With all our focus on good/better/best practices and their integration with the concept of holistic supply chains, we sometimes put customer service on the mental back burner. But without customer service as an integral component, what's the point of supply chain excellence?
It's not simply about reducing or managing costs; that's too easy and too simplistic. Customer service is the reason that supply chains exist: right thing, right place, right network, right time, right way, right price, right attitude.
What customers need—and sometimes have the audacity to expect—is driven by their product and order profiles (which can change over time), their needs, their demands of the moment (which often relate to their needs), and how they must deliver to satisfy their own customers. It is, as we have previously written, customer service that drives how supply chains are built, determining such things as distribution network structures, inventory holdings and deployment practices, transport modes and use, and sourcing and supplier integration.
These fundamentals are true whether one provides goods or services, and whether the arena is business-to-business (B2B) or business-to-consumer (B2C) commerce. Those who get all those rights right, will prosper. Those who don't, won't. But ultimate demise may be a while in coming.
THE LATEST CASE(S)
Your fearlessly adventurous reporters were not caught up in the much-ballyhooed and over-hyped overload at parcel carriers trying to meet impossible demand peaks for Christmas. And, in truth, those "failures" were not the consequence of deliberate actions to contain costs or to pretend to have a customer service commitment when the real wish was for the customer to go away quietly after paying.
But the spotlight has helped intensify our thinking about the criticality of customer service, both genuine and ersatz, in business success in the Age of the Supply Chain. And we have had our own service contretemps in the recent past. FedEx and UPS are certainly not bad actors in the customer service melodrama. And a few companies have built staggering reputations and cult-like followings on nth-degree customer service. They, in general, are succeeding wildly. We refrain from naming them, lest we omit a deserving candidate, but the industry verticals represented include automotive, general retail, apparel, manufacturing, hospitality, specialty retail, communications, entertainment, and business services—and, yes, supply chain management.
THE DARK SIDE
There, sadly, are too many no-service or not-quite-service providers lurking in the thickets of competitive commerce. These are the outfits that have a formal customer service function because it is required, whether by regulators, by license grantors, by competitors' practices, or by the demands of customer perception. Many of these great pretenders try to get by with slogans, outrageous claims, charismatic spokesmodels, and loads of advertising. But they do reveal core corporate cultures when facing (or avoiding) service stress.
Do they not realize that protected territories for single provider services are a fading remnant of the past? That unique products and processes lose uniqueness or patent protection over time? That there are competitors in all dimensions of products and services who can and will differentiate based on technology, reliability, service, cost, quality, integration, whatever? But treating customers like unworthies of somewhat diminished capacity is not a strategically successful course for sustainable revenue and profit building. And too many companies fail to respect their customers, whether businesses or individuals.
More breaking news: We know the truth, and others are catching on rapidly. The days of the rapacious hucksters are numbered. We only wish we knew the number and could plan accordingly.
THE MANY FLAVORS OF CUSTOMER SERVICE
Putting aside the unseemly details of our specific recent adventure, which was not excellent, this is ultimately about the role of customer service in supply chain performance and enterprise success. So, what can customer service do for you, and what can it do to you?
First, recognize that customer service encompasses all relationships and interactions between your organization and your customers (including your internal customers); it is not limited to the functionality of a specific box on the org chart. Customer service is the totality of a buyer's experience with the seller—order placement, product inquiry, problem-solving, tech support, returns, image and appearance, transaction accuracy, order fulfillment performance, community relations, general ease of doing business, interpersonal relationships, value, collaboration in products and processes, and on and on.
Here's what's at stake when you make decisions about the what, why, and how of your customer service:
- Middling-to-poor customer service can undermine—even ruin—excellent operational supply chain performance.
- Exquisite customer service can overcome the short-term impacts of marketplace events, e.g., floods, famine, conflict, earthquake, tsunami, shortages.
- Robust customer service can mitigate customer reaction to sporadic failures in supply chain execution.
- No amount or quality of customer service can make up for frequent and continuous supply chain failure.
- Superb customer service can enhance customer relationships, protect business volume, and help build business growth with existing customers.
- Dynamite customer service can generate business growth through current customers' word-of-mouth endorsement.
- Shabby, shoddy, ineffective, or otherwise negative customer service can drive customers into the waiting arms of ardent and loving competitors—at incredible velocity.
- The flip side of word-of-mouth endorsements is that news of bad customer service travels at least six times as fast as testimonials for good customer service.
THE COST OF CUSTOMER SERVICE
Those who see it as an investment understand that the payoffs of customer retention, business protection, and sales growth are huge. Those who see it as a cost, a necessary evil in doing business (or an onerous requirement imposed by regulators), think customer service represents an opportunity to trim costs, or to get by with either a minimum or a faux function that minimizes the expense involved.
What the beady-eyed cost managers fail to see is the economic damage visited upon the enterprise by lost business volume, by lost customers, and by the rise of competitors with a longer-range vision—and an understanding of customer service as a competitive weapon, a differentiator.
At its best, in addition to the short-term and tangible business results, customer service can provide a window into what customers think, want, and need as they plan how to succeed in their own markets and with their customers.
AND THE FUTURE HOLDS?
Potentially fatal diseases seldom develop without signs and symptoms. We'd submit that eventual business failure is a likely consequence of some combination of supply chain failures and customer service shortcomings, pretenses, implosions, or mediocrity.
