The Repeat Sale! Create value, not want!

Leaving convention aside for necessary Reinvention…

We all know the “Sales guy”, the guy who closes the deal and in the vacuum left by him is the memory of a charismatic fellow, who made us forget why we are doing business with the customer in the first place!!... Strange as it sounds, it’s a reality that often visits us too late when our customers are barking at us as to why they are leaving to find someone else who actually fulfils their needs and keeps all their promises!      

Leaving aside the ‘obvious’ clichés like “always keep your promises”, “say what you mean, mean what you say” and my personal favourite “do what you said you would do”, management over-focus on aggressive sales growth is often driven by variables outside of the company. I submit that this creates strategic weakness in how repeat customers are managed through Account Managers, whom are often conflicted in their roles by design.

In a prior role in Credit Management, I got an escalated account where a senior customer manager was very angry with what he saw as an appalling service provided by the company. The account was small in revenue terms and ”the sales guy” was happy for me to deal directly with the customer. After getting a raw deal from multiple departments, whom should have organised the resolution to the problem, it was passed from department to department as the customer grew more and more red faced! When I eventually got the call, he was furious and I certainly got a piece of his mind. Appalled, I worked through his issues after the initial venting; when a bad call was turned into an opportunity to “make it right”.

Here is what I did after the first call:

• Confirmed customer allegations of overcharging
• Responded to the customer with confirmation and a plan to put it right
• Coordinated with all stakeholders to find out exactly what happened our side and obtained documentary evidence of transactions supporting the process flow that is in contention for the periods in question.
• Conducted a forensic analysis of the documentary packet identifying bias errors in process flows; tracking them back to the teams and individuals concerned with the assistance of their team leaders.
• Agreed a resolution with the team leader on training to fill the skills gap identified in the investigation and a timeline for completion of retrospective queries related to this issue.
• Followed up with the team leader to confirm query resolution compliance, deployment of training with his team and brainstorm any automated enhancements that could prevent this happening again.
• Updated the customer and asked to meet him face to face to discuss next steps.

 A busy man, the customer made time for me and I went out to see him. He was in a more positive mood given he signed off on numerous credit notes showing progress on my company’s part.  After that positive meeting, I did the following:

• Updated all stakeholders involved on the meeting.
• Followed up with internal stakeholders to put simple changes in place.
• Confirmed deployment was successful with all teams in a feedback session
• Trained my own team on the changes and what to look out for into the future.
• Followed up with the Billing Queries Team Leader to confirm all queries resolved along with audit of subsequent bills confirming correct billing.
• Updated the customer on the successful resolution asking for their feedback.
• Set a review call for three months from that point to confirm account was running ok and to address any issues therein.

Sounds exhausting for a small money account, right? Well it was and with “the Sales guy” uninterested still, the happy customer who was impressed with us pushed within their company for a regional switch to my company which was a contract in the millions. Suddenly the uninterested Sales guy appeared along with a “Strategic Sales guy” who I never heard of before. Apparently, he has special talent that means a customer will never have to worry about a thing. All it took to get a multi million dollar contract was a great product, service offering AND a back office structure that minimises the customer’s cost of doing business in dollars and resource drain on all levels.

This true story shines a light on what so many overlook in the dogged chase of aggressive sales growth, which by its very definition is unsustainable. If you don’t consolidate your back office correctly with the customer at the centre of your efforts from employee incentives to organisational design, you will eventually loose your customers and not replace them fast enough to maintain your trajectory thus crashing your sales growth.

