In the midst of challenging economic times, Bahamas Chamber of Commerce President Raymond Winder underscored the importance sustaining a business through effective customer service.
He observed that even in times of economic strength, the odds against winning the “growth game” are considerable and getting worse.
According to Mr. Winder, this is happening because the country is in the middle of a profound revolution bigger than anything yet seen. And, that today’s society is moving from a post-industrial economy to the information age.
This change, he said, has resulted in customers taking control over the destiny of businesses. They have taken control of industries and are entirely reshaping them.
He was addressing a recent CEO Network Conference on “The Business of Doing Business – The Service Strategy”.
Mr. Winder told his audience that at one time, all service transactions were conducted between customers who purchased goods and services from people they knew, or from those who offered unique, personalised products and services and who received repeat business as a result of their quality and individualised approach.
He said over time, industrialisation changed that paradigm. While some characterised the change taking place as the new economy, they Internet economy, or the knowledge economy, Patricia Seybold, author of ‘Customers.com’, calls it the customer economy.
“There is considerable debate as to what is your business’ most valuable asset,” Mr. Winder said. He then asked: “Is it your investment capital, the products or services you offer, your employees, your brand or your customer relationships?”
He told his audience that their most important asset is their customer relationships. And cited three principles that demonstrate the shift to the customer economy; customers are in control, customer relationship counts, and customer experience matters.
On customers are on control, Mr. Winder said that personal computers, fax machines, cell phones and the Internet have made it easier for customers to control and reshape the strategies of companies.
“As a business manager or owner, you must respond to changing circumstances and more importantly, customer expectations in the smallest possible lapse of time.” he said. “Customers expect immediate satisfaction no matter what they are buying or they will choose to buy from your competitor.”
Turning to customer relations count, Mr. Winder noted that in the digital world the market value of a business is directly proportioned to the value of customers.
“The make this calculation, you will have to make an assumption on how much it will cost to acquire a new customer, what the average profit will be for each customer, and what the likely retention rate is for each customer,” he said. “What investors really care about is the value of your customer base, or in other words, the value of your relationship with current and potential customers.”
On customer experience matters, Mr. Winder told his audience that in customer relationship, it is important for them to differentiate between relationship business in which the customer knows the service provider and interacts with the same person continually, and encounter business in which the customer may know the company but receives services from whom ever is available.
He advised that if they are going to create value through customer experience, they needed to be able to distinguish between relationship businesses and encounter business.
The difference between the two:
1 – Relationship providers can have only as many customers as they can service and in busy times, they must work harder. A self-employed accountant, restaurant owner, or local grocer can only accept as much as business as he or she can handle.
2 – Relationship providers are generally satisfied with their work and earn more money than encounter providers for example, the cashier at McDonalds vs. a lawyer in a legal firm who specialises in mergers and acquisitions.
3 – Encounter businesses require a lot of money to get started and must have good management to succeed. In encounter business, managers play four roles in the delivery system: design, implement, enforce and alter the delivery system.
4 – Encounter businesses must have well designed process for providing services and customer feedback. The customer experience at McDonalds in Chicago should be the same as it in Hong Kong.
According to Mr. Winder, in order to continually create customer value and improve the customer experience, one must do the following: create a compelling brand experience; deliver a seamless experience; demonstrate to customers how much you care; measure what matters to customers; value customer time; and develop a customer relationship.
“It is clear that customers today, aided by technology and the Internet have much more power and influence than ever before.” Mr. Winder concluded. “Those businesses that design their operations around their customers will be the ultimate winners in the future.”
By Lisa Albury, The Nassau Guardian
