Every firm these days is supposed to 'get close to the customer'. but that advice doesn't tell you how - or what to do when you've got close. The answers are clear from study after study. Having got close enough to understand completely what the customers want, a star company doesn't just seek to satisfy them.
Rather, to quote one star, 'We aim to delight our customers'. The speaker is Edward Wilson, chairman of the family-owned Ulster Carpets in Portadown. One of its delightful methods is to give domestic customers a 60-day product guarantee. That's following a well-trodden way to customer delight - the potential cost of the guarantee enforces high quality.
Thus, one Florida exterminator company became famous for promising total elimination of the bugs in question. If the monsters reappeared, the firm would pay for the rival of the customer's choice to redo the work. You couldn't give yourself a greater incentive to perform to perfection and delight. But can you measure the latter?
Customer surveys show what proportion of customers are 'very satisfied', as opposed to merely 'satisfied': or think that your product and service quality is 'excellent', as opposed to plain good. That difference is enormous when it comes to one truly vital statistic: the percentage who will buy again. When Xerox examined the relationship, it found that the delighted customer bought again six times more than the satisfied.
That's money in the bank. Achieving delight, though, depends on what aspects of the product and/or service matter most to the customer. To spray-gun manufacturer De Vilbiss Ransburg, that includes providing 'a better, easier paint finish, more information about how to get the best from the product and quick and reliable delivery'.
Its average lead time has consequently been lowered from four to six weeks to two days. Delivery performance has improved from a miserable 40% to near-perfection: 98%. Such figures look and are marvellous, but beware. Unless you're right about customer requirements, it's easy to waste time, trouble and money on satisfying a requirement that doesn't matter to them - or matters less than something else.
Companies can throw out the baby with the bathwater. Two firms speeded up their performance, one via its telephone staff, the other via its delivery drivers, only for market share to slump. Customers wanted time to chat - and resented being hustled. Federal Express likewise jacked up its delivery speed, only to find that misdirection of consignments soared as well, and at inordinate expense.
Getting close to the customers thus has one clear meaning: really understand their needs. House of Hardy, which every angler knows for its tackle and fly reels, is another 98% performer. Delivery time in the UK, once four to five weeks, is now almost invariably 24 hours. The firm is sure this is important because 'We have worked very hard to find out all we can about our customers and what they want'.
The key, in a diverse marketplace, was to slash distributorships from 1,000 to 50 specialist dealers. Not only does such concentration provide better control and stocking: the dealers provide manageable, knowledgeable sources of customer feedback. You can't get close to customers without having good channels of communication - and using them to obtain a continuous customer health-check.
A model example is MSL Advertising's 'client service appraisal' system. It checks every aspect of the relationship from personal and telephone contacts to individual assignments and generally understanding the client's business. Filling in a form isn't satisfactory on its own, however. It's the discussion of the appraisal between MSL and its client that creates the closeness.
Always beware of unadorned, unexplained statistics. Customer surveys lump many different standpoints and reactions together. They may say what is happening with fair accuracy. They won't say why. Nor will they tell you how to advance from satisfaction (or dissatisfaction) to delight. One thing's certain: it won't be achieved through acting on a single dimension of the business.
Ulster Carpets, DeVilbiss Ransburg and House of Hardy are all firms picked out by the DTI as 'winning companies'. To turn customer closeness into success, all three had to modernise the businesses from top to bottom. It's very demanding: but there's no other way.