On that note, here is some advise I have for all who are thinking about this and how they could fix this issue within their company:

• a)    Don’t assume your products are indefinitely loved by customers, incentivise your Account Managers to complete “routine check-in calls” with customers of all sizes finding out their current satisfaction with the company AND its products along with their needs going forward.
• b)   If staff are incentivised on meeting sales targets that are crazy aggressive with no additional KPIs on customer care, then their anxiety in getting back to making money can come across as arrogance to a customer who spends small with the company. You never know who will grow into the titan of tomorrow, and if you treat everybody as the titan of today, tomorrow’s titans will remember you kindly.
• c)    Today's big spend accounts needs to be handled by account managers with exactly the same high level of training as regular account managers, the only difference is they handle less accounts. Apply your teams expertise evenly remembering big spend accounts spend money to have a great product AND service, not to ensure your other customers don’t have the same experience.
• d)   Create a KPI incentive base for account managers that are different to new business development executives who should be focused on business expansion plans only! Ensure your KPI suite for account managers covers non-sale check in calls, billing query resolution rates, customer satisfaction index surveys, sales (repeat) and sales (new product ranges). The account manager as part of the KPI incentive suite should do cross selling as the customer’s main point of contact.
• e)    Conduct index surveys on account managers by internal stakeholders (ran by HR) to ascertain their level of skill in project management, stakeholder engagement and stakeholder influencing.

There are more, but even with these changes, the impacting and consequential changes needed to do it right would make a positive impact on the organisation in my view. It comes with risk, but doesn’t all great things come with risk before you can reap any reward? I think so, what do you think?

Sources/Credits:

Pics;

www.xspology.com

www.canstockphoto.com

www.accountmanagementskill.com

www.vehiclestrategies.co.uk

www.icafemanager.com

www.webdesignmash.com

www.gratisogragphy.com

Credits:

Special Sales Agreements, making money and collecting it!

What’s relevant in a successful contract...

In business, we make agreements every day to sell goods, services and ideas normally for payment in today’s monetised world! Money and payments are as old as the earliest civilisations and not even the mighty Spartan City-State of antiquity could ignore its value. Money in short is a facilitator of progress and how we encompass it into our business contracts will affect our ability to close the transaction with payment and thus make progress in our business achieving sustainability over the longer term.

With large and/or indirect customers, we enter into special arrangements and agreements based on special circumstances of trade, which our standard terms and conditions of trade do not cover. Here are some areas of interest every business should focus on as the ‘seller’ in any contract in my view.

1) Jurisdictional Governance. It is very common for standard terms & conditions to have a governance clause especially in the case of contracts that conduct sales internationally.

2) Product Definition & Price. All products available to the purchaser should be defined in a comprehensive sales contract. This includes product description, list price and details of any discounts/price alterations to the list price. There should also be a clause on price reviews defining a process with timelines on when a price becomes available for review and how consent for any price changes are enacted.

3) Arbitration/Mediation Clauses. They can be a good thing in certain types of contracts depending on the establishment of clear jurisdictional governance and compliance with the local laws of said jurisdiction. Be careful though; make sure any contract clauses of this nature are not in addition to local provisions for arbitration and/or mediation (e.g. mediation is now part of the EU collections process). The value of goods billed under a contract can be tied up for long periods of time in such processes so a customers credit worthiness and your businesses quality control functions are key areas in circumventing dispute issues that could lead into arbitration and/or mediation.

 4) Distributor Agreements. In most industries, sales contracts that fall outside or in addition to the standard terms and conditions of trade are indirect in nature. Distributor agreements can be very profitable for most businesses but can place great strain on the manufacturer's operating cash position and liquidity. The agreement terms would need to cover three main areas in good definition and process content. Firstly, the contract term would need to have qualitative milestones to ensure the manufacturers interests are protected against bad distributor behaviours and/or actions. Secondly, the audit and inspection of goods at the reseller location would need to be part of the contract with access, inspection and retention rights expressed clearly in the contract. Finally, the contract should have retention of title clause with retention of cash sub clause.

5) Retention of Title. The agreement should ideally have retention of title clause with retention of cash sub-clause inserted into the agreement. This would not allow title to pass to the reseller until the reseller has paid for the goods thus making physical goods reclamation possible under law. In the event of collections disputes, a registered retention of cash sub-clause (you need to check its enforceable in the jurisdiction of choice) is a good option as it applies to cash generated from physical and non-physical products.

6) Payment (Credit) Terms. Every company that has a credit facility for its customers should have standard payment terms. “Net 30 days” is the most common in the world today, but with comprehensive sales contracts, payment terms can become a selling point especially if there is a reseller aspect to the relationship being negotiated. The manufacturer should not overlook this as a selling point as margins and discounts often don’t take into account the payment terms excess to standard payment terms if offered in a specific sales contract for goods, services or ideas.

