The market value of customer feedback
Turn customer feedback into services with a competitive advantage
Published: December 1, 2005
By Carol Weiszmann
Only U.S. manufacturers with a knack for invention will grow and thrive in a global economy where offshore rivals—and domestic companies with significant offshore components—spend up to 75-percent less on labor than do businesses with production based on American soil. Opportunities to innovate, however, are tough to identify and take advantage of under the best of circumstances.
"Our experience and research show that small and midsize manufacturers are consistently outmanaged" by larger companies, says John Brandt, chief executive officer (CEO) of the Manufacturing Performance Institute in Shaker Heights, Ohio, which provides strategic consulting to manufacturers. True, the management gap often relates to the fact that bigger companies can better afford the expense. But Brandt insists that there are basic best practices that companies of any size can deploy to improve manufacturing, design, fulfillment, and other key processes that can benefit from innovation. "Small and midsize manufacturers that ignore this, excusing their ignorance or apathy by complaining about a lack of resources or unfair competition, are consigning themselves to be forever small and struggling," he says. "These manufacturers must find creative ways to compete."
One of the best ways to do that is by connecting with customers more effectively.
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Begin with customer service
Certainly, part of connectivity involves changing customer service skills for businesses, and processes, to produce insights that support continuous—and sometimes even disruptive—innovation. This involves several kinds of efforts, including:
| • | Changing corporate culture from the traditional (and now competitively dangerous) approach of "build it, and they will come" to one of "walking in the customer's shoes"—that is, figuring out what customers want, then delivering it |
| • | Developing new kinds of business processes and customer service skills for businesses |
| • | Deploying/integrating technologies that enable these processes |
"The challenge, from a customer service standpoint, is to get people properly trained," says Jonathan Copulsky, managing principal for the customer and channel strategy practice at Deloitte Consulting LLP in New York City. "[Customer service employees] must be armed with the right questions and be able to classify problems and identify patterns." And, he notes, there must be a mechanism to ensure a free flow of information back to those responsible for coming up with solutions, such as product developers and customer service managers.
Leverage customer service in innovation
Copulsky identifies five best practices for obtaining that critical information through your customer service skills for businesses operations:
| • | Implement a formal process for collaboration. Put people responsible for product development in regular face-to-face debriefings with people from customer service. "This is one of the most effective best practices I've seen. Reading reports just isn't the same thing," Copulsky says. "And organizations of any size can do this. It's not cost-prohibitive." |
| • | Spend time in your customer service center. "There's no substitute for this," Copulsky says. "When I ran a customer service organization, I had my product managers spend a day on the phone once a quarter." He believes that managers benefit from watching and listening as reps interact with customers. |
| • | Provide clear goals for customer service. Make sure reps know what kind of information you want to capture—specifically, insights and patterns. "Once you have customers on the line, ask them more-detailed questions about what they're actually trying to accomplish," Copulsky explains. "This lets you understand their needs and how there may be some gap between their needs and what you deliver. |
| • | Compensate good ideas. Some companies reward employees for ideas coming through customer service that result in new products or services. |
| • | Classify your customer service calls. Periodically analyze calls for patterns, such as complaints about a particular part failing or problems caused by inadequate documentation. Identifying patterns is key to spotting opportunities for innovation and change. |
Extend the effort
Ultimately, improving customer connectivity is everyone's job, requiring processes and technologies beyond those used in your customer service department. Brandt suggests that you:
| • | Know thy customers. Manufacturers need to take every opportunity to be with customers, striving for consistent contact with their employees at every level. You might, for instance, drop by a customer location for a cup of coffee with the loading-dock foreman. Says Brandt: "There's nothing more effective or rewarding than using empowerment strategies and technology to put frontline workers in charge of customer delight." |
| • | Reexamine your customer and value propositions. Perhaps your offerings need to be bundled with other products and services. "Those who offer broader value packages, including service, information, and management expertise, significantly outgrow and outperform their peers," says Brandt. Begin by answering these questions: Do your customers really want products from you? Or do they want comprehensive bundles of service and product, of which your product may be just a small part? |
| • | Make information management a core part of your value proposition. Then implement the technologies required to show customers that you take their information needs seriously. |
Manufacturers that are doing it now
Consider Graniterock Co., of Watsonville, Calif., a cement and asphalt company that generates 30 percent more revenue per employee than the national average. Graniterock, a winner of the prestigious Malcolm Baldrige National Quality Award as well as several quality- and excellence-related awards from national trade associations, specializes in high-quality materials and strong customer service—and charges for both. The company's short-pay policy, which appears on all its invoices, tells customers that if they're not totally satisfied, they needn't pay for whatever they found unsatisfactory. This policy has had a powerful impact on Graniterock's corporate culture: When invoices go unpaid, the responsible employees are motivated to discover the root problem, solve it, and create processes that prevent it from happening again.
Then there's Cleveland, Tennessee-based Olin Chlor-Alkali Products, which produces chlorine and caustic soda. The organization, a division of alloy and ammunition manufacturer Olin Corp., adopted technologies that improved its connection to customers—and, in so doing, boosted customer satisfaction. Its approach includes:
| • | A customer service Web site where customers can easily access order-related information such as analysis certificates and track orders and shipments. As a result, customers are happier and salespeople are more productive. |
| • | Direct enterprise resource planning (ERP)-to-ERP connections, which link the division with its major customers. This "virtual pipeline" offers key accounts enhanced service and ease of use, which in turn increases customer lock-in. |
Granted, obtaining and analyzing customer feedback takes short-term investment and work, but the resulting innovations and improved competitiveness make it well worth the effort in the long run.
