MNC Consulting Group Newsletter
April 2012
The Efficient Organization
Coffee House

Leaning for Customer Value

 

Is the customer always right? Yes. Do customers buy your products or services because you have the best products or services? No. Customers buy your products or services because of their experience with buying your products or services. Let me tell you what I mean by using Starbucks as an example.

 

Ask a Starbucks customer why they go to Starbucks and they'll probably say it's because the service is efficient, staff is friendly, baristas are creative, ambience is modern and inviting, facilities are clean, and no one kicks you out after you've finished your coffee. Customers flock to Starbucks not so much for the coffee (even though coffee is Starbucks' main product), but for the experience.

 

So how do they do it? How does Starbucks maintain such a positive customer experience? They do it by being as efficient and productive as possible - by eliminating all steps in the process that do not add value to the customer experience. By applying traditional lean concepts, Starbucks has been able to increase its operational efficiencies as well as its competitiveness, and at the same time, improve their customers' experience. Because they focus on customer value and regularly evaluate and improve their existing processes, organizations like Starbucks are successful. This approach to continuous improvement is essential; especially in today's economic climate.

 

And eliminating waste is not just for profit businesses. Governments are also realizing the benefits of improved efficiency. I recently learned that the Government of Saskatchewan has made great strides in eliminating waste from their processes. For example, their Farm Land Security Board processing time saw a 93% reduction, their Livestock Revolving Fund realized an annualized savings of $146K to $208K, and at the Ministry of Energy and Resources, application processing time was reduced by 98% - going from 41 days to one day. As well, by reviewing processes to eliminate waste, the Government's vertical well processing function was discontinued, since it contributed no value to current operations.

 

The above are just some examples of the benefits of 'leaning' to gain customer value and cost and time savings. Whether your organization is a profit or not-for-profit business, there are only two options available to you. The first option is to regularly evaluate your operations to improve efficiency and productivity as part of your organization's continuous improvement cycle. The second option is to not do option one. Thriving organizations choose option one. 

Pursuit of Profit
Business Handshake

 

Taking Care of Business

 

Customers generally love to receive something they had not counted on; unless it's bad service. Bad service is a real deal breaker. Think about the last time you dealt with a government agency, a private company, a not-for-profit society, or other type of business. How was your experience? If it was pleasant, you probably don't remember too much about it other than that there were no glitches in the service. But if your experience was unpleasant, I bet you remember almost every detail. Not only that, you probably told two friends and they also told two friends and so on.

 

How organizations treat their customers is far more important than the price that is being charged for the product or service. How many times have you paid more for a product or service just because you liked dealing with the vendor? If you want to improve your profit margins, here are five ways to ensure that your customers keep coming back for the right reasons:

 

  1. Treat your customers the same way that you would like to be treated. Always. All people want to be treated with fairness and respect. And remember that first impressions are lasting impressions.
  2. Train your staff to understand their role in your business and to treat your customers the same way that they would like to be treated. See point 1 above. Staff must be helpful, courteous, and knowledgeable.
  3. Be accessible. Businesses that don't answer their phones and have layers of telephone greetings and instructions are not helpful. Customers don't want to talk to machines or have to wait for 45 minutes to talk to a live person. See point 1 above.
  4. Listen to your customers and especially listen if they have complaints. Don't dismiss complaints or presume they aren't important. Always listen to and do something to resolve complaints. Promptly. See point 1 above.
  5. Run an efficient and trustworthy operation. There is nothing worse than enduring aggravation or mind games while making a purchase or listening to a proposal for service. Minimize inconvenience for your customer; do not mislead with semi-truths or outright false promises. See point 1 above.

 

Good customer service must be included in the continuous improvement cycle. No matter how superb your product or service, if you don't take care of your customer, your customer won't take care of you. Working to continuously improve customer value and customer interactions will ensure a healthy bottom line.

In My Humble Opinion (IMHO)

Government organizations are notorious for inefficiencies. Just pick any one process and I'll bet you dollars to dimes that there are at least two improvements that can be made in mere minutes that could save time and aggravation for both staff and customers. So why doesn't this happen? It doesn't happen because government has not traditionally focused on serving its customers. It's time for government to pull its head out of the proverbial sand and look at the enormity of possibilities that can be had through improved efficiencies and customer value. If that happens, we all come out as winners. IMHO.

 

"Management is doing things right; leadership is doing the right things."

Peter F. Drucker

About MNC Consulting Group
Our goal is to help you to dramatically increase efficiencies that immediately boost your profit margins.

 

ISSN 1925-8941   

Extreme Profits is a monthly electronic newsletter discussing how leaders can be more efficient and areas where organizations can save more money. 

 

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mary@mncconsultinggroup.com | MNC Consulting Group |

5536A Hamsterly Road | Victoria, B.C. V8Y 1S5 | 250-658-4873

 

In This Issue
The Efficient Organization
Pursuit of Profit
In My Humble Opinion (IMHO)
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