Don’t bring an operations knife to a customer service gunfight: Customer engagement must be the first priority in a connected world
“Why yes, I regularly purchase products from mail order catalogs” said no one in the last 20 years. Yet 20 years ago, most catalog retailers were thinking to themselves “If only we could improve our operations and reduce our cost of delivery, print, and call centers, we will outprice the competition and really rake it in!”
This line of thinking is obviously absurd in the face of Amazon’s success and the Internet commerce imperative every surviving retailer has now embraced. However, this “internal operations is all that matters” mindset is still rampant in commercial service contracting companies today. Like the retailers of the 90s, commercial service contractors are focusing their systems upgrades on internal operating efficiency and accounting when instead they should be girding themselves for the internet shootout that is going to occur in the war over customer engagement.
Efficiency ≠ Growth
So why did catalog companies believe that operational efficiency and outpricing the competition would provide them with the edge? Much like commercial service contractors today, they focused on tactical, cost saving goals that were easy to understand. For example, it’s not difficult to calculate that reduced windshield time for technicians will result in fuel and vehicle maintenance savings, increased availability for billable calls, and decreased price for the end customer. The math seems pretty simple right? Reduced costs = Increased profits and growth
This equation is WRONG.
What the equation is missing, and what catalog retailers failed to recognize, is the eroding demand that occurs when customers inevitably switch to a competitor that provides a better customer service experience. Amazon, eBay, and the hundreds of other online retailers provided shoppers with a simple, online experience that resulted in the downfall of the old-guard catalog retailers. Commercial service contractors are at risk of the same demise if they don’t provide their customers with an engaging and enduring online customer service experience.
Step One: Demand, Step Two: Efficiency
This is not all to say that commercial service contractors should neglect operational efficiency. For example, Amazon has one of the largest, most efficient distribution models in the world. However, the distribution model was developed well after their ecommerce platform released to the public. Amazon understood that an efficient distribution model didn’t matter if they could not engage and retain customers. By first building the ecommerce platform that shoppers enjoyed, Amazon drove demand that later supported the construction of their distribution model.
How to Avoid the Catalog Trap
How can modern commercial service contracting companies avoid the catalog retail trap? Stop obsessing on operational efficiency and cost reductions. These are important, but hardly matter to your customer when another company provides much better customer service. When you lose all your customers to an internet savvy competitor, no amount of operational efficiency will lead to profits on zero revenue.
Take a page from Amazon’s book. Focus on generating demand by engaging customers online and providing them with an amazing customer service experience that keeps them coming back for more. Strong customer engagement and a reputation for amazing customer service will yield robust revenue that offers the possibility of perpetual profit. You will have the privilege of focusing on improving operational efficiency for many years to come if you survive the internet gunfight that you will inevitably face in the next few years.
No offense to the OP, but why is this news or revelatory? The customer drives the business and always has. No matter how complicated the service or product, everything reduces to a transaction of money for things; basic supply and demand.
Operating costs aside (yes they can be spendy and bloated), the customer doesn’t care about that during the sale or delivery/installation or support of their product/service. The customer wants to be SERVED.
I used to work for a company that focused on Customer Satisfaction rather than customer service and I noticed a huge difference. CustSat is SALES focused and can be manipulated by offering rebates or credit for install or monthly fees. A customer can become “satisfied” with enough boot-licking and candy. But if the service or support are terrible, it won’t matter in the end.
Customer Service on the other hand starts and ends with a focus on the customer’s needs and isn’t afraid to give a truthful report. I can’t remember the number of customer’s who were told by some sales agent or engineer “oh, yes we can fix that problem” only for me to have to be honest with them and say (i.e. in the case of a DSL line) they are too far for this service product but we have alternatives. While they are disappointed at the situation, they are appreciative of the truth and can make solid business decisions based on that. CustSvc cares more about the CUSTOMER than the sale or the commission.
If you care about the customer enough to be totally truthful about what products/services can and cannot do and provide top-shelf professional customer service on-site, then CustSat will inevitably follow like the day follows night.
Greg,
Thanks for your thoughts! I agree that this is not news, nor is it revelatory for most business folk. However, we find that the market we serve (field service contractors) tends to focus solely on squeezing every dollar out of their operations instead of providing their customers with amazing customer service through information and visibility to the services they provide.
Think about your experience with service contractors. Have you ever hired an HVAC, electrical, or plumbing company only to receive an invoice that briefly summarized the work performed leaving you to question what the technician actually did?
Like you said, providing the customer with the truth may hurt, but in the end they will appreciate it and trust you more. This way of thinking is uncommon among service contractors. We want challenge the status quote and enable service contractors to build enduring and endearing relationships with their customers.
Thanks for your gracious reply and not taking offense since I completely agree. I am a service technician and regarding the market I serve, I consider it mine, not my companies. The customers are mine, not theirs. I AM the face of the company: I’m the one the see for installation and repair, I’m the one that hears “what took you so long” or “I’m so glad you are here” and have to remain unperturbed at an accusation and i cannot pass the blame to the dispatch department, etc.
Now that I am a senior tech over other markets, I want to pass on the customer focused passion and ownership mindset since it is rooted in pride in workmanship. I’ve often stated in project meetings that Customer Satisfaction will always follow Customer Service, but as you said, it will take a while to win over the sales driven and EBITDA driven management culture.
Greg,
I’m glad to hear that you are passing along this customer focused approach. As you mentioned in your original post, it comes down to clear communication with the customer. Whether the communication is over the phone or in person, if you keep the customer updated and informed about the process and the services provided they will be understanding and happy. Our view at ServiceTrade is that this customer communication can be enhanced with technology.
Much like we saw with the eCommerce revolution in retail, I expect that we will see field service customers receive much more real-time, digital information about the services they purchase and they will be happier for it.