The Customer Is Right - Results From A Typical Survey

Customer service can mean different things to various people, but the focus should always be the same—satisfy the customer. The paths taken to achieve this goal vary, and along the way the focus is often lost, resulting in unhappy customers. Many procedures are defined, sophisticated systems installed, and departments created to perform the customer service function. However, when you ask the question, “What does your customer really require?” you may get a number of different answers. As relationships between the customer and supplier evolve, they settle into acceptable, not desired, performance levels. This acceptable performance becomes viewed as the customer’s true requirements. This may be acceptable for the short term, but if a new supplier arrives who can actually meet the true requirements of the customer, the business may be at risk.

Losing sight of the customer’s requirements is one common shortcoming of Customer Service Departments. Another common shortcoming is not tracking the levels of service provided to customers. This makes it difficult to understand whether or not the customer’s requirements are actually being met. In addition, measured fluctuations in service can alert an organization to shortcomings in their internal processes. By tracking service performance internally, any necessary corrections can be made proactively before they become major issues with the customers. Losing sight of your customer’s requirements and your own actual service performance can affect your business in many ways.

Case Study

A rapidly growing candy manufacturer felt they had a solid understanding of the service levels required by their customers. They wanted to perform a customer survey to confirm the needs of their customers, and more importantly, to determine how their service performance compared to the competition’s.

A telephone survey was established to account for a significant portion of the company’s sales, while still covering customers of various sizes, across different market channels. Most customer sales were through brokers, so both customers and brokers were contacted for their perceptions of the company’s service. A survey instrument was created which was used as a guide during the telephone conversations. The proper mix of quantifiable questions were mixed with qualitative, open-ended questions to provide insight into many of the statistics that were tabulated.

When the survey was completed, over a hundred interviews were conducted, accounting for roughly 40 percent of the company’s annual sales volume. As is often the case, there were some surprises when the results of the customer interviews were presented to management.

Before the survey, the company perceived required lead-times to be approximately two weeks. As it turned out, the customer base had learned to accept the lead-times being provided, but many desired lead-times closer to one week. The issue became more critical for grocery buyers, whose job performance was judged on the rate of sale compared to inventory turns. What made this discovery even more agitating was that the company could have easily provided a one-week service. Several improvements gave them the ability to provide the quicker service, but the company never acted on this capability. The company assumed the customers did not require the quicker lead-times! As it turned out, the company’s sales force did not understand the delivery capabilities of the company, so they were not presenting this capability to customers. The customer base, in turn, accepted the two-week service, but considered the company to be inferior to the competition. The problem was not with the service capability, but with the perception of their capability, both internally and externally, and a lack of coordination and communication.

Another significant discovery resulted when the company challenged the fill rates, on-time deliveries, shipping accuracy, and lead-times reported in the survey. In each case, the customer rated the company’s service lower than the competition’s. Management disputed the customers’ reported levels of their service, feeling that their numbers were not accurate. However, when pressed on what the true service levels were, no information was available, because none of the service measures were tracked. There was no way to definitively prove whether the customers’ perceptions were correct. The company could be providing superior service, but as long as the customers did not perceive it as so, the end goal—satisfied customers—would not be met.

As a result, the company undertook two primary tasks upon completion of the survey. The first task was to clearly communicate the company’s service capabilities to their own personnel, so that they could then present these capabilities to the customers. Service could be differentiated, providing the superior service to the customers that required it. The second task was to begin a customer service measurement program that would track the service measures that their customers felt were important, as well as those measures they felt were important internally. The company could depict the service they were providing with facts and figures, identifying the real problem areas and working on improvements.

The results of this survey were a mild surprise for this client. The survey provided the company with direction for both the short term and the long term, as it planned to compete with other candy manufacturers. For many companies, the results of a survey turn out to be more than just a mild surprise. In some instances, companies are aware that there may be a problem, but are not aware of how severe that problem may actually be, and what measures are necessary to correct it.