You land a big sale. The product or service delivery is complete. A few weeks later, you meet with the customer. Much to your surprise, they are dissatisfied. What happened?
Nick has ordered a circuit board tester. It is rated at testing 2,000 units per hour. After installation, the new tester is operating at 1,500 units per hour. Nick is behind on delivery orders. He has contacted your tech support and they have not uncovered any issues with Nick’s circuit board or the tester. He has shipped a board back to your office and the engineering department are getting the same results.
Your tester has broken the number one rule in customer satisfaction:
When expectations match reality there is satisfaction. When expectations are not met, there is dissatisfaction.
Strategic Account Management and Satisfaction
From an earlier blog, there are four or more major Points-of-Contact (POCs) in the buying process:
· The User - wants to make their job simpler.
· The Manager – is interested in job security, accolades, KPI and avoiding disruption.
· The Decision Maker – wants to know the value proposition (lower cost, remain competitive, increased efficiency).
· The Buyer – wants to understand what is being purchased, Terms & Conditions (the fine print) and payment terms.
· ALL – want promises to be fulfilled.
Each POC has expectations that were created by you, your company or your competition. Now, they are owners. Once expectations are set, they must be met at every POC level. When they are not met, there will be dissatisfaction.
Nick’s case actually happened! After a meeting, the solution was to ship a second tester at no charge. Nick agreed to pay a per unit charge for each device in excess of 2,000 per day. Nick’s orders quickly rose to 3,000 per day. Nick was very satisfied and he paid an extra fee for the 1,000 unit overage. It was a win-win.
The Customer Service Handoff
During my tenure with a large company, we determined that customers that are dissatisfied with the buying process tend to stay dissatisfied. The trend today is to turn an account issue over to customer service for resolution. The problem is that customer service does not have any history with the customer outside of what was purchased, the terms - and, in some cases, their Customer Resource Management (CRM) records.
So, customer service if left to resolve issues that were created during the buying process. Worse, many companies drive employee compensation and bonuses by their Net Promoter Score (NPS) that gauges the loyalty of a firm's customer relationships. Dissatisfied customers tend to be disloyal.
Turning a disgruntled customer over to customer service for resolution is like taking an angry child to someone else’s house for the same reason. It is just wrong!
So, what should you do to turn a dissatisfied customer into a loyal account? Before starting, you need to realize that all satisfied or dissatisfied customers are not created equally. The best tool for simple analysis of the customer’s satisfaction or dissatisfaction is a 2by2 matrix.
The 2by2 Matrix Tool
The 2by2 matrix’s creation is attributed to Bruce Hendersen, Boston Consulting Group’s (BCG’s) founder, in the 1970s as a simple four quadrant tool to support business decisions based on the extremes of two co-dependent business criteria. The extremes are “high” and “low”. (see Fig. 1)
Today, the 2by2 matrix is a common business tool used for decision making.
· The upper left quadrant (High/High) is most desired. The values of both criteria are High.
· The lower left quadrant (High/Low) has areas of concern. The value of Criteria One is High but the value of Criteria Two is Low.
· The upper right quadrant (Low/High) has areas of concern, too. The value of Criteria One is Low but the value of Criteria Two is High.
· The lower right quadrant (Low/Low) is most problematic. The values of both criteria are Low.
The Simple Criteria for Customer Satisfaction
At any given time, a customer will be “satisfied” or “dissatisfied” (Criteria One) – and, commitments during or after the purchase were either “met” or “not met” (Criteria Two).
Sally sells her company’s website builder software to Flour Bakers. Flour Bakers hosts cooking demonstrations. Once installed, Flour Bakers learns that their website events page will not synchronize with their CRM software. Every attendee’s on-line registration requires double entry.
Sally had overlooked the need for Flour Bakers to integrate with incumbent platforms. Sally never promised that the software would integrate. Flour Bakers had met with many of their competitors during the buying process and integration was not an issue for others. Flour Bakers is very dissatisfied.
What should Sally do next? She delivered her platform as advertised.
