Meridian strongly encourages financial benchmarking. One of the dangers, however, of too great an emphasis on financial benchmarking is the high probability that employees will lose site of your most important asset – your customers. While busily tracking bottom-line results, scrubbing costs, and driving efficiency to new levels, somehow customers get ignored. In today’s marketplace, allowing your organization to lose customer focus is the kiss of death.
Today’s customers have more choices for products and services than ever before. You need them to choose you or you simply won’t be in business! With that said, customer focus alone won’t make your company successful. It must be partnered with fiscal responsibility. A customer focused company without that fiscal responsibility can die from lack of profits, as we found with the majority of Tom Peters’ In Search of Excellence highlighted companies no longer in business even though they delighted their customers. Creating happy customers and profitability is a delicate balancing act. Here’s a proven seven-step process:
1. Corporate Customer Goals – Start with at least one overriding, measurable corporate-wide customer goal. Whether this number is retained customers, new customers, customer satisfaction ratings, or some other measure, customer focus must start at the top of the organization. When a customer goal is added to typical profit and ROI or ROA goals, and top management bonus compensation requires meeting all goals to qualify for the bonus, customers will be kept in focus!
2. Customer Differentiation – When we start espousing customer focus to employees, it’s natural for our employees to assume they should focus equally on all customers. The problem with this “treat-everyone-nice” approach, although it sounds good in theory, is that it’s simply not cost-effective. If you study companies who used the “Wow” theory of customer service, many are no longer in business. While wowing all the customers, they went broke.
An integral component to customer focus is company leadership clearly defining in quantitative, measurable terms good, profitable customers (at Meridian we call them Maximum Value Customers or MVCs) and also clearly defining bad, unprofitable customers. We don’t want employees knocking themselves out, and subsequently knocking out our profits, trying to please unprofitable customers.
3. Leaders Walk the Talk – Once you’ve defined your company’s MVCs, and educated employees about these MVCs, company leaders must show by example how to treat those special customers. For instance, wholesale MVCs deserve periodic top management visits. Unprofitable customers don’t! Show your employees by example that you know the difference and allocate your time accordingly, which means you don’t get to spend hours at lunch with your most liked customer if he isn’t an MVC!
At the retail level, consider management specials to show appreciation for your MVCs. This strategy may include special pricing for your MVCs on certain products over limited or extended periods with a special MVC ID card.
4. Departmental Goals – Once company leadership is on target with corporate customer focus goal(s) and is walking the talk, request that each and every department set their own meaningful customer goal. This is in addition to their financial benchmarking goals. Challenge your employees to think like the customer and figure out what an MVC customer would want from that department. Examples Meridian clients have used include:
· Percentage perfect deliveries (drivers)
· Percentage perfect invoices (A/R)
· Percentage customers served known and called by name
· Restroom cleanliness score by mystery shopper
· Percentage same day order deliveries (dispatch)
· Percentage credit applications processed within 24 hours
· Keep-full run-outs. (Goal is zero!)
· Percentage customers on automatic fuel ordering
As part of the goal setting process, encourage and allow departmental employees to share their assignment with MVCs and ask those customers what they want. Directly asking your MVCs gives you double benefit – you show your MVCs you care about their opinions, while at the same time, you get accurate input about your meaningful goals.
5. Individual Goals – Once departmental goals are set, each individual needs clear, measurable goals that will support the departmental customer goal. Department heads work with each of their individual team members to mutually set realistic goals that each employee feels is achievable and meaningful.
6. Feedback – Monitoring and feedback are vital to success. Are goals getting achieved? If not, does the goal need to be reset or the action plan modified to attain the original goal? Feedback should be ongoing so that corrective actions are timely.
7. Celebration – As individual, departmental and corporate goals are achieved, sound the trumpet! Nothing is better for employee attitude than success. And that positive attitude will flow over into even stronger customer focus and better service.