- So we're on the topic of Customer
Service, getting it right in your
business, understanding the implications
on your distribution network,
and really how you can extract more
value on getting more cost out of your
business.
Hi, this is Rob O'Byrne from Logistics
Bureau, and with me again is Matt
Stedman, one of our senior staff who has
been doing a lot of work in recent years
on the implications of customer service
and the cost to the business. So Matt, in our
first video, we talked about three key
things and we'll put a link to that
video below this one. We talked about
understanding what the customer wants,
designing the customer service offer to
make sure it matches the market need, and
then making sure that our distribution
network was structured to deliver that.
So, I guess the first step, let's dig into
that one, really understanding what
customers value, what do you find in here?
- Well Rob, what I find is that most
businesses forming, fall into a bit of a
habit about what they think they know
about what customers want, and the best
thing to do is to try and penetrate that,
to genuinely get to the underlying
what the customers value, and so, for example,
our customers will if a
sales rep were to ask them, they would say,
"Hey, I want a good level of service, I want
a competitive price, and I want a strong
relationship with, which is pretty in
fact, useless information to be honest.
- Really?
- Absolutely.
- Oh, I hope you're going to tell us why.
- Because you've really got to penetrate
what customers value. on time and to do
- Okay.
- And to do that,
we use a technique called Conjoint Analysis,
and what Conjoint Analysis does...
- Hang on,
there's a few eyeballs rolling here, so are you
going to explain this in layman's terms?
- I'm going to do my best, Rob.
- Okay, okay.
- So what Conjoint Analysis does is
if you're like give a forced ranking to what
customers generally value, because that
is what allows you to prioritise what
you, what resources you apply to
servicing those customers.
- Okay.
- For example, customers might say that
"Hey, we want great level of service."
But actually, sometimes really what they're
meaning to say is that "Actually, what we
want is great reliability,
we want you to deliver on...
- I was going to say that,
you know, that in 20 years of
helping companies, you know, with the
logistics and supply chain problems, and
issues around customer service, the
number one thing that I found that people
want is consistency.
- Absolutely.
- And reliability.
- Absolutely,
A hundred percent.
Now that's not the same in
every industry. Now, for example, I had a
parts distribution that is a same day deal.
- Yeah.
- It's go to be there (snap) like that.
But there are other industries where that
does not apply, and so I've been working
with a client recently about designing
in fact, it's a whole network story,
but it started with this issue about what
the customers really value.
- And what did you find?
- Well, you know what, you know using
Conjoint Analysis, what we penetrated was
that the customers prioritise
reliability and importantly, the
relationships that they have with their
management and sales staff
over
- Over price.
- Over price and over what
you would normally call service.
- So speed of service
- Exactly, so...
- Think about that for a moment
in your own business.
and this is not uncommon,
this is not just a one-off case study,
we're finding this all the time, so it's about
reliability and the strength of the
relationship, so think for a moment
about different suppliers that you deal
with in your business or even in your personal life.
Do you go to suppliers where you
know you're treated well, the
relationship's good, it's reliable,
I certainly do.
- Yep, yep.
- I mean there are
going to be a lot who just pick
suppliers on price, aren't there?
- Uh-huh, uh-huh,
and you know...
- That's probably not the majority.
- Well, that's right,
and so the,
I guess the penetrating thing
here is that if you don't have a clear
view of what customers generally value,
then, you are gonna misallocate
your own internal resources,
and you could be under-servicing
or over-servicing what
customers value and that's...
- Okay.
- And value is what customers pay for
- Exactly.
So, we probably need to dig into
a little bit more detail on how we do
that analysis, and work out what the
customer service offer should be.
- Yep.
- We'll do that in the next video.
- Great.
- We'll put a link below,
- Okay.
- Thanks for that, Matt, some great insights and
I think the key takeaway from me on that
is that in most industries, most of your
customers are probably valuing the
relationship and the reliability of service
rather than the cost.
- Yeah.
- Great take out.