Nowadays, many companies claim to be customer-centric, but few people can clearly explain what customers think of our products and services. How important are the basic features of a product or service relative to other features? Is this difference consistent with the customer's idea that it is worthwhile to sacrifice some features for others? Are certain characteristics essential to retain customers?
If you ask customers what features they like about a product or service, most people will make a long list. Therefore, in order to determine the corresponding value of certain characteristics, innovative companies usually use the method of comprehensive analysis to investigate customers.
In the comprehensive investigation, a product or service is first decomposed into various related characteristics. Ask customers to explain why they buy products or services. Then investigate and evaluate the importance that customers attach to each function. This will enable analysts to consider some possible combinations of these characteristics and use mathematical analysis methods to predict which combinations customers may be interested in and how much they are willing to pay.
The company must also accurately understand the customer's definition of each function. For example, low price means offering the lowest price among all competitors, or lower than the price of substitute products.
Case 1: Rethinking the service priced by profit.
Yun Yun (Yum Yum, Inc.) is a wholesaler of candy and non-staple food. A holding company bought it and hoped to get a high return on investment within one year. Therefore, cutting expenses is listed as the top priority, and the biggest controllable expenditure is the expenditure of sales staff. The company's sales vice president is deeply proud of the quality of customer service provided by his sales staff. But as long as we observe several sales visits, it is easy to find that the work skills of these salesmen can't adapt to the customers they serve.
To this end, the company conducted a comprehensive analysis and investigation of customers to evaluate the importance of various roles of sales staff. They want all the salespeople in a distribution center to list all the ways to serve customers and do research. Then, according to this information, a comprehensive paired comparison questionnaire was prepared. The salesman should send the questionnaire to the related customers, explain it clearly to them, and take back at least 50% of the completed forms. The results show that customers can be divided into three categories:
Large non-staple food/medicine chain store
This kind of shop has a complex business site and is capable of classified planning and management of goods. They just sent someone to pick up the order.
Convenience store chain
Due to the limited space, I hope someone will collect the bill, and I also hope to conduct on-site transactions and get some sales suggestions.
An independent grocery/drugstore
The store's operating space is also limited, and sales staff are needed to help determine the appropriate order content, product category and quantity.
The final result of this comprehensive survey is to reorganize the sales team of Yun Yun Company. All customers in each distribution center are classified according to the type of salespeople they need to serve.
In addition, Yun Yun Company has established its own service post allowance system. After the reorganization, the remuneration of sales staff is determined according to their ability to deal with customers, and is not affected by qualifications or the scale of customer operations.
After the reorganization, the total number of sales teams increased slightly, from 300 to 366. However, the total annual expenditure decreased by more than $3 million, accounting for 25% of the total expenditure.
Case 2: Business process reengineering cannot rely on intuition.
After reorganizing the business processes of their "guards", that is, offices, many companies suddenly find that their important "vanguard", that is, business departments, cannot get the necessary support in their work. Pioneer enterprise is redesigning the merged security department so that pioneer business department and sales staff can serve customers more effectively.
An international life insurance company keeps cutting expenses to offset the decline in market share, but its customer service record has not improved much. The problem is that the sales staff of the company are busy completing personal business indicators according to the policies sold, regardless of whether the customers are really satisfied or not.
The company's business process reengineering working group hopes to increase sales by better supporting sales. Therefore, a comprehensive survey is designed to ask the internal customers (mainly sales staff) of the company's logistics services to evaluate the characteristics and standards of a series of existing services.
First of all, the best salesman points out which logistics service features have the greatest influence on sales.
Then the process of providing the above services is evaluated to determine the existing or possible service level, so that the service level to be checked in the comprehensive investigation is feasible.
Then the comprehensive questionnaire was sent to all 300 sales staff of the company.
