Current customer measures

Supplier organisations have two sorts of customers – external and internal:

  • External customers pay for the goods or services every private or public sector organisation offers them – it’s their money alone which keeps businesses in business and public services alive, and pays for every employee’s pay packet and shareholder’s dividend – it’s them who decide whether or not to buy or use products or services based on price, quality and service levels offered them
  • Internal customers are fellow-workers further ‘down-the-line’ who depend on you to supply them with raw materials, semi-finished goods or paperwork so they can complete their work – they want to be passed stuff which is ‘right-first-time, not faulty or late causing them extra work, delays, increased costs and much resentment

Given this importance, one would expect all organisations to closely monitor how satisfied their customers were with what they were being offered – but most do not know such important detail – they simply rely on measures of sales volume, value and trends plus their own internal views on how good they are (views which can be quite different to their customers’) – if they’re not negative, all things must be hunky dory – hence many are surprised when customers become ex-customers

To be fair:

  • Some conduct analyses of customer complaints, returns and warranty claims but efforts are usually half-hearted and little effort is put into making amends – hence they miss a golden opportunity to convert unhappy customers into repeat sales – worse, they suffer a double whammy as unhappy customers tell far more people about bad experiences than happy ones do, so extra potential sales are lost
  • Some conduct surveys of their customers’ satisfaction levels but do this badly – too infrequent or too often, even irritating customers – sample sizes and/ or methods unrepresentative or inadequate – so they rarely identify important areas where they’re going wrong
The upshot is most organisations have little idea how well they’re serving their customers
And, on top of this, most do not fully understand the nature of demand for their services – they assume all customer contact time is valuable and try to deal with it as best they can

But many, often most, contacts are repeat contacts made because customers’ queries were not answered ‘right first time’ – or services provided were flawed in some way requiring extra time to put things right e.g. patients who catch MRSA whilst recovering in hospital

Thus customers can suffer, sometimes badly – suppliers can suffer badly too – such repeat/ extra demand (called Failure Demand by Vanguard consultants) means suppliers can incur huge extra costs in wasted time of staff and equipment/ facilities for no extra income – indeed, over 50% of all demand on many suppliers can be wasted this way

These may be the days when suppliers all claim to put ‘customers first’ but what most actually do is look inwards, not outwards

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