Creating a Customer Focused Organisation

In today's competitive market place there are few organisations who do not desire to be customer-focused.. Statistics show just how crucial customer retention can be:

• Reducing customer defects can boost profits by 25 - 85% (Harvard Business School)
• The price of acquiring new customers can be five times greater than the cost of keeping current ones (US Office of Consumer Affairs)
• The return on investment in marketing to existing customers can be up to seven times more than to prospective customers (Ogilvy and Mather Direct)

The bad news is that yet few organisations who truly succeed in being customer focused.

Of course, improving levels of customer service is not an easy fix: it is now all too clear for managers introducing service improvements that customer service is far more than smiles and being courteous. The Institute of Customer Service in UK has found via research that  the factors that matter most to customers can be grouped into five attributes:

• professionalism
• problem solving
• timeliness
• quality/efficiency
• ease of doing business

Each organization needs to determine what really matters to its customers and how the organization can best uniquely meet their priorities.

Customer retention can only be achieved if every aspect of the customer’s contact with an organisation is focused on their needs.   The culture of the entire organisation needs to be customer-centric. This includes not only the product or service offering, but how it is priced and promoted, where it is available, the processes through which it reaches the customer, what it looks like (physical evidence) and the people who deal with the customer.

In generating long-term relationships, therefore, best practice companies develop a service strategy which focuses on ways of improving all aspects of how they do business with the customer. 

The Characteristic of Good Service Organisations

Best practice customer service organisations are characterised by the steps they take to reinforce a service ethic.  These include 10 identifiable characteristics:

1. Regularly Listening to Customers

Customer service needs to be addressed from the perceptions of the customer, not the service provider.  Best practice organisations recognise the need to listen to their customers.  Only by asking customers for their views will you see what is important from their perspective and identify what needs to improve.

The first step, therefore, in the satisfaction of customers is regularly to canvass their views on how the business is performing and what needs to change.

2. Visionary Managers Who Lead by Example

Many senior managers make the mistake of exhorting employees to focus on the customer yet fail to demonstrate through their actions that they; too, are committed.  Words from on high are meaningless unless backed by actions. The key to service success is for managers to model the types of customer service behaviour they require from their staff.  These must start from the top and be visible to all.

3. Setting and Maintaining Standards to Meet Customer Expectations

Establishing standards of performance to meet customer expectations provides a benchmark for all employees to reach on a consistent basis.  It helps if these standards are understood and meaningful to all employees.  Many organisations are taking a more thorough approach to standards by integrating customer service into their competency frameworks.

4. Training and Development is Embedded into the Organisation

The power of commitment and culture has come to be seen as a central foundation of customer service training.  Increasingly it is recognised that a training course is not enough - feedback and coaching on the job are important for training to ‘stick’. 

5. Focusing on the Customer Inside and Out

Excellent internal service quality  ► Excellent External service quality ► Satisfied customers ►Customer loyalty & retention

The above process simply demonstrates the link between internal service quality and external customer satisfaction. If employees feel they are getting a high level of service and support from other departments they are much more likely to deliver a good service to the external customer.  Unless internal service issues are resolved, time spent focusing on external customer issues is ill-spent. 

6. Improving Processes

Process analysis is now part of many service improvement initiatives. The benefit of process review is that it gives organisations an opportunity to ‘start with a blank sheet of paper’, tracking-back its processes from the point of contact with the customer.  This means devising new ways of working, or re-working, which are the least bureaucratic and complicated for the customer.  The result is often greater flexibility and responsiveness to customer needs.  Experience shows that this approach works best when employees are involved in the design of the new processes and where training and support are provided to help them acquire new skills.
 
7. Empowering Employees

Today employees are given a much stronger role in making customer service changes - after all they deal with customers day-to-day.  Best practice organisations engender a sense of responsibility and accountability in their employees to make things right for the customer.

8. Service Recovery

The move towards empowerment also coincides with a recognition that complaints need to be dealt with. Research shows that organisations that adopt a philosophy of ‘Right First Time’ and effective service recovery ensure greater customer loyalty.

Many businesses are now empowering their staff to take decisions to resolve customer problems as they occur, avoiding the need for lengthy and bureaucratic procedures.   Best practice organisations train their staff in how to effectively deal with the emotion and the facts of a complaint, to resolve this speedily and most often via the telephone rather than through lengthy exchange of correspondence.

9. Recognising and Reinforcing Excellent Service

Recognising and reinforcing good customer service behaviour is a continuous and powerful means of demonstrating its importance. 

Many best practice service organisations develop reward and recognition schemes to encourage excellent service.  There are a variety of methods which can be used to reward and recognise outstanding service achievement and the most appropriate route will depend on the culture of the organisation.

Whatever the reward, the criteria for recognition should be seen to be fair.  Managers need also to remember the power of a simple ‘thank you’ and ‘well done’ which can often mean a great deal to their staff.

10. Integrating Customer Service into all Business Activities

Successful service organisations ensure that customer service is integrated into all the activities of the business, so that focusing on the customer becomes part of the organisational way of life.  This means including customer service as a key component of recruitment, induction, the setting of performance objectives and competencies, appraisals, reward and recognition, employee communications and all management meetings. There are numerous illustrations of customer-focused organisations adopting these integrated routes to business management.

How customer-focused is your organisation

Use this simple check list to self assess where your strengths and development areas are in relation to your organisation’s customer service.

Tick as appropriate :

Conclusion

Customer service needs to be integrated into the business - its culture, its language, its role models and its teams and all its management activities.

Many companies have faced fierce competition and enormous pressure to reduce costs.  This has led to cut-backs: layers of management have been removed and so have swathes of employees.  Yet there is still a need to produce even higher standards of service.  In times of difficulty or pressure of demand the temptation is to forget the service message.  Some, but not all, organisations have seen value in constantly re-inforcing customer focus as a means to gain greater flexibility and responsiveness.

Sarah Cook is Managing Director of the leadership and service excellence consultancy, The Stairway Consultancy Ltd. She is the author of Customer Care Excellence published by Kogan Page.

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