The results of this comprehensive survey produced a series of charts, listing the "utility" of each logistics service function. The curve in the figure shows the salesperson's evaluation of the benefits brought by a change with "utility degree". This utility can measure how much customer satisfaction will be increased by making this change to a product or service compared with making another change. This comprehensive analysis can help managers identify two possible changes, which is more valuable.
Then, according to the survey results, the company began to reorganize the logistics department that supports sales. They divide the change of satisfaction brought by the change of service level (expressed by utility degree) by the change cost (the cost of obtaining unit utility degree) to determine the priority of various possible changes.
For example, in the survey, the salesperson pointed out that it is more important for the security service department to quickly inform the customer of changes in the situation (such as changes in marital status) than to quickly reply to the customer's insurance valuation inquiry. So, they appointed an insurance premium management team to inform the sales staff how to handle a customer in the same day.
This practice not only improves the role and work efficiency of logistics support personnel. More importantly, it greatly increases the possibility of finding new sales opportunities. The sales consultant can get a call from the customer asking about the insurance rate on the same day, instead of delaying it for more than ten days. In this way, the time period from the discovery of sales opportunities to the direct contact of sales personnel with customers is shortened, thus increasing trading opportunities.
Case 3: Eliminate financial expenses that cannot be accounted for.
One of the biggest problems in establishing a customer-oriented company is to determine what kind of logistics support services are provided and what is the reasonable cost of such services.
A large retail company requires its logistics department to learn to be customer-oriented. These departments include finance, human resources and management information systems. The question is, how should these logistics service departments evaluate the needs of internal customers and maintain the necessary balance between service level and cost, especially in the absence of other such services?
The executive director of a retail company knows that there should be a more objective way to design and plan logistics support services. The first step is to form a working group by members of the logistics department to determine the main work contents of each department and its specific internal customers. For example, human resources is a key department, which is mainly responsible for recruiting, training employees and managing salaries and benefits. Its internal customers are senior managers, production departments and other logistics departments.
The main problem of human resources department is that it is not sure which part of its work is most important to internal customers. Comprehensive analysis can determine the importance of internal customer support services to human resources departments and how they evaluate these services.
The analysis shows where there are too many resources and where there are insufficient resources. For example, internal customers think that recruiting non-managers and salary and welfare management are more important than preparing training videos and recruiting managers. After collecting various suggestions on canceling, integrating or streamlining non-value-added departments, the company decided to reorganize the whole human resources department.
Then, the company further combines the survey information with the budgeting process, because this analysis provides an objective mechanism to determine what services the company needs in the internal market and how much it is willing to pay to get these services. Retail companies use this process to manage their job performance and quantify the elements of "internal market economy".
Some services can be evaluated without formal comprehensive analysis. For example, if you want to know whether the Christmas catalog made by the marketing department last year is really valuable, you should consult the personnel in the production and operation department. Every branch manager said that this was an unprecedented good thing done by the marketing department, which promoted a substantial increase in turnover.
Sounds like the answer is clear. At this time, a key question appeared: "How much are you willing to pay for this catalog?" The price is $20,000, and all branch managers agree that it is worthwhile; Twenty-five thousand, only about 50% people still want it; If the expenditure is $30,000, no branch manager thinks that the increase in sales brought by this catalogue can offset its expenditure. In fact, the price of this Christmas catalog is shared, and each branch is over $35,000, so the work is interrupted. This once again proves that internal customers, that is, store managers, think that although many features of a product are excellent, they are not worth the cost.
Customer oriented
To be truly customer-oriented, enterprises need to have a special understanding of external customers and their actual needs. However, internal support departments should have the same skills in how to coordinate with each other to help the company meet its customers. With the advanced tool of comprehensive analysis, you can greatly improve your management ability, because it is based on an accurate understanding of the top management inside and outside the company.
The first step is to know the situation:
What all customers, both internal and external, really want from you and the company. How can the internal market of the company play a more effective role?
How to allocate resources to achieve the final management effect.
The second step is to use the above information to redesign the company organization and improve products and services, so as to better serve customers.