Perfecting Service Management

Issue #39

Tuesday, March 2, 2004

Managing the Enterprise Customer Relationship
(Part 2)
by Craig Bailey

This is the second article in the series "Managing the Enterprise Customer Relationship," where we discuss how managed service providers (MSPs) can effectively manage complex customer relationships while delivering solutions to the enterprise customer. In the previous article, we highlighted the importance of resource alignment in managing the customer's whole experience. In this article, we present "Four Quadrants of the Relationship" to illustrate the dynamics of the resources involved.

Four Quadrants of the Relationship

There are four distinct quadrants that a managed services provider must be aware of in managing the enterprise customer relationship.

 

The following communications patterns are typical of the 4 quadrants:

  • Horizontal communications are good based on a relationship of trust, developed over time

  • Vertical communications through the "power-line" are sporadic, reactive and only occur when there is a problem

  • Diagonal communications are nonexistent

  • This communication behavior has implications in all 4 quadrants.

Quadrant 1: The business manager doesn't truly understand the value that is being delivered by the MSP. They only hear reference to the MSP when there is a service problem. When it comes time to reduce expenses, they are hard pressed to justify the line item representing the cost of the MSP. Meanwhile, their internal organization "bids" on the project indicating that they can do it more cost effectively.

Quadrant 2: The Sales Representative has little to no insight into how the company is "truly" leveraging the product, the benefits that are being realized, the issues being experienced by those using the product and the value being delivered by the "service organization."

Quadrant 3: The customer's end-users and technical contacts play a key role in the effective use and performance of the MSP's service. They are also key in shaping the business manager's perception of the MSP. However, the only time that they discuss the MSP is when there is a problem. They don't discuss all the great things that the MSP has done on a day-in / day-out basis.

Quadrant 4: Customer Service / Technical Support typically observe that "all things are well with the customer." This impression, which can often be false, is created because the customer's end-users maintain a courteous working relationship with the MSP's service personnel, to make sure that they can continue to "get things done" when they really need to.

All Quadrants: When a significant business disrupting problem occurs (which it WILL), the customer's end-user remains calm, cool and collected when speaking with the MSP's service team. The service team doesn't find it necessary to escalate awareness of the "incident" to the MSP's Sales Representative or Senior Management because they don't understand the level of impact being experienced by the customer.  Because the customer's business "is" being significantly impacted the business manager is engaged, becomes irate, and calls the MSP's Sales Representative and/or senior management, neither of whom is aware of the incident "in progress."

The end result is total (yet avoidable) embarrassment, lost credibility and a bunch of people resembling a deer in the headlights. MSP - Put your suit on…It is time to go meet with the customer and "fall on your sword."

Recognizing the quadrants and the dynamics at play between them will help you properly align your resources to manage the customer's whole experience. In the next article, we will discuss the role of the Account Team in managing the enterprise customer relationship. If you would like to learn more about overcoming the common challenges that managed service providers face with their enterprise customers, feel free to contact us.

View previous articles in this series

A Logistics Perspective (Part 4): More Strategies for Becoming -- and Remaining -- a Preferred Supplier
by Craig Thompson

Becoming, and remaining, a preferred supplier is an important strategic advantage over competitors. In the previous article in this series, we discussed two strategies intended to help achieve and maintain preferred supplier status. In this edition, we present two more strategies.

Strategy 3 – Audit Your Supply Chain

When you consider the major business processes involved in supply (characterized by some as Plan-to-Position, Purchase-to-Pay, and Order-to-Cash) it's important to know that, despite the particular way your company is organized and operates, these processes already exist. They are common to you and your competitors and link to the corresponding processes of your customers and your suppliers. What's at issue is how well they are designed, managed and executed and what other factors may be present that facilitate or impede performance. The purpose of the audit is to address these issues.

Thankfully, there are various tools available to accomplish the audit. In addition to the templates and analytical process decomposition techniques that improve visibility into an enterprise's actual detail processes there are compendia of "Best Practices" that depict what they should be and how they should link that include descriptions of corresponding inputs, outputs and enabling factors. On top of this, they also identify appropriate performance metrics. All of this provides numerous opportunities for consultants like me to analyze "as-is" supply operations and create road maps for a "to-be" state that efficiently and effectively embraces best practices and increases customer delivery value.

