Handling Challenging Situations

Challenging situations are critical moments during which customers can be satisfied or lost forever. When you handle dissatisfied customers well, you help retain business and customer goodwill; a successful recovery can even help build customer loyalty. It is important to be focused, personable, and sincere. Keep in mind that a customer’s strong language or angry words are not intended as a personal attack.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Improving Quality

Improving quality is a lot like taking vitamins, eating healthy foods, and exercising regularly. Although the results may not be immediate, long-term benefits are significant. Quality is neither a quick fix nor the program of the month, but rather a way of life for companies who are serious about improvements.

Quality is a fundamental to creating value, yet it is a moving target and must meet the customers’ current definition of quality. Thus, we offer the following recommendations for improving service quality and ultimately delivering superior customer value:

• Design services in cooperation with customers. Learn what customers truly value by incorporating the voice of the customer earlier in the service development process. Also, it is important to determine not only the customers’ preferred service attributes but their relative importance, as well.
• Focus your improvement programs outward, on market break points. Only by defining those episodes, when the customer comes in contact with the organization, and by focusing on the ones most critical can you see things as the customer sees them. Also, visualize the complete sequence of the moments of truth a customer experiences in having some need met. Remember, the customer sees service in terms of a total experience, not an isolated set of activities. Mapping the service cycle helps companies see these activities as the customer sees them.
• Create a triangle representation of service quality. Hotels and restaurants often advertise and display on their properties ratings by one of the major motor clubs, such as AAA or Mobil Oil, Hertz #1 Gold Club service communicates a premium, value-added bundle of services to business travelers seeking a hassle-free car rental experience.
• Use teamwork to promote service excellence—service workers who support one another and achieve together can avoid service burnout.
• Create a service bias based on each of the following service quality determinants: professionalism, attitudes and behaviors, accessibility and flexibility, reliability and trustworthiness, service recovery, and reputation and credibility. These criteria can be used as guidelines for influencing positive service quality perceptions.
• Develop proper measurements. Use metrics that are specific on nature, such as 95% on-time-delivery, customer wait time, or order processing time. Benchmark the best practices for each service are being measured, such as wait time or order delivery.
• Employee selection, job design, and training are absolutely crucial to building customer satisfaction and service quality. Structure the job of service workers to maximize their ability to respond quickly and competently to customer needs. Also, train service personnel in areas of service delivery and attitude. Role play different service scenarios, showing various service recovery strategies. Provide service workers with some basic tools to help control service quality variation and uncover service problems.
• Reward total quality efforts in marketing. Look for opportunities to reinforce quality behaviors when they occur. Employees should be rewarded ob the basis of these behaviors (commitment, effort) rather than strictly on outcomes, such as sales quotas. Rewarding a salesperson for meeting or exceeding quota with a bonus while giving a nominal award such as a pin or plaque to the person who fixes the product or process sends a clear message about the importance of quality.
• Think of service as a process, not a series of functions. Service quality occurs when the entire service experience is managed and the organization is aligned to respond accordingly.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Service Quality and Employee Behavior

Customers’ perceptions of service quality will be impacted by the customer-oriented behaviors of employees. In fact, the five dimensions of service quality—reliability, responsiveness, assurance, empathy, and tangibles—can be influenced directly by service employees.

Delivering the service as promised—reliability—is often totally within the control of front-line employees. Even in the case of automated services—such as ATMs, automated ticketing machines, or self-serve and pay gasoline pumps—behind the scenes employees are critical for making sure all of the systems are working properly. When services fail or errors are made, employees are essential for setting things right and using their judgment to determine the best course of action for service recovery.

Front-line employees directly influence customer perceptions of responsiveness through their personal willingness to help and their promptness in serving customers. Consider the range of responses you receive from different retail store clerks when you need help finding a particular item of clothing. One employee may ignore your presence, whereas another offers to help you search and calls other stores to locate the item. One may help you immediately and efficiently, whereas another may move slowly in accommodating even the simplest request.

The assurance dimension of service quality is highly dependent on employees’ ability to communicate their credibility and to inspire trust and confidence. The reputation of the organization will help, but in the end, individual employees with whom the customer interacts confirm and build trust in the organization or detract from its reputation and ultimately destroy trust. For startup or relatively unknown organizations, credibility, trust, and confidence will be tied totally to employee actions.

