Smart Innovation
Superb Customer Service is Smart Innovation
In this dialogue, Dr. Brian Balmer, program manager of Performance Materials
Research, Frost & Sullivan and Tom Cook, Asia Area Vice-President and
Greater China President, consider the critical elements of effective customer
service.
How do companies identify customer needs?
Tom Cook
Asia Area Vice-President,
Greater China President
| TC: You must look and listen to many different sources
to have an accurate assessment of customer needs. People typically think about
customer visits, interviews, satisfaction surveys, and focus groups when
identifying needs, but they can also come from complaints and everyday
interactions with customers. The most significant innovations sometimes come
from identifying needs that customers may not even understand they have until
presented with a solution. A deep understanding of customers’ business
challenges and what “keeps them awake at night” enables the identification of
these undiscovered needs. |
Brian Balmer
Frost
& Sullivan
| BB: I agree that some customers don't realize they have
a need until it is suggested to them. This is especially true for consumers in
markets such as personal care and home care. They don’t think they need a new
washing powder for their laundry until a better one is presented to them.
This is often a significant challenge in B2B environments. Many B2B
companies have been successful in identifying and responding to customer needs.
Dow Corning, like many companies, used to rely solely on developing
innovative products in the hope that they would sell. Today, because of a focus
on listening to the voice of the customer, they have expanded their offerings
to provide innovative solutions to address specific customer needs.
|
Q. What role does customer service play in
customer loyalty and future sales?
TC: Product companies often under estimate the impact of services in
their ability to differentiate products. As is inevitable in the product-market
life cycle, products become commoditized and less differentiated over time. As
a result, the service component of a company’s offering becomes a critical
differentiator, and if it is well matched with the relative customer needs,
significant loyalty and sustained, profitable sales growth can be achieved.
BB: I believe it really depends on the customer. Dow Corning is a
great example of a supplier that services a wide range of customers. At one end
of the scale, some customers just want to be supplied with commodity products
at the best possible price, with no value-added service. Dow Corning is
targeting this group of customers with its Xiameter® brand. Of course, there is
still an element of customer service involved – accurate pricing and reliable
delivery are still critical factors for these customers.
At the other end of the scale are customers who want more of the value-added
service, such as technical support, product development, process
troubleshooting, and so on. If a supplier can provide not only a product but
also help so that the customer uses the product effectively, this can be a
powerful tool in retaining that customer – it makes it a lot harder for them to
switch.
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Q. How does a company's organization impact its
customer service capabilities?
TC: A company’s organizational structure needs to reflect its
strategy in serving customers. I think about this from two primary
perspectives.
The first is a product lines organizational structure vs. a market oriented
structure. While a product line structure can help a company to understand and
service common needs from a product perspective, market oriented structures
provide broader opportunities for understanding and fulfilling customer needs,
thus building loyalty.
Whether the organization is local or global also needs to be taken into
account. Local structures tend to promote faster decisionmaking but can create
inconsistencies across local boundaries. Global structures can deliver
consistent solutions in a coordinated fashion but tend to be slower and
difficult to manage. In the end, an effective combination of structures yields
the best results.
BB: In many ways, customer needs should actually impact the
organizational structure. By listening to customer views and adjusting or
aligning the organization to align resources and targets with customer needs, a
company’s customer service capability drives the organization. Good customer
service translates into an organization that is very much in touch with
customers and thus ensures quality and reliability in order to meet, or even
exceed, customer expectations.
Moreover, customer service is a key priority in ensuring that a high level
of customer retention is maintained, which ensures greater profit for the
organization. For the organization to positively impact customer service, it
must listen to customers and ensure that it is responding to both local and
global customer voices.
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Q. How can companies strengthen the
effectiveness of employee/customer interactions?
TC: The effective segmentation of customer needs can help employees
to more easily recognize and respond appropriately to common requests or
requirements. Working to eliminate or automate activities that are less valued
by the customer and using that time to focus on more valued customer activities
can significantly strengthen employee-customer interactions. Each interaction
with a customer should be viewed as an opportunity to identify needs and live
your brand promise. Companies and employees have these “moments of truth”
everyday.
BB: It sounds simple, but for us, face-to-face contact really works.
At Frost & Sullivan, we’ve found that the more we meet our clients in
person, the more constructive information we can learn from them. There is a
limit to this, of course, as time is a valuable commodity for all of us these
days. Most importantly I think it’s important that companies truly listen to
what their customers are saying and respond quickly and appropriately.
Equally critical to the effectiveness of these interactions is the
preparedness of your employees. Know your customers – understand their markets,
understand their challenges, and have some thoughts on how you can help them
before you meet – don't just turn up with a blank slate. For more information
about Dow Corning, go to www.dowcorning.com. Frost
& Sullivan offers full customer research capabilities on a global scale.
For more information, visit www.frost.com/crs.
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About Dow Corning
Dow Corning Corporation provides performance-enhancing solutions to serve
the diverse needs of more than 25,000 customers worldwide. A global leader in
silicon-based technology and innovation, offering more than 7,000 products and
services, Dow Corning is equally owned by The Dow Chemical Company and
Corning, Incorporated. More than half of Dow Corning’s annual sales are
outside the United States.
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