Improving Customer Interaction

(Originally published as a Hardware Services column in the August 2001 issue of AFSMI's The Professional Journal.)

By Leo A.P. Moerkens

We've seen a lot of changes in our services environment over the last decade. Most companies have moved from a cost-center approach to a profit-center approach in an effort to improve the bottom line, and as a result, we have seen the organization transform from a back-office function to a front-office business function, including representation at the executive level in the organization. Different companies have gone through this evolution at a different pace, depending on the market segment, the customer, and the competitive environment.

In discussions with our customers, we see a trend again developing toward integration of all customer interaction and a broadening of functions that deal with all customer aspects. Depending on the market segment and the products you bring to the market, there are significant differences in approach, but I think we can gain a lot by looking outside our own market segment and learning from other approaches and services. The software industry has been developing products to support this trend, and the CRM functionality is really maturing today.

A Little History
A lot of companies have evolved over the last decade from a pure hardware services offering, sold to the customer via multilevel service agreements or on a time-and-material basis, to a more proactive approach with the customer. The focus has been evolving toward developing more long-term relationships and partnering with the customer to achieve an optimum between cost and perceived value.

This required a change in our internal organization and attitude, and as a result, we have seen a transition from the pure technical environment to a business environment and a marketing function to develop the services, increase the sales, and improve the perceived value from the customer.

At the same time, the mix between hardware and software, along with the increased complexity of operating the high-tech equipment, created new challenges in the delivery of services. Based on the symptoms the customer is describing, it sometimes is hard to determine whether the real problem is a hardware, software, or operational issue. This required a multifunctional approach to providing services in a responsive, professional, and cost-efficient way. Remote diagnostics and knowledge-based systems to determine quickly the root cause of the problem did help with this issue, and most companies have implemented these tools.

In addition, we have seen most customers go from buying equipment to buying solutions, which increased the need for customization and the development of professional services to deliver what the customer wants and needs.

This has brought us to the level where most companies are positioned at this moment-a palette of services and choices for the customer that meet the demand and create a good business opportunity.

The Next Wave
Especially in a high-technology, complicated environment, we see a trend in the development of long-term partnerships with customers, beginning with the initial contact by the sales force. However, this requires in-depth expertise to develop customized solutions early in the sales cycle, regardless whether this is at the equipment, software, or financing level. The focus is on the customer solution and integral cost.

Pricing models reflecting life-cycle pricing have been developed along with financing structures. As a result of this, the classic boundaries between marketing, sales, and service are disappearing, and the overlap between the business functions is obvious. Meeting your customer expectations will require a team approach.

This dynamic model continues during the rest of the life cycle and is a great opportunity to retain the customers. Critical, however, is your company's ability to react and deliver on the customers' needs. We foresee that this trend will continue in most segments of the market and will be crucial in your competitive situation. The company that is the most responsive and flexible will beat the competition, as long as promises are met and delivered on time at an acceptable cost.

Impact on Your Organization
Unless your organization is very large, this trend will have an impact on the service organizations in the following main areas:

  • Sales support and solutions development. This will require different kinds of expertise and skills. During the sales cycle, a team needs to develop a solution for the customer, sometimes even from the perspective of determining the actual customer needs. This not only requires sales skills, but also analytical skills and technical expertise to minimize the risk and create the right expectations. Most companies that are in this situation have developed a professional services function that can work with the sales force on a project basis.
  • Integration between hardware, software, and application support. The complexity requires a customer-responsive setup that can deal with almost every situation. Remote access tools and knowledge-based systems will help, but human interface and the ability to understand the customer environment will remain critical. With the improvement of automation systems and their increased functionality and integration, an immediate front-line response with the right level of expertise rapidly is becoming the standard. Front-line self-help functionality over the Internet will become the primary channel in the future, and it needs to be tied into the automation systems.
  • Integration of customer service, especially in an environment in which consumables are used. This aspect has to be integrated into the total customer-care approach. One channel contact and first-rate customer assistance will become critical, and ease of use will become the norm. In this area, the new technology and integration between information systems and communication channels will prove to be crucial and will require good integration knowledge from your IT department to avoid the classical finger-pointing between these functions if a problem arises.
  • Customer-relations skills. Each person dealing directly with the customer needs excellent customer-relations skills. This is a shift from the traditional approach, where the emphasis was more on the technical skills. With the tools available, the decreasing failure rates, and a proper escalation procedure, your field people need to focus on the right mix between technical skills and customer-interaction techniques.
How to Move Forward
Depending on where your company currently is positioned and what your exact customer environment is, you might be in this transition stage at this moment. However, when you see an increased need for sales support and increased interaction with other business functions, you might want to take a step back and rethink the business model in which you are operating. We advise the following steps:
  • Develop the strategy based on customer requirements and the competitive environment. Both might require research, and together with our partner, Strategies for Growth, we have carried out several of these projects.
  • Rethink your business processes. The new requirements will necessitate different and more integrated business processes and, as a result, different system and organization requirements will be generated.
  • Evaluate the existing organization. Based on the skill sets necessary to operate in the new environment, an assessment of the existing organization will create a gap analysis and a training plan.
  • Get help. Sometimes external help will accelerate the process and shorten the learning curve and, despite the initial investment, usually will prove to be cost-efficient, both from a development and an implementation point of view.
Although every situation is different and dependent on the market you are in, the above-mentioned issues might not all exist, but it is food for thought. We have seen these trends in different segments of the services industry, and they might be applicable to your situation. It is our belief that it never hurts to look for new ways to improve your competitive situation in this highly competitive marketplace, and this might trigger some ideas for change.
Leo A.P. Moerkens is president of Hands-on Management Consultants, Inc., an international management consultancy with offices in the U.S. (Oxford, Connecticut) and Middle East (Cairo, Egypt). It focuses on mid-size, high-tech companies and assists them in developing and implementing business improvement programs. Leo can be reached at 203-888-1671 or LMoerkens@aol.com.


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