One of the Business Mastery cornerstones in the ActionCOACH toolkit is Delivery. We work with businesses on how to deliver a level of service slightly better than Customers expect. So why don’t we work to build a Customer Service level that is way above anything that any reasonable customer could want? Well, sometimes we do, but only where it’s appropriate.
Imagine you’ve just ordered something online. Let’s say it’s something you’ll need in a week’s time. You’re probably not wanting to have to pay for same day delivery if it costs you an extra £15 when delivery in 2 days’ time is free. A 2 day delivery will be fine for what you need. If your item then turns up in 1½ days, you’ll be happy. If it turns up this afternoon, you won’t be any happier but if it turns up in 4 days, you’ll be unhappy (even if you don’t need it yet). If the supplying business sets up to deliver everything ‘same day’, someone somewhere will have to pay the extra £15, whether they know it or not. Either the customer pays with higher pricing than necessary or the supplier pays by cutting their margin. Whichever way that is, unless you’re the courier company, you’re paying a premium for a service you don’t need.
On the other hand, let’s say you need the item urgently. The company that can do same day delivery is likely to win that order, even if there’s an additional charge. There’s a value to the customer in a swift response and the customer will be happy to pay, as long as the supplying company fulfils their part of the bargain and actually delivers the item on time.
In each case, the buyer has formed expectations of the seller. If the seller performs well against those expectations, they have a happy customer. If not, the customer isn’t likely to come back again.
So your business’ Customer Service level has to be consistently good enough to keep customers happy and returning to buy from you again and again.
Whilst this may seem fairly basic in terms of a concept, how many buying experiences have you had in the last week that have failed to deliver against your expectations? If you’re like most people, probably quite a few. So whilst it’s basic, not many companies can get this right time and time again. The ones that do become the masters of their sectors (think Amazon in the example above).
This applies no matter what sector you work in or whether you supply consumers direct or other businesses. Serving your customers slightly better than they expect (consistently) is one of the surest routes to sustainable business growth you can get.
So how do you go about doing that with your business? You can start by setting out exactly what service level(s) you want to offer that you think your customer base would want. This doesn’t have to be gold plated every time by the way. There’s room for a Ryanair in every industry. Bear in mind that there are costs to increasing levels of customer service and what you’re looking for is that balance of cost and value that gives the customer a great experience and enables your company to make money.
To do this, you have to understand your target customer base. What do they need? What do they want? What are they prepared to pay for and what not? Once you have this you can set up your offer and the pricing around it.
Using the 2 examples we already mentioned you can see how this works.
Ryanair sells cheap flights and consistently ranks among the most punctual short haul airlines in Europe. They have also hit the headlines for their approach to customer service which seems to be “follow the rules and you’ll be fine, don’t and we’ll charge you a lot”. When you book with Ryanair you also know that if anything goes wrong, all you can expect is the minimum mandated response. Ryanair is also one of the most successful and fastest growing airlines in Europe. So their offer (cheap & mostly on time) is enough to offset their lack of frills or customer service. Ryanair understands its customer base and makes an offer which is compelling (whether you like it or not). The only choices you get are the ones they want to offer you (and charge you for). But it works.
Amazon is different. They give choice – a trade-off of delivery speed vs price in a lot of cases. A huge range of goods and sellers. A subscription model that their customers really value. A returns policy that is extremely customer friendly. And they do what they say they will, with updates and information to see that it’s really happening. I can’t remember the last time an Amazon order was late. Amazon’s margins are slim (approx. 4.7% and similar to supermarkets in Q1 2024 excluding Web Services) and they’ve invested a huge amount of money in infrastructure and customer service capability. But it works.
The common thread with both of these examples is that they have actively designed their customer offer and experience to fit their target market and they focus on their designs with absolute clarity and consistency. Everything each company does (even down to Michael O’Leary’s more controversial statements and press releases) is consistent with the offer and customer experience each company wants to deliver. There is no compromise either way. As customers we know exactly what to expect and it’s delivered every time, good or bad. You may or may not like these companies, but I’d bet that most of you reading this have bought from both in the recent past.
So what is your business doing to understand your target market, define your customer service offer and focus on delivering it consistently every time? Take a look around you over the next 3-4 weeks and see what examples of good and poor customer service experiences you get. If you can understand the relationship between those experiences and the expectations you had of them in the first place, that may help you to build your own business’ customer experience.
