Customer Relations

by Roisin Murray & Wallace Murray

Read the signposts!

Road signs are pretty good, aren’t they? You motor along, glancing at them and you know you are off-track if you start seeing signs for a town that should be in the opposite direction! Isn’t that a lot better than having to leave the motorway and find street names, or to ask a passing local where you are?

It’s the same with signposts at work, which are sometimes called ‘up-stream measures’.

Signposts to performance might show trends in things such as:

  • Frequency and value of orders and purchases from a given customer
  • How long people remain customers
  • Number of purchases resulting from recommendations
  • Number of complaints and compliments
  • Relative percentage of repeat business, new and closing accounts.

Be careful of the number of complaints, however. Remember that the way you deal with a complaint is more important than whether you received one in the first place. The number of complaints tells you little about how well you listen to customers, or about how loyal they are. A complaint is an opportunity to cement customer loyalty. If the number goes up, is it because you have made it easier for customers to give you feedback? Are they truly complaints? So if you do use complaints as a measure, be very clear what lies underneath the data.

Indicators of customer perception might relate to one of several factors:

Reputation

How easy is it to gain access to your products or services? How flexible are you in meeting others’ needs? How well do you communicate with customers? How proactive you are in seeking others’ views? How do you respond to feedback?

Quality

(According to customers...) How good is the value for money you offer? How reliable are you, your delivery, your service or products? Perhaps, how innovative do customers think you are? What do they think of your environmental performance?

Support

How good is your organisation when it comes to the technical or product knowledge of your staff, evidence of desired behaviour, complaints handling, response times, technical support calls and warranty claims?

Loyalty

How willing are customers are to buy the same things from you again? How willing are they to buy other things from you and how ready to recommend you to others?

Signposts are simple to understand. They tell you how far you have come, and you can make decisions based on the information they give. You do need to be aware of their limitations, however. Take the motorway signs. The distance shown gives you only a very vague clue about how long the journey will take. It’s the same with work measures. They will only ever give you part of the story. They are no substitute for actively listening to your customers, learning from them and pro-actively looking for things that you can make better.

Measure progress

You may already have a raft of performance targets, measures or indicators. Some quality gurus used to suggest that you should measure everything you can. If you do that, you soon can’t see the wood for the trees. To avoid drowning in a sea of data, measure only ‘mission critical’ things at each level – corporate and individual.

You may have agreed your measures or they may have been imposed on you. Perhaps you have even imposed some on others. It’s much better if measures are agreed. It is also much better if they tell you how you are progressing than just whether or not you have succeeded.

Targets tend to tell you whether you have arrived. They don’t tell you much about progress, but you can only progress towards excellent customer relations. You can never say you have arrived. Targets are therefore only useful as way-marks on the journey. A journey is a series of steps. In this case, those steps are the enablers of good customer relations. Enablers are those things that have to be in place to achieve the desired result. These include such things as management behaviour, staff attitude, empowerment, flexibility and responsibility. These enablers are the signposts on the journey towards excellent customer relations.

Monitor costs

In general, it is a good idea to monitor the costs of any business activity, and to compare them with the return on investment. However, not every activity fits neatly into a single category. Improving customer relations is rather like this. It may be difficult (and indeed fruitless) to identify and separate out all those costs. The question is: what can sensibly be separated out, and how easily can you attribute results to a particular cost.

For example, a change in procedures may be intended to benefit the customer. Is it sensible to attribute the cost of the change to customer relations? Equally, a certain restaurant in London asks all diners for their birth date and then sends them a birthday card each year. This is a clearly definable cost, and is part of the marketing budget. It may foster good relations with clients. Repeat business may be partly due to the card, but it will be mainly because the food is good and the customer had a good experience there.

The message is to monitor that which it is sensible to monitor, but only if you can do something with the information.

Have a look at the topic on Performance Management for further ideas.