Growth Strategy and Customer Service

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So, the Politicians, the Press and market commentary Pundits will tell us that 2014 could be the year for continued recovery and a much sought-after increase in company fortunes.

This is the year for Growth.

Developing the options for Growth is quite straightforward even if we have to go back to base marketing principles. Using Market Analysis models, options can be presented of where growth could come from and then your decision is one of inorganic or organic growth, with or without some form of partner. Talking with a group of SMEs recently and taking them through business planning principles, I positioned the old concept of the ‘leaky bucket’, which in a traditional business environment means that you fill up the bucket with new revenue but at the same time observe revenue leaks through customer attrition and price erosion. Murphy’s Law will dictate events.

Growth is good, but smart Growth is better.

What really concerns me is when you go through the effort to win business and then lose it through the performance in your deliver and service to them. But before we point the finger of blame, everyone in a company is accountable for Service Excellence; it is just that some parts of your organisation are more responsible for it than others. The rhetorical question I have behind this challenge is why are we more competitive to win business than maintaining it?

As a Consumer and Management Consultant I can’t help but notice that doing the basics in delivery promises and after-sales service appears to be slipping. Through the 90s and 00’s there were significant steps to develop the need for customer excellence. Phrases like ‘Right First Time, Every Time’ spawned a myriad of programmes to reshape the behaviours of employees and managers and redesign processes to eradicate failure. Then came a movement to right shore to lower costs economies customer things that could be completed on the phone or on a PC and at the same time supported by a move to ‘intuitive’ websites. By the time the 2008 financial meltdown came, companies were already transforming costs and designing their organisations to do more with less. But, at what cost?

The UK Customer Satisfaction Index, which monitors consumer feedback across multiple sectors in B2C markets tracked steady growth in Satisfaction up until 2012, then it plateaued. The average peak being 78.2% Satisfaction. To July 2013 most organisations had seen a 1 point drop in their rating over the year. Now, there is a high end to the result range and there is a low end, but if we are looking at a cross section of the ecomony, the potential for 22% dissatisfaction is quite harrowing. As Service is delivered by your organisation and is not impacted by your Competitors, it’s like taking a pick axe and making your own holes in the ‘Bucket’.

The key linkage on satisfaction is whether a Customer will retain its relationship with you for the longer term and will they advocate (recommend) to buy from you next time. We can draw equal analogies for B2B markets, but if you are in these segments you may want to look at your own Satisfaction and Leakage results to see what the extent of the challenge might be in comparison.

So, let’s have a look at the case for Growth again, where all the hard-found monies will be spent in stimulating markets. You get all your employees excited for the extra push, but forget to secure the revenue base in your existing model. Growth will usually come at a discount on profit contribution. Your existing base would usually be richer in contribution. Add one final cost multiplier to the equation. Popular view across Marketers across the internet would suggest that the cost of a new Customer acquisition is 6-7 times that of retaining an existing Customer.

Growth is critical for economic recover and history will prove that we are great at innovating and communicating. However, this time let’s take a look at the whole end-to-end business model, define the changes and drive the whole organisation in one direction to deliver to the expectation of your customer offers.

Have a nice day.

About David Dugdale
Business Transformation Consultant

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