Advantages of this strategy include greater objectivity, a clearer focus on strengths and weaknesses, and a comprehensive view of your supply processes. Additionally, I have always found the analytical exercises themselves to be tremendously valuable as an education for the process owners. They invariably emerge more as knowledgeable and effective implementers and managers of the "to-be's".

Another nice feature in this approach is the ability to meaningfully benchmark your firm's performance with others since with best practices you measure consistently designed processes with common metrics. With some external support you can know how your operation stacks up to your competition and where your relative strengths and weaknesses lie.

Strategy 4 – Work with Your Customer

We talked in the previous installment about talking to your customer to identify his supply-related priorities and the perceived strengths and weaknesses in your company's performance as they relate to them (Strategy 1).  Now let's take a look at some of the improvement opportunities that open up when you consider changing the whole supply equation. There are a growing variety of methodologies that deliver direct, measurable benefits that are readily identifiable by all involved parties, including your customer. Some of the better known are vendor-managed inventory, scan-based trading and rapid replenishment. Others are process improvements that enable, rather than deliver, benefits. This type includes CPFR and rapid/accelerated planning.

These are just a few examples and they all deserve a separate article in this newsletter just to describe how they are applied to increase supply value. Whether the measurable benefits lie in cost reduction or sales increases or both, the key is the value is linked to a tighter relationship between your company and your customer.

To summarize, in this and the previous newsletter, we have enumerated several approaches to improving your customer's perception of your service. Not surprisingly, better communications lies at the heart of most. I regret that due to the normal restrictions articles of this type face, we couldn't more thoroughly explore the specific opportunity examples identified in adopting these strategies.

If you would like more information, I encourage you to contact us. In the next, and final, chapter of this article I will point out some of the more common pitfalls incurred in striving for Preferred Supplier status without proper motivation, planning and guidance.

 

 


View previous articles in this series.

Contents
Managing the Enterprise Customer Relationship

Recommended Reading

More Strategies for Becoming -- and Remaining -- a Preferred Supplier

White Paper: Avoiding the Death Spiral While Reducing Expenses

 


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Recommended Reading


According to a new research report from the Association of Support Professionals (ASP), traditional call center benchmarks are rapidly becoming obsolete as a way of measuring tech support efficiency.

 

In a recent press release, ASP executive director Jeffrey Tarter claims that the growth of self-service models, e-mail support, and outsourcing makes metrics like cost-per-call and calls-per-agent almost meaningless.  A better way to measure performance, the ASP suggests, is to look at the productivity and cost structure of the support group as a whole.

 

According to the press release, the ASP report identifies average headcount allocations for seven different categories of support jobs, including management, telephone support, e-mail support, Web content development, services (such as training and consulting), clerical, and "other."  The report also shows average percentages for level-one telephone calls, escalated calls, and e-mail queries, again with breakouts by organization size and primary product price.  In addition, the new ASP report provides basic benchmarks for per-employee payroll, operating overhead. incidents per employee and average call length.

 

Copies of the "Technical Support Cost Ratios" report are free to ASP members ($60 to non-members).

Visit the ASP web site

See the Additional Resources section of the Customer Centricity website for more recommended reading selections.

White Paper:
Avoiding the Death Spiral While Reducing Operating Expenses


If you like our articles, you'll love our white papers! Our editing team has been hard at work generating white papers from the many articles we've written over the last year.

This issue's featured white paper is "Avoiding the Death Spiral While Reducing Operating Expenses" by Craig Bailey and Lauren Weiss.

One of the most complex challenges that businesses face today is that of maintaining customer confidence while reducing operating costs.  This white paper shares practical approaches that can be taken to reduce operating costs while maintaining, or even increasing, customer confidence and satisfaction.

See the Additional Resources section of the Customer Centricity website for more white paper selections.


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We strengthen overall company performance through better service delivery and management.

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In short, we align the resources of your organization to exceed your customers' expectations in the most effective and efficient manner possible.

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