Business leaders must appreciate that making an investment in customer service achieves not only immediate customer satisfaction but also long-term customer loyalty. Customer loyalty generates repeat business and referrals, and is usually more cost-effective than finding and attracting new prospective customers.

Externally, a company must learn how to please its customers, yet not be all things to all customers. Also, internally, a company has to determine where and how to make strategic investments (e.g., technology, human resources, training, automated systems, etc.) that would yield improved services for the customers and increase the effectiveness of the organization. The right balance between these two games (external customer satisfaction and focus, as well as internal organization productivity and efficiency) must be maintained. Otherwise, even with the best customer intentions, an organization will become unprofitable and non-viable.

The External Game: Where Improving Customer Service Begins

In developing your company's customer service capabilities, you need to decide which customers to focus on initially, and subsequently. Rather than saying you want to improve service to all customers at once, the wiser strategy is to decide which customer types to pay the appropriate attention to.

There are five customer types on which to focus:

1. Suspect Customers - the realm of all plausible customers
2. Prospective Customers- high potential customers you decide to pursue
3. New Customers - recently converted prospects
4. Existing Customer - repeat users of your products and services (who can be divided into low, medium and high users, as well as fully- and not-fully- penetrate users)
5. Discouraged or Lost Customers - those customers who have gone elsewhere

Once priority customer types are identified, then appropriate external activities (marketing, sales and product development) can be developed. These activities need to address:

• understanding customer's current needs and anticipate their future wants,
• appropriately setting, and consistently meeting or exceeding the customer's expectations of your products and services,
• respecting and considering customer's ideas, opinions, and feelings,
• always treating customers seriously, uniquely and professionally,
• providing value to the customer at every point of contact with your organization.

Only by addressing the above issues can the appropriate relationship be developed with customers that can generate their immediate satisfaction and long-term loyalty.

The Internal Game: The Six Supports to Strengthen

Once the choice is made as to where an organization needs to focus its external customer service efforts, then where to direct efforts internally will also become more clear. There are six places where a company can invest their limited resources internal to the business in order to create an capable service company. These areas are places to look within the company for improvement opportunities to enhance external customer sales and service.

The first two supports above are those that your customer directly sees at every contact with your company. These are:

1. Capable, Committed, Involved Employees - whether employees are helpful and effective, working with their heads and hearts
2. User Friendly Policies, Procedures and Systems - whether these facilitate development, sales, delivery and support functions

The next four supports create, sustain and reinforcement those elements that the customer directly sees, and work to ensure a viable organization. These are:

1. Sound Management Practices - whether financial control systems & people practices support and sustain employee empowerment and improvement
2. Supplier Linkages & Relationships - whether these are functional and reliable
3. Proactive Service Philosophy and Strategy - whether this tells the company both what business it's in and what's expected from everyone
4. Competent, Credible Leadership - whether they provide vision, energy and inspiration, as well as builds trust

These six supports act as six firemen holding up a safety net, which is used to catch and carry a company's customers. If any of the supports are weak, or they are not working in sync with each other, then customers are not properly caught and carried, or they may fall out of a company's safety net altogether. Therefore, all six supports need sufficient or growing strength as a company works to attract and maintain more and more customers.

This safety net analogy is also useful in telling us that a company need not work to strengthen all support at the same time. A company can focus on only those supports that are the next to need strengthening. In this way a company can focus its energy and limited resources where the greatest payback can be.

Ten (plus one) Steps to Improve Your Company's Customer Service Capability

After considering the what to improve within your business, here are ten ways (plus one) on how to move those efforts forward.

1. Decide which types of customers (and which product/market areas) to focus on initially. Do not take on more areas than your organization can realistically handle at once.
2. Assess and analyze your organization's current internal capabilities with regard to the six supports. Start meeting with executives/managers, then appropriately involve customers, suppliers, and employees in assessing what's working and what needs improvement within your organization.
3. Get the right high-leverage people in the room to come to a reasonable consensus on analyses and plans. This works to build employee commitment to your improvement efforts. Keep minutes of all meetings to log and keep track of efforts and commitments (stuff written on paper gets more attention than stuff said into the air).
4. Fully understand what currently makes your company's customer service strong. Reinforcing and building on these positive capabilities generates positive motivation.
5. Prioritize areas for improvement, i.e., where the greatest needs are for improved customer service. If appropriate, simply take an executive or manager vote on necessary short-term and long-term initiatives.
6. Solicit improvement ideas from all appropriate staff. They can be a wealth of ideas.
7. Implement easiest improvements first. Focus on areas where smallest time, money and energy investment will achieve the greatest customer and company returns. Don't bite off more than your company can chew at once. Build your muscles for the more strenuous efforts.
8. Eventually involve all staff in improvement efforts, and teach them skills in data gathering/analysis, problem solving and solution implementation. Educate and help your employees to help your organization.
9. Measure the results of the changes being instituted in terms of internal productivity/efficiency, and external quality/service to customers. Tracking results help you learn about your business, and lets you know if your efforts are making a difference.
10. Shift focus as priorities change. Keeping your focus on what are the next things to do keeps the long customer service improvement voyage more manageable and endurable.
11. If you need help, get it. Look to business colleagues, advisors, books or competent consultants to help you along the way.

Summary

Improving your company's customer service is a two-pronged approach. Externally, a company needs to decide which customers it needs to initially and subsequently focus on. The business needs to examine what it is doing to generate new customers and what it needs to do to maintain, or effectively prune, existing customers.

Internally, a company needs to figure out what's working and what needs improvement with respect to its key internal supports. Committed leadership is required to keep efforts going despite inevitable pain and adversity, especially in a highly competitive business. Initial efforts need to be targeted, starting small and building momentum. Employees and suppliers need to be involved in analyses and actions in order to generate uniform commitment and ensure that improvements stick. Employee competence and confidence needs to be built to sustain your company's advantage over the long haul.

Performing all these external and internal efforts proactively and intelligently will generate and ensure long-term success for your business.


Harvy Simkovits, CMC, President of Business Wisdom, works with owner managed companies to help them grow, prosper and continue on by offering innovative approaches to business development, company management, organization leadership and learning, and management education. He can be reached at 781-862-3983 or .