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Where the Money Is (Jim Karrh On Marketing)

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“We are here because we are where the money is.”

Among the many comments I heard while participating in a client’s meeting recently, that was the most compelling. The company is a manufacturer with a dealer network across North America. This particular meeting brought together much of the corporate staff plus dealer executives and, importantly, parts and service managers.

This manufacturer is dealing with some trends and challenges that might ring true for you as well. Competition and commoditization have squeezed margins out of the hardware side of the business; it is increasingly difficult to make much money just from selling equipment. The more profitable side now comes from the aftermarket, through sales of services and replacement parts. That marketplace reality was the basis for a service manager’s “where the money is” statement, noting how important it was for him and his cohorts across the enterprise to get together and share best practices.

Along with a focus on aftermarket services came the realization that winning in service means excelling at the totality of a customer’s experience. This meeting was focused on both the big picture of customer experience (how to define and attack it) and immediate, practical steps that dealers could and should be taking.

These days, many organizations are trying to get their arms around customer experience (sometimes abbreviated as CX). As one example, Conway Regional Medical Center is moving forward with a multimillion-dollar renovation, in part because of the experience CEO Jim Lambert had there as a patient for a month in 2012 and the new insights he gained. Another major factor is new competition from Baptist Health Medical Center-Conway, now under construction.

One of the issues that holds up some CX initiatives is simply getting the definition straight. Customer experience is not, for example, the same as customer service, which typically describes specific behaviors that employees are to engage in, such as answering calls or emails within some specified time or resolving issues during the first service call. On occasion, companies can get sidetracked if they consider customer service too narrowly. I might receive efficient, pleasant service while at the dry cleaner or while picking up an order from a retail store, but I might have a better customer experience if I didn’t need to make that trip in the first place.

Nor is customer experience necessarily the same as customer satisfaction, which is a type of research or feedback metric, used because the organization believes it will help predict customer loyalty or attrition. Instead, CX is an all-encompassing look at what a customer sees, hears, thinks and feels across encounters with the organization — phone calls, face-to-face interactions, social media, the website, etc.

After some discussions with this manufacturer’s leadership team, we approached customer experience as a three-component cycle:

• Feedback. It is vital to gather and understand customers’ impressions in order to know what to do. Some dealers had sound data while others are just getting started. Your feedback might be qualitative — e.g., voice of the customer, or VOC — research, quantitative ratings or both. In any event, it’s important to be proactive and representative, gaining an understanding of all customer types and interactions, and not just waiting to learn how the company responds to questions or problems.

• People. These dealers are committed to knowing whether the associates who deal with customers have the wherewithal, knowledge and skills to deliver an excellent experience — and to do so consistently. There are big implications for recruiting, training and compensation.

• Process. We discussed many areas for potential process improvements, including the ways different units use customer data, when to offer self-service options and how new associates are on-boarded.

If you’re building or refining your approach to the customer experience, then I hope you find these three components a helpful place to begin. After all, that’s probably where the money is.

Jim Karrh of Little Rock is a consultant, trainer and speaker. Visit JimKarrh.com, email him at Jim@JimKarrh.com and follow him on Twitter @JimKarrh.

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