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Don’t Crash at Critical Intersections of Customer Support
Cruise through with effective supply chain management.
Posted Jul 9, 2009
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At the intersection of the customer support supply chain (CSSC) and the customer support experience, three critical deficiencies often emerge, leading to the business wrecks of lost customers and reduced profitability. These problems result from a historical focus on logistics and processes for product movement without sufficient attention to the CSSC itself. This focus fails to recognize that the customer experience can have a big impact on both revenue growth and profitability.

The three critical deficiences are:

  1. A mismatch between the customer value proposition and the profile of the CSSC.
  2. A broken capability within the CSSC to deliver the targeted support experience.
  3. A disconnect between the CSSC and product development in responding to customer issues on a timely basis.

Match the Customer Value Proposition with the Supply Chain Profile

It's important to identify different customer segments -- and the value each segment represents -- and then configure the supply chain to deliver the appropriate experience to each one. Some customers generate much higher profit than others, which can warrant special customer support offerings focused on an excellent experience. But companies often make the mistake of focusing on cost savings for such high-end customers, resulting in support that does not meet customer expectations.

A large financial services software company found this to be the case when it outsourced to India the application support for its highest-value professional accountant customers. Competitors quickly capitalized with marketing claims emphasizing 100 percent domestic support. Recognizing the strategic blunder, the company responded by investing in high-caliber domestic support.

When it does makes sense to outsource support, it's crucial to select suppliers that are aligned with your values and strategic direction, and located in geographies with inherent capabilities suited to the targeted customer experience. Failure here guarantees customer disappointment.

Deliver the Desired Customer Experience

A well-designed CSSC is the beginning; efficiently delivering the targeted customer experience is next. This requires establishing the right framework for managing supplier relationships, starting with the development of clearly defined, shared success criteria.

The contract structure must provide the right incentives and appropriate cost controls, yet be simple to manage. Furthermore, the terms of the contract need to support the shared success criteria. Any mismatch here will undermine the goals of the relationship.

A clear and effective governance structure is also essential. Designated representatives of each functional area from both the company and the supplier need to work closely together in defining mutual goals, processes, and operating mechanisms. Both sides should appoint a single point-of-contact for the relationship, with an ability to earn mutual trust and the business maturity to navigate complex issues. Special attention should be paid to defining escalation paths for resolving issues that may arise during the course of the relationship.

The rigor of ongoing joint performance management then follows. Relentless focus on the details of execution, with an emphasis on key performance metrics derived from the shared success criteria, is the foundation for efficiently delivering the targeted customer experience.

Engage Product Development

In today's world -- where even a small number of disgruntled customers can do costly damage through user communities, social networking, and the blogging power of the Web -- customer support and product development need to be joined at the hip. (How many companies, for example, could tolerate the grudging adoption seen by Microsoft Vista?)

Customer feedback, provided in a timely and useful manner, must be a key ingredient in product development. Visibility into the relative priority of customer issues enables the appropriate allocation of resources to ensure the most-important problems receive the most-urgent attention. In turn, customer support personnel need to be informed of the plans to remedy problems. How else can they reassure customers of pending solutions?

Customer support should also have a strong seat at the table for next-generation product-development planning. Support personnel often have the deepest understanding of the customers, and thus are best equipped to provide proactive visibility into new-product opportunities or unmet customer needs that may otherwise go unnoticed.

Road to Success

Configuring the CSSC profile to match the customer value proposition, establishing the capability of the supply chain to deliver the targeted customer support experience, and engaging product development with customer support are keys to building customer intimacy and loyalty. The resultant success will enable businesses to avoid the wrecks of lost customers and reduced profitability...while competitors grow ever-smaller in the rear-view mirror.

About the Authors
At The Results Group, a management consulting firm focused on leveraging operational strategy, design, and execution for exceptional customer experience and shareholder benefit, Bill Schneiderman (bills@resultsgroup.com) is the chief executive officer and Bob Berger (bobb@resultsgroup.com) is a senior consultant.

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For the rest of the July 2009 issue of CRM magazine please click here.

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