Monday, March 05, 2018

Nurturing Relationship with Customers in the Face of Global Uncertainty

The financial crisis that swept the US and sent tremors to most of the European Union is definitely one of many global uncertainties we hope we never have to face but unfortunately has now entered our front doors. 

There is no escaping this.

Those who are still in denial and have not planned contingencies will find themselves with a company with no more assets or working for another owner.

During the Asian crisis, the only thing we could do was prepare for the worse. 

I was working for an IT company providing maintenance services to computer network systems. 

We had to get down to the painful process of re-assessing what we really have in terms of receivables, of projected sales and current cash flows. 

Managing a marketing group at that time was so painful because I was there witnessing and causing a lot of good people to leave.

I trained these people and some may have to use what we have taught them somewhere else. 

The Asian crisis hit us at a time when most of our projections were already carved in stone. 

Dropping brands and replacing others were such an emotionally loaded process for some of my sales people who have built their relationships and competence around a certain product brand.

Even before that crisis, I already knew that the only way we can assure constant profitability and sustainability was to nurture a critical mass of customers.

We have to do the math.

We have to calculate to a certain degree of confidence how much each of our customers were contributing to our annual revenues: which ones provided the highest margins and which ones were the least costly to serve.

It was a learning process for both Marketing and Technical Support teams learning that less than 20% of our more than 300 customers under contract yielded 80% of our revenue in the maintenance service category.

Maintenance services contributes 40% of our overall revenue every year.

It also contributes the most profit margin after the first year of the contract.

We ranked and grouped them in such a way that those who constitute 80% of our revenues were now assigned to the most dependable Account Executives.

No account executive was suppose to handle more than 10 of these accounts.

I handled the most difficult accounts (accounts with mission critical servers).

It was a tedious process of looking into each of our accounts and doing the following:
  • Updated their profiles.
  • Determined the impact of the crisis on each of our customers (ability to acquire, expand, continue maintenance, recruit new people)
  • Current products and services we have delivered and projected to be delivered to the customer
  • Impact of the crisis on our own products and services and our ability to deliver them
  • Impact on pending orders (delivery period, price, discounts, etc.)
It was top priority to start doing courtesy visits instead of cutting down on the visits or customer calls.

In an economic crisis, sticking to the basics can force you to consider what you totally ignored in more complacent times--your existing customers.

You will start getting the most simple and elementary notes on customer service: Using basic customer service strategy for customer acquisition and retention.

Let's get back to basics about acknowledging who are your customers.

When identifying Customers in the Customer Service perspective, you are only looking at two (2) major kinds: Internal and External Customers.

People in your organization who need your products or services to get their jobs done are your Internal Customers.

On the other hand, people or organizations outside yours who require and buy your product or service to satisfy a need or solve a problem are your External Customers.

You need to know the distinction between the two for purposes of managing processes and measuring results.

Both require respective Customer satisfaction metrics in some way to measure the quality of service or product delivery.

Your concern for Internal Customers is cost driven while for External Customers it is revenue and profit margin driven.

The approaches to communication and service delivery will be different.

The proximity of Internal Customers to you makes it relatively easy to deliver Internal Customer service.

External Customers however will require different media or channels to communicate to you.

You will have no way to determine where your External Customers are, physically and in mind, at any given moment to specifically trigger communication.

If you are working for a retailing organization selling microcomputers and its accessories, and provide maintenance service, you will have Internal and External Customers.

Your Accounting Department may have people who will be using PCs that will need your maintenance service.

It will be quite odd to tell accounting to go call your competitor for service you already have in-house.

Your External Customer may be a company, individual or any organization using PCs that may need your services.

The quality of the delivery and the constitution of "good" Customer Service is hinged on the expectations of that Customer and execution of service.

Beyond the measurable results, the quality of the service or product is really based on how close we are to meeting and satisfying Customer expectations.

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