The Customer Satisfaction 2by2 Matrix
The simplest two criteria for Performance Analysis are the “Customer” and “Expectations” (see Fig. 2).
Once you have placed the customer in the matrix, the account management actions are shown below (see Fig.3).
It is important to remember that a mature customer can shift quadrants quickly when new products/services are delivered, competitors walk through the door with new expectations – or, POC’s change. When this occurs, revisit the matrix for resolution.
Taking Action in Each Quadrant
Satisfied and Expectations were met: Sell More. This seems obvious – but, many companies set Key Performance Indicators (KPIs) for the salespeople based on the number of new customers visited. Perhaps, companies should consider new opportunities with existing accounts equally. A new quote to an existing satisfied customer should have a much shorter sales cycle and greater chance of continued satisfaction.
Satisfied and Expectations were met not: Review. Even though a customer does not complain or has a log stand history with your company, unmet expectations will catch up with you. Late deliveries, requests for Returned Material Authorizations (RMAs) under warranty, unexpected additional costs and other issues that arise after an order is placed will affect your customer’s loyalty. This is especially true for “recurring revenue” customers. They have a contract. They write a check every month. Ongoing issues can be frustrating when making the next payment.
Dissatisfied and Expectations were met: What is Missing? Sometimes new customers are simply a bad fit. A purchase is made without the customer getting approval internally. The initial customer training when well but the customer has high employee turnover. Now, the buyer has their job at risk and you are the scapegoat. The best defense is a good offense. Find out what is missing.
Ample Tracking had purchased dual-band antennas to save costs over their current two antenna solution. The dual antenna requires a longer cable. After shipping hundreds of units, Able Tracking starts getting coverage complaints and want to return all of the cables. Rather than ask customer service to defend the quality and performance of your antennas, our company sends an engineer, Chris, to investigate the problem. The engineer asks to visit a customer that is having coverage issues. When the engineer arrives at Able Tracking’s customer, Chis notices that the installer wound up the extra antenna cable length tightly. The cables were damaged.
By going on the offensive, Able Tracking’s problem was fixed. The following is an excerpt from the October 13,2017 issue of INC Magazine.
“In a world filled with rules (and annoying things we need to struggle to figure out), your customers don't need more procedures, regulations and admonitions. What people want most is a friendly helping hand to help them solve problems and get stuff done. If you provide that, you're sure to get and keep your customers' loyalty.”
Dissatisfied and Expectations were met not: Escalate. There is a simple solution to resolve issues with a dissatisfied customer when promises are not met: ESCALATE the problem to a company executive. This action accomplishes two things:
(1) Validates that the selling process was completed correctly or uncovers missed steps that can be corrected before the next sale – and,
(2) gives the customer confidence that their issues are being addressed. Executives have access to more internal resources as well. Sometimes a new customer is just a bad fit. Their management can be unreasonable. They can lack the required internal resources to benefit fully from your product or service. Oftentimes, they can have unreasonable expectations.
Customer Retention and the Postmortem
The Customer Satisfaction 2by2 Matrix is not a replacement for Customer Service, NPS scores, surveys or many other customer retention tools. These are continuous initiatives that are valuable to any successful company. The Matrix is a quick evaluation tool for use by customer facing staff evaluating the real-time satisfaction of a customer to have a guideline for taking action.
The overall goal is to have a high level of customer retention. The cost of acquiring a new customer is several times more than the cost of keeping an existing customer. “Churn” will happen. The most valuable action that a company can take is understanding why a customer is lost. Did they go out-of-business? Did you lose the account to competition? Did the customer no longer need your product or service internally? Is there a new technology or feature that makes your product or service obsolete? Did you even know the customer was lost?
Ample Tracking has 100,000 active units installed in vehicles. They bill their customers each month. Ample Tracking’s engineering department has a database that monthly registers each active unit on their network. The database is used to balance their network loading. When Able Tracking compares the engineering database to billings, they find that there are 108,000 active units hitting the network. Customer’s contracts had lapsed – but, the units were never turned off!
Customers will be lost for various reasons. The key is to know why and attempt to make a recovery – or, at least, avoid losing other accounts for the same reasons.