It is difficult to imagine how an organization would deliver “caring, individualized attention” to customers independent of its employees. Empathy implies that employees will pay attention, listen, adapt, and be flexible in delivering what individual customers need. For example, research documents that when employees are customer-oriented, have good rapport with customers, and exhibit perceptive and attentive listening skills, customers will evaluate the service more highly and be more likely to return. Employee appearance and dress are important aspects of the tangibles dimension of quality, along with many other factors that are independent of service employees (the service facility, décor, brochures, signage, and so on).

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Customer Value Checklist

1. Does your company do a good job of listening to its customers? Give a specific example of how listening resulted in improved service quality to your customers?
2. Reliability is the ability of the company to perform the promised services dependably and accurately. On a 10-point scale, where 1 is unreliable and 10 perfectly reliable, where would you place your company and why?
3. How well does your company perform the “service basics”—that is, knowing and responding to the fundamental service expectations in your industry?
4. How effectively does your company manage the service design elements or systems, people, and the physical environment? Provide an example of how a lack of planning in one of these areas resulted in a “fail point” during a customer encounter.
5. Service recovery refers to how effectively companies respond to service failures. Cite an example of when a service failure occurred in your company and how it was handled.
6. Teamwork is an important dynamic in sustaining service workers’ motivation to serve and in minimizing service-performance shortfalls. Rate your company on its ability to foster teamwork on a scale of 1 to 10, where 1 indicates the absence of teamwork and 10 indicates maximum teamwork. How would you improve teamwork if you rated your company low on this attribute?
7. Internal service is crucial to service improvement, as customer satisfaction often mirrors employee satisfaction. To what extent does your company assess internal service quality (i.e., asking employees about the adequacy of systems to support the service, how the systems interact and serve one another, and where service failures are occurring)? Give examples of how internal service might be measured in your company.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

Facing the Harsh Facts

Many companies that have lost profits or market share have managers who are still waiting patiently for their business to “get back to normal.” Others are looking for government help for their declining market and profit positions. Neither of these approaches is a viable situation. What is needed is less wishful thinking and rhetoric and greater willingness to squarely face the true facts about their markets and competitive positions. The demand changes that have occurred in many markets are structural, not cyclical, and it is unrealistic to expect any kind of a dramatic recovery or turnaround that will restore demand to former levels.

It is extremely difficult for managers who have built their entire careers around specific products and technology to accept the fact that their former business base has now leveled out from prior peaks, or worse yet, become obsolete or irretrievably lost to new competitors or technology. Obviously, many old-line steel managers could not imagine today’s world of aluminum cans, plastic auto parts and bodies, or Japanese, Korean, and small regional producers who constantly “beat their pants off.” Nor could managers in the high flying semiconductor business foresee the situation where their markets have not only ceased to gallop ahead, but decline dramatically, and where foreign sources, including Brazil, Korea, and Taiwan, have captured the bulk of the remaining business. Unfortunately, these are the facts, and an equally discouraging set of forces applies in many other markets.

It is understandable that managers who have grown up and lived through the growth years in any of these industries find today’s conditions difficult to accept. But they must change their myopic or unrealistic views of their business so they can tackle the hard work required to regain a profitable competitive footing. Otherwise, their situations will not improve and will most likely deteriorate further.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Staying Close to Customers

• Show them that you think of them. Send or fax helpful newspaper clippings, relevant articles, and greeting and birthday cards. How about sending a card on the anniversary of the day they became your customers?
• Tell them what’s new. It is a good way to stay in touch and increase sales or get referrals.
• Offer “valued customer” discounts. These can take the form of coupons, letters, or other sales promotions. This not only garners more orders; it also makes your customers happy to be getting such good deals.
• Compensate customers for lost time or money if they were caused by problems with your product or service. Use a well thought-out recovery program and stick to it. Better to err on the side of generosity than lose an account out of stinginess!
• Be personal. Keep notes in your customer files on every little detail you know—everything from spouse and children’s names to hobbies, and especially their behavioral style.
• Always be honest. Nothing undermines your credibility more severely than dishonesty. Lies have a way of coming back to haunt you.
• Accept returns unconditionally. The few bucks you might lose in the short run are far less than what you gain from pleasing the customer.
• Honor your customer’s privacy. If you have been a truly consultative salesperson, you may possess some knowledge that should be kept confidential. Your ethical standards should demand that you keep it that way.
• Keep your promises. Never, ever promise something that you cannot deliver. This principle applies to little things such as returning phone calls as well as big things like delivery dates. If you must, ‘baby-sit’ deliveries and promised service to see that they are realized. Your reputation is on the line.
• Give feedback on referrals. This is the right way to show your appreciation for the referral. Tell your customer the outcome. This is also a good way to get more referrals without asking for them directly.
• Make your customers famous … for 15 minutes. If your enterprise has a newsletter, ask customers for permission to write about their success. Then send a copy to your customer. The same can be done for local newspapers and other publications.
• Keep lines of communication open. As in any relationship, assure your customers that you are open to all calls about everything and anything – ideas, grievance, advice, praise, questions etc. This is one ay to maintain that all-important rapport.

