Comments on: Would Your Business Thrive if You Only Served 70% of Your Customers? http://www.kristinaevey.com/customer-service/would-your-business-thrive-if-you-only-served-70-of-your-customers/ Improving Customer Service & Training Fri, 06 Jan 2012 08:01:12 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Kristina Evey http://www.kristinaevey.com/customer-service/would-your-business-thrive-if-you-only-served-70-of-your-customers/comment-page-1/#comment-225 Kristina Evey Tue, 12 Jan 2010 15:46:19 +0000 http://www.kristinaevey.com/?p=201#comment-225 Very good points, Barry. I completely agree with you. There is a concept of "Top Grading" your staff, and I think this is what you are referring to as well, except it would be "Top Grading" your customers. We do want to serve our best customers with our best service consistently. It becomes difficult to do this sometimes when we are tied up with customers who are not the lifeblood of our company, but seem to occupy more than their share of resources when the return on investment is negligible. For the majority of businesses that are dependent upon their current customer satisfaction levels and do actively recruit new customers, I think that all customers should be treated well, no matter what. That being said, the better customers - those that spend the most with us and have engaged in mutually beneficial relationships, do deserve the better treatment, service, and attention. In the case of the IRS only striving for a 70% service rate, it seems to be somewhat of a kick in the teeth because we all are already their customers and they do need to serve us. Also, they need to expand the resources for the 30% who won't be able to get through by phone in order to get people the assistance that they need. Very good points, Barry. I completely agree with you. There is a concept of “Top Grading” your staff, and I think this is what you are referring to as well, except it would be “Top Grading” your customers. We do want to serve our best customers with our best service consistently. It becomes difficult to do this sometimes when we are tied up with customers who are not the lifeblood of our company, but seem to occupy more than their share of resources when the return on investment is negligible.

For the majority of businesses that are dependent upon their current customer satisfaction levels and do actively recruit new customers, I think that all customers should be treated well, no matter what. That being said, the better customers – those that spend the most with us and have engaged in mutually beneficial relationships, do deserve the better treatment, service, and attention.

In the case of the IRS only striving for a 70% service rate, it seems to be somewhat of a kick in the teeth because we all are already their customers and they do need to serve us. Also, they need to expand the resources for the 30% who won’t be able to get through by phone in order to get people the assistance that they need.

]]> By: Barry Dalton http://www.kristinaevey.com/customer-service/would-your-business-thrive-if-you-only-served-70-of-your-customers/comment-page-1/#comment-224 Barry Dalton Tue, 12 Jan 2010 14:25:13 +0000 http://www.kristinaevey.com/?p=201#comment-224 Kristina, I actually see this from a slightly different angle. I've been having conversations recently with several folks like Chris Reaburn and TweetCRM about the benefits of trimming your customer base to improve the experience for your best (and most profitable)customers, while improving the profit margin per customer. If you remember Verizon Wireless got a lot of bad press for 'firing' a small segment of their customers. I really have a hard time finding the problem in that. Customers speak with their wallets all the time. Why shouldn't there be an expectation of quid pro quo? Insurance companies chose to not renew policies of customers as standard practice if their actuarial models forecast that policyholder becoming a higher risk or cost to serve. We see evidence all the time of companies that, especially once they go public and are under pressure to grow from Wall Street, grow beyond their capacity to service their customers. Circuit City was one of the most recent. Instead of focusing on growing to the point of inevitable collapse, how about focusing on acquiring a few less customers, opening a few less stores, delivering a superior experience (which research shows consumers will pay a premium for) and enjoying above market profitability. I love to reference Wegmans grocery store as a model for this. They are a family owned company and control their growth. As a result, they are consistently in the top 100 companies to work for and tops in customer satisfaction. On the flip side, in that industry, I see Whole Foods going down the expansion path of destruction. They had a great, high profit niche. Now, investors are driving the company to dilute that value proposition in return for more and more stores. They have a place reserved next to Linens n Things in the growth graveyard, if they continue to pursue that strategy. Kristina,
I actually see this from a slightly different angle. I’ve been having conversations recently with several folks like Chris Reaburn and TweetCRM about the benefits of trimming your customer base to improve the experience for your best (and most profitable)customers, while improving the profit margin per customer. If you remember Verizon Wireless got a lot of bad press for ‘firing’ a small segment of their customers. I really have a hard time finding the problem in that. Customers speak with their wallets all the time. Why shouldn’t there be an expectation of quid pro quo? Insurance companies chose to not renew policies of customers as standard practice if their actuarial models forecast that policyholder becoming a higher risk or cost to serve.

We see evidence all the time of companies that, especially once they go public and are under pressure to grow from Wall Street, grow beyond their capacity to service their customers. Circuit City was one of the most recent. Instead of focusing on growing to the point of inevitable collapse, how about focusing on acquiring a few less customers, opening a few less stores, delivering a superior experience (which research shows consumers will pay a premium for) and enjoying above market profitability.

I love to reference Wegmans grocery store as a model for this. They are a family owned company and control their growth. As a result, they are consistently in the top 100 companies to work for and tops in customer satisfaction. On the flip side, in that industry, I see Whole Foods going down the expansion path of destruction. They had a great, high profit niche. Now, investors are driving the company to dilute that value proposition in return for more and more stores. They have a place reserved next to Linens n Things in the growth graveyard, if they continue to pursue that strategy.

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