7) Credit Worthiness. It seems obvious but a specific sales contract should have certain terms like payment terms/discounts/etc subject to a credit worthiness evaluation and check. The ability to do business successfully under the terms and condition of the contract should be tied to the ability of the seller to reasonably be assured the buyer can settle his or her bills in a timely manner. I would also insert a clause about agreement to provide security should it be sought by the seller/manufacturer. This often is negotiated and instead of risk mitigation through a deposit/prepayment/etc, risk could be shared with a 3^rd party through a revolving letter of credit, etc.

8) Credit Insurance. If you elect to go down the credit insurance road, do remember that the process structures in credit and collections need to be off a high standard, consistent and transparent in nature. This impacts any exceptions like special terms and conditions around credit in a specific sales contract. You may want to insure the incurred debt given its overall value so any deviation from standard terms and conditions should be checked with the insurer first. If they agree, be sure that any process augments or contractual adjustments required are in place before the contract becomes binding.

Sources/Credits:

Sources:

http://www.aceltisgroup.com/2014/05/28/3-top-reasons-a-real-estate-sales-contract-falls-through/

http://www.dmv.org/articles/making-an-auto-sales-contract/

Sustainable Customer Service… Tomorrow's Vision

Living for Tomorrow with Today in mind!

Are you thinking of your customer service department when reading this article’s title? Hey, that’s cool but when we think sustainable customer service, do we really think about all departments, employees, contractors, distributors, vendors, regulators and the most important stakeholder of all, which is the customer??

The fact is that customer service is a department that has handled many different functions ranging from credit control to telesales, telemarketing and on occasion more exotic assignments making its way into the departmental mandate that defines a ‘customer service’ department. Customer service is defined as “the process of ensuring customer satisfaction with a product or service.” I would thus submit that in order to be sustainable over time, a business needs to secure customer service as an organisational anchor which addresses the single objective of maintaining a high level of customer satisfaction with a company’s product range which includes goods, services and new ideas. This to me is a matter of organisational positioning and alignment, information structuring around the customer interface and what happens from there in terms of analysis, definition of actionable tasking of same in a customer centric manner. The opportunity lies in what customer service can do, instead of what it does on any given day.

In order to explore the strategy side further, we need a defined sense of the following:

Organisational Goals/Objectives. What are management’s strategic plans in terms of perceived customer value and how this insets into product life cycle length(s), new product generation and projected repeat business volumes.

Organisational Structure. Who looks after market research? Is the marketing department the right place for information collection and collation or analysis of collated information taken directly from the customer?  Is there any information waste where relevant information to other areas of the business is discarded in the market research process? Could a more centrally aligned function manage raw information more effectively? Does customer service perform a number of roles or is it aligned directly behind Sales and possibly finance if charged with a credit control role?

Mandate. Is the mandate clear? Does it define or imply customer service is a support role to other functions; or is it clearly mandated with tasking of its own based around ensuring customers are satisfied with the company’s product range.

Company Culture. Does ‘the real company view’ see the customer service department as a 2nd tier department behind Sales and Marketing departments? Is customer care represented by professional managers at senior levels inputting into strategy and wider company problem solving? Are findings in customer care taken seriously enough to develop actionable tasking to focus or refocus company resources on ensuring customer satisfaction with the company’s product range? Do other departments pass off customer care issues to customer care thinking it’s not really their problem? Does a business intelligence opportunity get lost in the politics of company culture through lost and/or discarded information?

3^rd Parties. Does customer care in the remediation of issues, which detract from customer satisfaction, have access and authority to deal with and/or correct 3^rd parties that are identified as issue makers with customers?

These are some of the issues that one should consider when thinking about customer service, what is it and how it can create value for the company in a sustainable manner. The balance of thought is based around how customer service could reposition itself through redefinition of customer service as an organisational anchor within the organisation.

