that is making the markets jumpy and the commercial marketplace an increasingly challenging place to be. Between soaring unemployment in the USA, Euro zone bail outs and the seemingly endless capacity of emerging markets to undercut western manufacturers, the pressure is on.
One way to address this situation is to take some hard decisions on price, reduce margins, cut overheads and maybe even lose staff. Sound familiar? It’s an approach that many companies have taken over the past couple of years to help them keep their heads above water and on some levels, for some types of businesses it may work … for a while.
But in reality what happens when a company cuts the cost of their product, quality has to suffer somewhere along the delivery chain. That may not, in the short term, be in the quality of the product itself, but if overheads are cut it may affect delivery turnarounds, technical support or choice of products within the range. It will certainly affect research and development and the company’s ability to respond quickly to its customers changing needs.
Above all, though, it will affect people. Cutting overheads at some point inevitably means reducing the head count to drive down costs and in a culture of cutting corners it is often the best people that jump ship in search of an environment more worthy of their talent. If the business in question has contracted, reducing staff numbers is both understandable and forgivable.
However, some companies cut people to an effort to stop their business from contracting and this is quite simply a mistake. When times are tough there is a greater need than ever to nurture the team because the only way to succeed in a recession is by employing talented people in sufficient numbers to differentiate on service, not just cost.
Here to help?
The thing is, we should all understand about the frustrations of dealing with a company that has sacrificed good, old fashioned service for lower overheads, because we’ve all experienced it. You pick up the phone to ask a simple question and end up having to navigate through countless electronic menus, followed by several people who have no idea what you’re talking about but are keen to tell you how important and valued you are, before you finally, if you’re lucky, get put through to someone that can help. Is there anything more annoying? And, really, is there anything more unnecessary?
Unfortunately, this scenario is now a symptom of a business culture that has become accepted as inevitable, even amongst those who, like me, find it so irritating. But actually, it doesn’t need to be inevitable. In the race to be more competitive, leaner and slicker than the other players in the sector, too many companies have sacrificed genuine, responsive, personal service and with it the ‘extra mile’ ethic that would give them a far greater competitive edge than any fancy CRM system or on-hold sales messages. The ‘me too’ trap of reducing overheads and head count and introducing target-driven response times and process-driven customer service protocols has reduced the customer to a name on a balance sheet. And if they are just a name, how can they really be valued?
A personal approach
For companies to really deliver on service it needs to be personal. That not only means that the customer has to be treated like an individual but that the company representative has to be prepared to follow through on any initial customer contact.
In a genuine customer/company relationship, the salesman doesn’t just take the order and run; he advises on the order, makes sure it’s delivered on time and in full, follows up and stays in touch. He takes the credit if the customer comes back with a further order and takes the flak if things go wrong. And if there is a problem anywhere along the line the client should be able to expect him to step in personally to put it right before the relationship sours. Yes, it sounds old fashioned. Yes, it sounds like hard work. But the reality is that businesses operated on that basis for centuries before technology gave us a less personal way of doing things, and both customers and the companies they deal with could benefit from returning to those basic principles.
I am, of course, fully aware that the standard response to this is that times have moved on and we have to move with them. But do we? Actually, what we need to do is look more holistically at our cost models and instead of seeing customer transactions in black and white we need to look at the whole life costs of managing a customer relationship and the real cost to customers of buying from a lean organisation. While many companies will excuse their downsizing on service as a means of reducing overheads and thereby keeping costs down for customers, in reality, this approach can actually increase the customer’s costs.
That’s because those attractive ‘lower’ prices may mean delays on site because deliveries take longer or orders are wrong, with no-one taking personal responsibility for getting it right. Indeed, the quality may even be less than expected as part of the drive to offer the customer a better deal. When you look at it like that, surely, saving a few pounds here and there is a very expensive way to do business and with only a call centre or an automated email to complain to, taking up even more valuable time, what is the most likely outcome? A further time investment in finding an alternative supplier.
Back to basics
The irony is that good service doesn’t have to involve a larger team, just a culture of customer care that runs throughout an organisation. In that way, customers can be confident that they will be able to deal with a real person who can answer their questions and deal with any problems. They can also trust that they will have continuity of service, being able to deal with the same person time and again: someone who knows them, understands their business and genuinely values their custom.
It can be done. Even as market leader, we cover the whole of the UK with just eight sales managers, many of whom have been with us for several years.
Our customers come back to us time and time again not only because they trust our brand and the quality of our products, but because they have built a relationship with a rep who they trust to advise them, understand their requirements, pick up the phone to them and respond quickly to their needs.
All too often companies forget that a successful business is not just built on clever accounting, it’s built on relationships – and that takes real people. So in these days of financial pessimism where driving a hard bargain is de rigueur, let’s not forget the real value of investing in people with expertise and enthusiasm … both for the supplier and their customers.