Book Recommendation by CCI President Craig Bailey
Want your company or
organization to evolve from good to great? If so, then the book
Good to Great by Jim Collins is a must read. It is based on a
5-year study of a set of elite companies that made the leap from good to
great results and sustained those results for at least fifteen years. This
book provides a clear analysis of why some companies make the leap and
While overflowing with in-depth content, I took away 3 key themes:
1) The importance of getting the right people on the bus, the wrong people
off the bus and making sure that those on the bus are in the right seat.
To "make the leap" you must confront the reality that the right people are
required to go from "Good to Great."
2) Simplify by getting focused. To do so, it is important to answer the
following three questions:
- What are you deeply passionate about?
- What drives your economic engine?
- What can you be the best in the world at?
With these questions answered, you will want to focus on the intersection
of the three circles, known as the "hedgehog concept." Sound intriguing?
Well, I won't tell you how the lowly hedgehog fits in, but clearly
answering these questions will create simplicity and a laser-beam focus
for your organization.
3) The role of technology – In this age, companies too frequently view
technology as the answer. Not so with Good to Great companies. Instead,
these firms leverage technology as an accelerator of momentum (that
already exists), NOT the creator of it. More specifically, the great
companies within this study leverage technology that links directly into
the 3 intersecting circles of the hedgehog concept.
As commented by Jim Collins, "Some of the key concepts discerned in the
study fly in the face of our modern business culture and will, quite
frankly, upset some people." So, the key question is - can you afford to
ignore these findings?
The items outlined above are what I took away. With the depth of research
and findings provided I'm convinced that you will identify your own set of
key themes that will make a difference in transforming your company from "Good
Culling the Customer Herd
It certainly isn't
news that in a typical B2B relationship, each entity involved is trying to
maximize revenue. However, a seemingly obvious business basic is often
lost in translation between Finance and Service Delivery: customer
relationships which do not cover costs cannot be made up in volume. If you
find a customer relationship is not covering costs, what can you do? It's
simple: fix it or drop it.
Defining Relationship Costs
A key to determining your course of action is clearly defining the cost of
the relationship. To be truly effective, this must involve more than
simply spreading costs of operation evenly among customers. Customer
CCI Newsletter #22) can be a vital first step. Part of segmentation
activity involves applying direct support costs, such as number of
situations (e.g. tickets in a given period) and cost per situation (e.g.
cost to resolve each ticket) against revenue during the same period. Keep
in mind other less obvious inputs, such as cost of escalation, toll on
staff (e.g. a historically volatile customer), etc. In the end, you need
to be able to answer the question: "Is the effort I'm spending on this
particular customer relationship worth it?"
Deep Breath Moment
Answering these types of questions isn't comfortable. In fact, often the
same data will produce different answers from various parties with
different levels of vested interest. For example, if, as a Service
Delivery Professional, you conclude that a certain customer relationship
is 'not worth it', look for Sales to disagree. Further, be prepared to
include into your findings information which becomes available only
after you propose taking action; be prepared to restate your opinion
based upon new findings.
Course of Action
Upon concluding a relationship is not worth it, there are only two
essential courses of action available to the serious, profit-driven
Try to fix the relationship.
This course of action requires a complete end-to-end understanding of
what will 'fix' the relationship, a related timeline and expected
result. It will also require being in a position to walk away (i.e.
acting upon a 90 day cancellation clause).
Drop the customer.
As harsh as it sounds, simply dropping a relationship which is deemed
'not worth it' can be extremely liberating. From staff morale (no more
2am dress down sessions) to freeing up resources (reapply or save
costs), the bottom line is the needs of this customer would be better
served by one of your competitors! One idea: list your competitors'
contact information in the 90 day cancellation notification letter!
either course of action, expect to deal with everything from anger to
understanding; customers who are truly interested in a winning
relationship understand the need for mutual success.
Culling the herd is an aggressive and bold approach to addressing Customer
Relationships. Taking focus off of unprofitable (culled) customers enables
you to better focus on the profitable customers. Unless you are confident
that all of your customers are worth keeping, it is a worthy exercise to
analyze "that one customer" you are thinking about right now.
Becoming Customer Centric - Analyze Information
by Craig Bailey
We start this
edition with a graphic representation of what we have covered so far in
the Voice of the Customer process - "Obtaining the Pulse of the Customer."
Once your company
has collected customer-related input and feedback in various forms from
various sources and validated this input against customer perception, how
do you leverage this invaluable information? The first step is analysis,
of two kinds:
Analyze customer feedback and information gathered
Analyze against other information held by the firm
Analyzing customer feedback involves reviewing both the qualitative and
quantitative information gathered to identify:
Positive trends (what is working?)
Troublesome trends (what needs attention?)
Themes being heard from the customer
Analyzing against other information held by the firm involves evaluating
customer feedback against:
Transactional history (inquiries, orders, service
requests, web-site usage, etc.)
the analysis process unfolds, the observations (themes, learnings, issues,
etc.) should be logically categorized so that the firm can make best use
of this information. Typically, the general categorizations coincide with
the functional areas involved in the program, including:
Training and Education
Service and Support
A common outcome
of this step is a defined customer segmentation strategy. It may be
determined that customers with certain characteristics (demographics,
purchasing behavior, etc.) are more satisfied, have longer relationships
with the firm, or purchase larger quantities and a more diverse set of
products/services than others. Customer segmentation is an effective
approach to support the subsequent steps of defining action-plans to
respond to results.
It is suggested that a centralized function or single person (depending on
the size of the firm) perform the information aggregation and top-level
analysis in support of the organization's performance of the next steps
that we will cover in the VoC process.
If you'd like to review an outline of the complete VoC program, feel free
to download the
presentation recently delivered to PDMA's VoC conference.
View previous articles in this series.
+ Culling the Customer Herd
+ Becoming Customer Centric
+ Recommended Reading
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This issue's recommended reading is CRM Magazine article
Blending Strategy and Information, by Jonathan Becher. We all know the
importance of data. However, in designing and implementing a CRM system,
analysis of data can be misleading. Instead, according to Mr. Becher,
organizations should start with overarching business goals, and build from
About Customer Centricity, Inc.
We strengthen overall company performance through
better service delivery and management.
We boost efficiencies in front-line customer service and technical support
teams, order processing, fulfillment, field service, logistics and other
key operations functions.
In short, we align the resources of your organization to exceed your
customers' expectations in the most effective and efficient manner
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