Contextualise the function/Understand the Organisational Landscape. There are no prises for guessing, only inevitable failure; so it’s very important that any strategic review of customer service to be contextualised to the organisational structure. Customer service’s actual position in the organisational landscape needs to be understood as does its relative position to other functions both expressed and implied, so it’s current range of services actually practised are evaluated for their completeness, efficiency and efficacy in maintaining customer satisfaction with the product range.

Scenario Plan. Scenarios should be run to see the impact on organisational efficiency by repositioning customer service. Are there redundancies created or eliminated by a repositioning of customer service and will departments like marketing, finance and sales need to engage in reorganisation to take on or off load activities to or from customer service? Also, what planning impacts are identified in these moves in areas like budget, culture/morale, resource reallocation, etc.

Create Understanding and Value. A customer service function with a mandate that focuses sharply on the customer value proposition and resulting satisfaction is one that creates a sustainable future for the company through an aligned process of information collection, customer development and the identification of market facing opportunities and threats. Despite the urban myth, Sales Representatives do not make as much contact with “their” customers like customer service representatives can. Quality telephone contact can range from 30-50 quality calls a day, where as a customer visit volume rarely exceeds 8 per day. Also, telesales representatives will call customers based on the likelihood of sale whereas customer service should call customer’s based on the need to maintain a good relationship with the customer whilst understanding how the customer views the product range, the company and their experiences with its employees. This information if collected, collated right and directed into secondary processes across many functions can be pivotal transforming the life cycle of a company.

The stakeholder approach. The concept of an organisational anchor is one that has company wide impact. The process revision should have a strong efficacy level based on a platform like lean six-sigma where the shortest and most effective process design is deployed in an integrated company wide manner. This would make anchor functions widely impacting thus their development requires a company wide stakeholder approach. Company wide management engagements, employee engagements, manager/employee ‘buy ins’ through employee workshops on the principles, design and desired outcomes should be held along with company wide meetings and presentations designed to spread internal awareness, transparency and openness on the desired outcomes and where the company is at in its change management plans.

Customer Service as ‘Project Managers’ of Customer Relationships and Problems. It’s a good idea to have the customer relationship ‘owned’ by customer service with account assignment protocols allowing customer service representatives to become end to end resolvers of problems big and small interfacing with all functions of the business in such tasking. The “upstream” catching, defining, analysing and resolving of issues makes for a big difference in the sustainable mandate of maintaining customer satisfaction at high levels. It would allow Sales staff time to develop new business with a new account transfer process to the customer service ‘relationship manager’ which in turn defines credit control’s secondary customer ‘call position’ for finance and billing related issues. It would create better homogeneity of service in the eyes of the customer in my view.

Professional Approach/Professional Outcome. The training and education of customer service personnel varies wildly from organisation to organisation. I personally think a company should develop a focused training and development approach for customer service staff where spreading internal awareness of customer service is a company, not a functional responsibility. This should be part of the training curriculum alongside external customer satisfaction, marketing, information management, legal, finance, project management, account management, billing & systems and negotiation. The resulting investment in professional customer service personnel would create in my view a long term yield once they are being led consistently in a consultative manner engaging creativity as much as analytical prowess. 

Support from the Top. Like all change, it is doomed to failure if it does not have support from the very top. The change initiatives actively supported by the CEO and the senior team reverberates through the organisation and increases its chances of success like no other single element.

We always fear change for understandable reasons but when we think of how a mandated function like this can change our company’s fortune for the better, are we not obliged to at least hear out the proposition and move forward to explore its potential. ‘Nothing ventured nothing gained’ is the cornerstone of all successful change ventures and with ‘upstream’ data capture of issues, opportunities and threats with an effective and integrated process flow behind it, an organisation can rest well know it has the eyes, fins and tail to swim in the waters of business life navigating dangers and inviting opportunities as they go.

Source Links/Credits:

Definitions:

a)    Customer Service

http://www.investopedia.com/terms/c/customer-service.asp

Credits:

            None

#Sustainable Capitalism, #Customer Service, #Development, #Business, #Growth, #Project Management, #Strategic Planning, #Strategy, #Organisational, #Organizational, #Organisational Structure.