Perfecting Service Management

Issue #16 Tuesday, April 15, 2003


topical index

Welcome to this edition of the Customer Centricity newsletter, where we explore ways you can improve the performance of your service organization.

In this issue:

Avoiding the Death Spiral While Reducing Operating Costs - Part 1

One of the most complex challenges that business leaders face today is that of maintaining customer confidence while reducing operating costs. It's a business reality that when a company fails to make its revenue numbers, it has to take action to achieve (or regain) profitability. This article introduces the next series in our newsletter that will share practical approaches that can be taken to reduce operating costs while minimizing the impact on the customer. In fact, why not go a step further by taking steps to increase customer satisfaction at the same time!

After all, the customer is the single source of the “current” revenue stream and represents a link to future revenue. If costs are cut in a way that negatively impacts the customer then you may very well enter a “death spiral.” That is, you cut costs, the customer is negatively impacted and you have defections. Your next quarter’s revenue numbers are off again. This results from the current economic environment (e.g. you are unable to sign new customers) PLUS the fact that you have fewer customers than last quarter. You again cut costs, the customer is negatively impacted and you have more defections. It's a vicious cycle. But, there is a better way…

Following are approaches that can be taken to reduce operating costs while maintaining customer confidence and increasing customer satisfaction:

  • Cease activities that provide no value-add
  • Implement efficient and repeatable processes
  • Focus on existing product quality instead of new features and functions
  • Enable customers to self-serve
  • Perform elements of the work with lower cost labor
  • Segment the customer base and provide “appropriate” levels of support for each
  • Make informed, not random, cuts
  • Cease big, expensive projects with long-term ROI
  • Renegotiate vendor contracts

Each of these topics will be covered in detail, in subsequent newsletter editions.

If you make cost cutting decisions without considering the impact to your customers, you have lost sight of your current source of revenue. You may also be cutting off your future revenue streams. There are plenty of other companies that are more than happy to focus on your customer, namely your competition.

Could your competition be making decisions RIGHT NOW to forego the achievement of this quarter’s profitability results (short-term thinking) and investing in ways to capture market-share to position itself for future profitability (long-term thinking) with YOUR customers? Something to think about…


ACTIVE - Part 5

By Ida Zecco

This is the fifth article in the series, covering the six-step self-assessment process, ACTIVE, to help you to hang-on to and grow your single source of revenue, the customer.

A - Account Management
C - Customer Lifecycle vs. Sales Cycle
T - Account Team
I - Internal Infrastructure
V - Value Proposition
E - Enable Customer Involvement in Product/Service Development

V – Value is the single most important element of a customer/vendor relationship. What value do you offer your customers that they cannot purchase or experience with anyone else? If you do not know the answer to that question, you should not be surprised to see a migration of your very best and valued customers to your competitors. And, if your employees do not know the answer to that question, the likelihood of losing opportunities every day has just been increased. Statistics have shown that price is not the determining factor as to whether a customer signs a contract. Rather, the customer believes they will receive, or have received, value throughout the customer life-cycle that is worth the price (which is usually higher than the competitor). When you deliver this kind of value you will find your customer referencing your firm to other companies, internal groups, and to analysts. All of which can only mean increased sales, profit and positive branding for your company.

What can you do right now to increase your value proposition: in one year? In two years?

Previous articles in this series:

Part 1  Part 2  Part 3  Part 4


New White Papers Available

Customer Centricity is pleased to announce the availability of two new whitepapers:


More About Customer Centricity, Inc.

Customer Centricity is a business consulting firm that partners with companies to improve the performance of their service organizations. We leverage our real-world experience to help our clients manage their customer relationships in more effective and satisfying ways.

Customer Centricity delivers on this promise by optimizing the interaction between people, process and technology to achieve higher levels of customer satisfaction and increased operational efficiencies. We provide:

  1. Comprehensive assessments to identify the actions that will yield the greatest return;
  2. Skills Training to enable customer-facing personnel to deliver exceptional levels of customer service;
  3. Design and Implementation of business process techniques to serve the customer in efficient, effective and consistent manners; and
  4. Identification of the appropriate business processes to automate, enabling companies to get the most from their investments in technology.

In addition to our core practices, we also maintain a network of strategic partnerships to provide end-to-end consulting across your organization with a commitment to seamless execution.

Click on the following link to see what our customers have to say.

To learn more about Customer Centricity:

call: 603.491.7948

send e-mail to: 

or visit our web-site:

In Closing

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Copyright (c) 2003 by Customer Centricity, Inc. All rights reserved.