 Remember that people do business with people they like!

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Key Organizational Processes

A process is a specific group of activities that is of value. Business process design involves the identification and sequencing of work activities, tasks, resources, decisions, and responsibilities across time and place, with a beginning and an end, along with clearly identified inputs and outputs. Processes must be able to be tracked as well, using cost, time, output quality, and satisfaction measurements. Businesses need to monitor, review, alter, and streamline processes continually in order to remain competitive. A process view of the organization differs from the traditional functional view.

Processes are not simply obscure, back-room operations of the service concern, but instead are an integral part of delivering the value proposition. We maintain that processes and service are inseparable; that is, the process is the service. An effective process is results driven, deriving its form from customer requirements—how and when customers want to do business with you. Market-oriented companies ensure that the service encounter is positive by asking, “How can we make our customers’ lives easier?”Managers must first take a “big picture” view of their company by looking at key processes in relationship to the marketing cycle.

Various market constituents such as customers, suppliers, and publics determine the how and the extent to which marketing cycle elements are performed. Customers in particular determine the competition and nature of the marketing cycle and the subsequent core processes that are required to support these selected marketing cycle functions. For example, the customer service process is performed as part of the service management function of the marketing cycle. Customer service activities would include, but are not limited to, such activities as tracking and trending customer complaints, recovery from customer service failures, and establishing customer service standards. The process indicators represent the “metrics” for measuring the core processes. One of the process indicators for the customer service process is guaging customer satisfaction levels.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Company Performance Appraisal

Company performance appraisal studies the trends of specific profitability and productivity ratios derived from financial statements for at least past three  periods (year, quarter, month). Its main purpose is to diagnose problem areas through establishing productivity indicators for continuous monitoring and control of the whole enterprise, in order to set up an appropriate productivity improvement programs.

 

In conducting company performance appraisal, two basic comparisons have to be made:

a.       Between current performance and a historical base performance;

b.       Between actual performance and the target.

 

The former indicates whether performance is improving or declining and at what rate. The latter requires that performance or productivity targets be set and matched against actual performance.

 

Using profitability along as the basis for evaluating the overall performance of an organization makes it difficult to identify the cause of profitability changes. Are they due to productivity or price-cost movement? The following demonstrates this relationship:

 

            Output value     =          Quantity sold     X          Unit price

 

 

             Profitability       =          Productivity       X          Price recovery

 

 

             Input value        =          Quantity used    X          Unit cost

 

Considering the relationships over time, profitability is defined as charge in output value compared with change in input value; productivity as the change between quantity of output and/or quantity in unit price, and change in unit cost.

 

In effect, what is computed are performance ratios classified into:

• Change in profitability;
• Change in productivity;
• Change in price recovery.

 These performance ratios are then evaluated in relation to their effect on profits. In general, a drop in profitability, in productivity or in price recovery reduces profits. Lower productivity signals a need for further analysis and for correction action. However, increased productivity does not necessarily lead to profitability on a short-term basis. The effect of increased productivity will be realized only in terms of long-term profitability.

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight

Recovery of Loss-making Companies

A surprising number of large companies have one or more subsidiaries making losses at any time. The number of private companies which fail is further ample proof of loss-making businesses. One response is a desire to sell the loss-making business, which is really an attempt to walk away from a situation which is both a problem and an opportunity. Even if a buyer is found, the purchase price is likely to be lower than net asset value. If loss-making business is sold to the existing management interesting questions are raised. What will they do as owners of the business different from before? Why was this not done at the direction of the group previously? The opportunity is to turn the business into profit before considering selling it, because even if a sale makes sense, it will be easier to achieve and a much higher price should be obtained.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight

Services Marketing

Services have moved to the forefront of business landscape. those who were once considered as big manufacturers are shifting their focus to services. The economic growth in services, their profit and competitive advantage potential, and the overall decline in customer satisfaction with servives, the potential and opportunities for companies who can excel in services marketing, management, and delivery are great. To face the challenges of modern day competition, your company needs transformation and necessary planning. My Consultancy–Asif J. Mir – Management Consultant–transforms organizations, makes them relevant, and suggests solutions for succes. For details please contact Asif J. Mir