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Posted: March 31, 2009

The magic of improved customer service: It will boost sales

Customer service is a differentiator you can use to win and secure clients

Larry Turner

We have seen some improvement in the stock market over the past couple of weeks, which gives us hope that the economy is about ready to bounce back. We still have a number of months of slow economy ahead of us, which gives you the ability to differentiate yourself from your competitors, take some market share and emerge a much stronger company once things start to improve. Customer service is an area that is easy to cut during difficult times but can also provide a differentiator from your competitors. 

Many companies will cut customer service levels during difficult times to a minimum or just below minimum acceptable level to save money, but this opens a door for you to have your company stand out. Strong service delivery and customer service are opportunities to win more business from current customers and can be used as sales tools to steal customers from your competitors. 

The situation

A few years ago I accepted the position of president of an IT services business that provided on-site service for many of the large IT outsource and computer hardware companies. On my third day in this position, I attended a business review with our largest customer, Dell.  During that meeting I heard that my business was:

1.) “Worst of Breed” in every category – Dell stack ranked their service providers in six different areas, and this business was the worst in all six areas.
2.) Lagging customer satisfaction – The business not only had the worst customer service ratings, but our ratings were bringing down the overall customer service scores.
3.) Negatively impacting Dell management bonuses – This was the kicker; not only were we bad, but we were hitting the Dell management in their pocket book!

Not the most up-beat meeting I have ever been to, but the Dell management was willing to give us a chance to improve our service. 

The actions

There was a lot of activity that went into our transformation, but the following are the areas that I feel were the basis of the business improvement:

• Changed the focus of the business unit – A shift from running as many service calls as possible to a main focus on customer satisfaction along with optimizing their time.
• Communicated expectations – In the past, clear expectations were not communicated to all levels of employees. Working with my field delivery leaders, we made it very clear to all levels in the organization what was expected in their daily work and how we expected them to operate.
• Held employees accountable for meeting expectations – While there may have been some expectations in the past, there was never anyone being held accountable for their actions and operation. This was one of the keys in changing the culture in the organization. The front line employees and all levels of management knew what was expected from them and how we would measure their results.
• Work with underperforming employees to improve or move them out – There were many employees that showed huge improvement in their activities, but there were some that did not/could not meet expectations. These employees ended up leaving the company on their own or with our help.

The benefit

It was a lot of work, but what was the benefit to our company?  When I got to the business, Dell was in the process of pulling business from my company, which represented about 40 percent of our revenues and 60 percent of our activities. It would have shut the business down. 

We ultimately turned the situation around. Four months later, during the next quarterly business review we had moved to number two overall and “Best of Breed” in four of six categories. Fifteen months later, the business won Service Provider of the Year award.

The turnaround in service delivery was critical in our company securing more business. In the months that followed the quarterly business review, our company was awarded business in two growing business units at Dell. This new business was critical to our strategic direction in moving into higher level services and provided revenue growth with strong margins.

Lessons learned

The story outlines a company with poor service delivery and customer service. Your business may not be in a situation where your clients are leaving you, but maybe a competitor has cut their costs too deep and is experiencing problems.  Customer service can be a differentiator that your sales organization can use to steal clients from your competitor and secure your own customer base.

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Larry Turner is CEO of Roundhouse Advisors, Inc. and has over 25 years experience growing, starting up, repositioning, and revitalizing organizations.  Roundhouse Advisors is a consulting practice focused on helping businesses increase enterprise value by managing pain, growth and owner exits.  Larry is a consultant, public speaker, and the author of “Owner Exit Planning: Leave On Your Own Terms." For additional information visit www.RoundhouseAdvisors.com

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