I have a friend and occasional wise sage of business who says we provide Customer Service that is too good. This got me to thinking, is it possible to provide customer service that is too good?? Can it be that by constantly trying to go "above and beyond" for our customers we are not helping them to help themselves??
I know that for me personally I value customer service very highly. I am one of those people that will not tip if the service in a restaurant has not been as I believe it should be. I get infuriated when left hanging by some outsourced call centre, whatever the location, or I get to talk to some disembodied voice that I can tell does not give a damn about my account. And I get even more annoyed if I think we have let a customer down. But is this going too far?
In our job we get the "privilege" of working with some of the largest names in IT and IT consultancy and it always astounds us that the level of service they provide to their customers is sometimes shockingly bad. But by dint of the fact that they are a "Big Name" they get away with it. Don't get me wrong, we make mistakes occasionally as we are human, but we always have an in depth enquiry afterwards to try to ensure it does not happen again. But these larger organisations don't seem to have the same fear of poor customer service that we do. I can tell you absolute horror stories of call centres and voice-mail systems.
If their server goes down they get round to fixing it, in time. They then tell everybody else to rush to resend the messages they didn't receive or lost. The other day I was called to a meeting by a customer. The meeting was to explain what we were doing about all the server outages that we have experienced in the last two weeks, not our outages but the big expensive consultancy firms outages. This big consultancy firm was offering no explanation or apology, just a warning that our customers messages were delayed and they should stop this happening. But it was the big consultancy firms servers that were the problem!!! They should know how to stop the problem, fix your damn servers. But we are the ones being asked what we are doing to stop the outages. Go figure.
But I still think that you cannot provide customer service that is too good. Yes I try to ensure we over specify servers and back-ups and comms. But I still fret that we have not got enough, that we might let a customer down. We try to ensure we won't, put systems in to try to prevent it, but I still worry.
And I am glad I do, and we do as a company, because I would like to think that if I was a customer I would be happy to, metaphorically, pay that 20% gratuity for good service. Because I would like to think that our customers are treated as I would like to be treated. It cannot be wrong to strive to be the best, to try to do the best for someone paying you to do a job.
Showing posts with label ISO 9001. ISO 9001:2000.. Show all posts
Showing posts with label ISO 9001. ISO 9001:2000.. Show all posts
Wednesday, March 26, 2008
Thursday, February 28, 2008
The way to profit in EIPP is Systems and Quality
I was reading the postings of another blogger the other day, regarding EIPP. Quick note; For most people EIPP is a re-branding of the most basic of EDI, the supplier sends an invoice. We're great in IT at making up new acronyms or names for old processes in the hope of selling more.
Anyway back to the subject of the post. The blogger in question was bemoaning the fact that whilst there is a lot of interest and "new" players in EIPP, few if any make a profit. One company in question has a turnover of £3.5 Million but loses approximately £7 million per annum. Its P&L account reserve is -£27 million. Another has turnover of £1 Million and loses of £3 million, P&L reserve of -£23 million.
Now here I show my limited knowledge of the practice of Venture Capital and high finance. Both these organisations are backed by VC's and so they are NOT insolvent. But... when are the investors going to get their money back? Or to put it more accurately when are the VC's going to get a return on their investment of other peoples money? I make it that break even is 200% of current turnover, assuming costs do not rise with increased turnover. To get the £27 million pounds back at current growth rate you are looking at a minimum of 10 years. Given that the turnover of the smaller company above went down slightly last year it and that costs increased ahead of turnover at the larger company it could take longer. This is almost "Dot Com" optimism.
So much for high finance.
I think there is a different approach that can lead to a profitably growing company. It may grow slower but note the word profit. That way is to concentrate of quality and systems. Quality because that leads to better systems requiring less resource to manage the processes. Quality because it leads to fewer remedial actions, which always cost more. Get it right first time and it's always cheaper. Quality because any business must concentrate of delighting it's customers. Delighted customers lead to higher retention rates and easier new business sales because of customer referral. My other point is systems. Quality systems. If you can systematise a process rather than having to add more support staff for each new customer then you gain a much bigger return on the investment and, sorry to say, but the fewer humans involved in a process the lower the error rate so the higher quality.
The only downside to the quality and systems approach is that you cannot make a quick "land grab" for a market. But it a lot less stressful for you and your trading partners.
Here's an interesting question for you. If a new customer came to you and asked for 30 days credit, with their company finances in the state described above, would you extend them credit? If not then why would you put important business relationships between you and your business partners in their hands.
Far better to put it in the hands of a company making a profit and dedicated to a quality implementation. Preferably one with a recognised accreditation for quality. Business relationships are hard won and even something as seemingly simple as sending invoices to your customers or receiving invoices from your suppliers deservers to be handled in a quality manor that does not put the relationship at risk.
Anyway back to the subject of the post. The blogger in question was bemoaning the fact that whilst there is a lot of interest and "new" players in EIPP, few if any make a profit. One company in question has a turnover of £3.5 Million but loses approximately £7 million per annum. Its P&L account reserve is -£27 million. Another has turnover of £1 Million and loses of £3 million, P&L reserve of -£23 million.
Now here I show my limited knowledge of the practice of Venture Capital and high finance. Both these organisations are backed by VC's and so they are NOT insolvent. But... when are the investors going to get their money back? Or to put it more accurately when are the VC's going to get a return on their investment of other peoples money? I make it that break even is 200% of current turnover, assuming costs do not rise with increased turnover. To get the £27 million pounds back at current growth rate you are looking at a minimum of 10 years. Given that the turnover of the smaller company above went down slightly last year it and that costs increased ahead of turnover at the larger company it could take longer. This is almost "Dot Com" optimism.
