925-209-7002 info@predictive-insight.com
925-209-7002 info@predictive-insight.com
As an industry we are really very good at understanding the internal metrics that lead to a
well-run business and thus profitability. But what about the customer and their metrics…
what are the metrics for measuring our performance against the expectations of the
customer?
Look back on the big sales you recently lost. Do you know why? That big account that
slipped away last year, did anyone in your organization pickup on the signs of your
vulnerability?
When we were purely selling product the idea of alignment was simple. The customer
needs the product; we want to sell them ours. It was a transactional world. Today, however,
in a world of services such simplicity no longer applies. When we add to this an ultra-competitive
“Zero-Sum” environment and expectations which are continuously elevated by
other high performing suppliers, the margin for mistakes gets very slim.
Today we need to be more aligned with the business objectives of our customers, not just
our “statement of work”. The customer’s expectations are developed by levels of service and
communication from these other suppliers and by their own ever-evolving missions and
performance pressures.
I’m reminded of a time when I was visiting with the CFO of one of our largest customers.
They were a major organization with thousands of placements. We had a good relationship
for years and I had every reason to believe we were doing an exceptional job. So you can
imagine my surprise when the first comment out of his mouth was how dissatisfied he was
with our performance. It wasn’t the level of product reliability or service or the satisfaction
level of the departments using our product. He was upset because of our delivery times. Our
agreement called for delivery within 30 days and we were delivering in half that. Placements
were national and complicated to arrange. I thought with beating S.O.W. by 50% we were
doing a good job. However, he was not comparing us to our agreement, or even to our direct
competitors. He was comparing us to Dell Computer, and their legendary supply chain. He
could not understand why we could not equal their three-day delivery system.
To be candid I first felt it was an unfair comparison. I also felt that if I was delivering better
than promised it should be satisfactory, and I felt blind-sided by his concern on my
performance. I had not heard a word of this before our visit and here it was, clearly on the
top of his mind. Then it dawned on me that this was my fault. It had been over nine months
since I had been in to visit with him and talk about his priorities and newest objectives. I had
had monthly reviews with the Account Manager, but I had fallen behind on the executive
exchanges. What might surprise you is that this is the number one reason accounts become
more vulnerable. That’s right, communication is the highest area of account vulnerability.
It’s not price, or service. These things involved highly developed management processes.
Communications are often left to occur without any kind of strategic management structure
around them.
Account Forensics, an Atlanta based account diagnostic firm for many Fortune 500
companies has an extensive database of information formed from doing the forensics on
account health. Their most recent report on the trends in account management states the
following:
“Account support encompasses the total support from the service provider’s account team
to the buyer, including both executive and direct client-facing teams. However, data shows
that corporate teams took on a significantly pronounced role in causing client accounts to
shift from strong to vulnerable in 2014. When buyers mentioned account support as an area
of concern in 2014, 58% cited an insufficient level of corporate involvement from the
provider as the main reason for their disappointment.”
So what should we do? Obviously we need to take action. Here are some ideas:
Schedule senior executive client meetings and make these part of the account plan. Your
company’s senior executives should visit accounts at a frequency that is appropriate given
the client’s size, growth potential, and overall strategic importance.
It might make sense for multiple executives at your company to share the load. For example,
it may be advantageous for the vice president of sales to visit during one quarter and the
chief financial officer during another. This will not only broaden your company’s
involvement with the client, but by introducing different disciplines it may introduce
additional approaches to address issues and increase opportunities for performance
dialogues and sales.
It is difficult to proactively communicate ideas to your client if you don’t have a system to
store, organize, and share ideas. Many dealerships have invested in a CRM system to
accomplish this, but very few have really developed a process that ensures they are really
capturing the data that will help improve the relationship. If the CRM is simply something
the sales force is forced to use to track activity rather than a management tool to archive
customer knowledge, it will fail. Process, not software, is the key. By developing a system to
archive and share ideas with your client, both executive and sales teams are able to
systematically see which ideas have already been shared, as well as determine gaps so you
can proactively make recommendations which strengthen relationships.
Your client’s needs can be driven from many levels within the organization, and these may
be in areas where you are not routinely involved. It is important to understand all the direct
and indirect influences that are impacting the expectations of your customer.
Evolving to a services business does not mean simply engaging in IT services, or offering
MPS. It means a whole new way of interacting with customers. More and more clients are
focused on their core issues and competencies. They are expecting that you are
communicating, analyzing, and reporting issues and metrics that will help them reach their
goals. Helping them accomplish this is the only way we will reach ours.
Understanding the measure of our clients’ expectations is every bit as important as the
metrics we call benchmarks. In fact, if we are not aligned with the customer’s expectations,
then the internal metrics we spend so much time on are just meaningless numbers.