So much for high finance.
I think there is a different approach that can lead to a profitably growing company. It may grow slower but note the word profit. That way is to concentrate of quality and systems. Quality because that leads to better systems requiring less resource to manage the processes. Quality because it leads to fewer remedial actions, which always cost more. Get it right first time and it's always cheaper. Quality because any business must concentrate of delighting it's customers. Delighted customers lead to higher retention rates and easier new business sales because of customer referral. My other point is systems. Quality systems. If you can systematise a process rather than having to add more support staff for each new customer then you gain a much bigger return on the investment and, sorry to say, but the fewer humans involved in a process the lower the error rate so the higher quality.
The only downside to the quality and systems approach is that you cannot make a quick "land grab" for a market. But it a lot less stressful for you and your trading partners.
Here's an interesting question for you. If a new customer came to you and asked for 30 days credit, with their company finances in the state described above, would you extend them credit? If not then why would you put important business relationships between you and your business partners in their hands.
Far better to put it in the hands of a company making a profit and dedicated to a quality implementation. Preferably one with a recognised accreditation for quality. Business relationships are hard won and even something as seemingly simple as sending invoices to your customers or receiving invoices from your suppliers deservers to be handled in a quality manor that does not put the relationship at risk.
Saturday, February 02, 2008
ISO 9001 can improve your business profitability
We have recently been going through the process of achieving ISO 9000 accreditation for our Software as a Service EDI/EIPP offering. It has been a fascinating process. I had always believed that one of the secrets of a successful outsourcing or SaaS offering is to reduce the number of support calls to a minimum. I know this is a statement of the blindingly obvious but you would be amazed the tales we hear from customers moving to our service from other offerings.
When we started out on the route to ISO 9001 accreditation I thought it would have some benefit in terms of seeing where we were making mistakes, correcting them and of course there is the marketing benefit, but mainly in making sure that we continued to provide a quality service for our customers. I believe we are the only SaaS EDI or EIPP provider to be accredited for ISO 9001.
But the more I, with the help of our ISO 9001 consultant, got in to the depths of understanding ISO 9001 it became clear that whilst ISO 9001 does highlight the quality of whatever systems are being measured, the major benefit is the application of the continuous improvement principle.
We have been accredited for our data mapping processes and our systems and support processes for the provision of EDI data mapping, translation and transportation. In my next blog I will discuss the application of process to data mapping and translation, but today I want to concentrate on support.
When I look at a lot of our competitors, especially in the SaaS EDI or EIPP space, I notice that whilst the are bigger than us in terms of turnover, they are typically making huge losses. Some have accumulated losses of over 26 million and yet they still have turnover that is substantially less than their costs.
Looking at it even closer you can see that whilst they increase turnover they are increasing staff, and staff costs, much faster. To me this leads to the conclusion that whatever systems and support they have are not efficient enough. And that is one of the major benefits of the ISO9001 process.
What we have found is that every time we have have a support call/system issue the ISO process of continuous improvement has helped us to eradicate that error/issue for the future. It does not mean that we never get errors but analysis shows use that over 85% of all support calls/issue we received are outside of our service. They are either errors with the data sent to us or the comms of the sender or the recipient.
By concentrating on the ISO 9001 continuous improvement process we are able to keep our support costs to a minimum, we are able to handle millions of transactions per annum with a much smaller team than any of our competitors and we are able to keep improving the experience for our customers and their trading partners.
ISO 9001 does not make you infallible, but it helps you to learn from each mistake and improve your business and profitability.
I did have a cheeky thought though, should I go to the bigger players making all the losses and offer that we do the product, service and support for them, there will of course be an element of cost for them ;-). We could then show them how to make money instead of burning it. Just a thought....
When we started out on the route to ISO 9001 accreditation I thought it would have some benefit in terms of seeing where we were making mistakes, correcting them and of course there is the marketing benefit, but mainly in making sure that we continued to provide a quality service for our customers. I believe we are the only SaaS EDI or EIPP provider to be accredited for ISO 9001.
But the more I, with the help of our ISO 9001 consultant, got in to the depths of understanding ISO 9001 it became clear that whilst ISO 9001 does highlight the quality of whatever systems are being measured, the major benefit is the application of the continuous improvement principle.
We have been accredited for our data mapping processes and our systems and support processes for the provision of EDI data mapping, translation and transportation. In my next blog I will discuss the application of process to data mapping and translation, but today I want to concentrate on support.
When I look at a lot of our competitors, especially in the SaaS EDI or EIPP space, I notice that whilst the are bigger than us in terms of turnover, they are typically making huge losses. Some have accumulated losses of over 26 million and yet they still have turnover that is substantially less than their costs.
Looking at it even closer you can see that whilst they increase turnover they are increasing staff, and staff costs, much faster. To me this leads to the conclusion that whatever systems and support they have are not efficient enough. And that is one of the major benefits of the ISO9001 process.
What we have found is that every time we have have a support call/system issue the ISO process of continuous improvement has helped us to eradicate that error/issue for the future. It does not mean that we never get errors but analysis shows use that over 85% of all support calls/issue we received are outside of our service. They are either errors with the data sent to us or the comms of the sender or the recipient.
By concentrating on the ISO 9001 continuous improvement process we are able to keep our support costs to a minimum, we are able to handle millions of transactions per annum with a much smaller team than any of our competitors and we are able to keep improving the experience for our customers and their trading partners.
ISO 9001 does not make you infallible, but it helps you to learn from each mistake and improve your business and profitability.
I did have a cheeky thought though, should I go to the bigger players making all the losses and offer that we do the product, service and support for them, there will of course be an element of cost for them ;-). We could then show them how to make money instead of burning it. Just a thought....
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