Quality is not infinitely scalable

Scalable was a word introduced in the Information Technology world but it raises some interesting questions in applying it in other contexts.

In IT it is a popular buzzword that refers to how well a hardware or software system can adapt to increased demands. For example, a scalable network system would be one that can start with just a few nodes but can easily expand to thousands of nodes. Scalability can be a very important feature because it means that you can invest in a system with confidence you won’t outgrow it.

Now we see it applied more generally to a company that many customers would rate very highly for customer service. Toyota Failure Proves Quality Isn’t Scalable.

A small operation can bootstrap itself into a medium or even a reasonably large company, via either organic growth or acquisition, and still maintain the quality which was the basis of its initial success.

At some point, though, whether you’re talking an automaker or a technology firm, size breeds insularity, which in turn fosters risk aversion. I haven’t even mentioned the corner-cutting mentality which occurs when making numbers becomes a (the only?) priority.

The author, Alexander Wolfe, points out that in the more open world created by the Internet, the quality stakes are very much higher.

Toyota might not have so fortunate a fate, and thus a swifter fall, because we now live in Internet time, where seismic shifts occur in timeframes too tiny for rational thought to stop that Twitter/Facebook/Cable TV train from running the business off the metaphorical track.

I believe the author identifies exactly why this problem occurs.

It’s true that the scalability doesn’t seem to be a limiting factor for manufacturing, per se. It’s not the manufacturing which is at fault in the Toyota crisis. It’s a management failure brought on by an inherent inability of human beings to scale up, beyond a certain point, the social interactions which grease the wheels of a smoothly running society. (And, in a very real sense, a company is a society writ smaller.)

The real reasons for the Toyota problems have yet to be pinned down, however a clear message is that Toyota was not willing to accept that customer satisfaction is determined by the customer. Undoubtedly the final bill for Toyota will be very much greater than if they had accepted that if a single customer is dissatisfied, you have to make it right. Of course there is a very small proportion of the population that are never satisfied. However unless you do as much for them as most people would accept is right and fair, then you may well be storing up problems for yourself.

Insularity is not an acceptable or justifiable company trait. There must be full two-way communication that both parties find acceptable. Setting that up and providing adequate resources for that is not somehting that is easily scaleable. However the hoped-for economies by providing less than satisfying customer service are completely outweighed by the market penalties when customers feel ignored.

On a personal note, I have been a most satisfied customer of Toyota for many years and will gladly pass on the word to friends and acquaintances. However my voice and the voices of other satisfied customers are lost in the huge noise created by those who it would appear have reasons to claim that Toyota just did not listen.

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How Businesses Can Survive The Recession

Nuclear Winter and Surviving This Recession sounds exactly like the advice that most companies need given the gloomy situation all around.  This is a time for making sure that you are running the best business possible. 

As the recession starts to pummel Silicon Valley and as layoffs pile up, organizations are saying, ‘what is the absolute nuclear winter? Let’s plan for that.’ What you’re seeing now are organizations putting those plans into reality.

That may involve rethinking your business model.  That is exactly what Kevin Kelly, CEO of executive search giant Heidrick & Struggles has done as explained in a Business Week article:

Over the next five years, Heidrick & Struggles will change its strategy dramatically. While executive search is currently more than 95% of Heidrick’s business, search will shrink to 50%. Leadership advisory services will expand to roughly 40%, and developing new technology tools for consultants and clients will become the remaining 10%.

A number of people are coming out with checklists and interestingly that business model revision is at number one in a Small Business checklist from Los Angeles.  Here are the Top 10 survival tips they recommend.

  1. Revising the Business Model
  2. Reducing Employees or Work Hours
  3. Cash Flow Issues
  4. Efficiency and Reducing Bills
  5. Taking the Offense by Marketing
  6. Customer Service and Incentive Discounts
  7. Partnerships and Alliances
  8. Seeking Professional Advice
  9. Watching Key Indicators
  10. Staying Healthy and Positive

There are some similarities with another list that the BBC put out only a month or two back on How small firms can survive recession.

  1. Don’t panic.  Get the facts
  2. Work out where you can make savings.
  3. Are you spending on things that don’t make a real difference
  4. You can save money with energy efficiency measures and reusing and recycling.
  5. Maximise your productivity.
  6. Know who your competitors are and what they’re up to.
  7. Cutting prices isn’t the only way to increase demand. Can you make your product more attractive without a lot of extra cost?
  8. Don’t forget that not everyone will spend less and those who do may cut back on other products and buy yours instead.
  9. If you’re lucky enough to be able to invest, get ahead of the game for the upturn.
  10. You do have to make sure you get paid on time or your cash flow will suffer
  11. Is there as much money in the bank as there should be?
  12. Stop using expensive advisers and use the free services available

It is interesting that companies are encouraged to see how they can beef up their services to clients so as not to lose revenues.  If the competition in fact is not doing this then this creates an opportunity for a real competitive advantage

Part of this thinking involves customer service and according to a survey from the Institute of Customer Service (ICS) the Recession is ‘boosting customer service levels’.

With consumers seeking value-for-money products and services, companies are making greater efforts to impress their customers, keep them happy and prevent them slipping into the clutches of competitors. With satisfied customers much more likely to return and remain loyal, good customer service is vital to survive the recession

It is essential to stay on top of all these issues.  There is a good deal of work involved in these checklists. However stay optimistic and perhaps  this may be the time when you can steal a march on your competition..

A Cheap Marketing Tool

I think Pattie Simone has exactly the right message in her article about A Marketing Tool That’s Obvious, Overlooked and Cheap.  As she says, Use superior service as a thrifty and effective in-house marketing mechanism.

While many entrepreneurs are scrambling to attract new business, some have discovered one of the easiest (and least expensive) tools to keep their sales engines humming: holding on to current patrons through superb customer service.  When you weight the cost of attracting new clients vs. the cost of keeping the ones you have, superior customer service will beat most any ad campaign on ROI.

It was unfortunate that the article uses pop-ups like this:

Cheap Marketing Tool

These particular ones are cheap, very obvious and almost impossible to overlook.  Indeed for a few seconds you can only move them and not make them disappear.  Why do the marketers of Resource Nation use such push marketing, intrusive methods.  They will alienate most prospects and are hardly in tune with the spirit of this article.

Customers Speak Out In The Internet Age

We Know Your Call Should Be Important To Us.

This blog post is a follow-up to a recent article, Customer Service, New Marketing in the Internet Age. The article was addressed to business owners to remind them that the world has changed dramatically. Customers are now in control. The Internet gives customers new information and powers. This post is one place where you can exercise that power. You can add a comment if you found a company particularly poor on customer service. Equally if you found a company particularly good on customer service, then why not proclaim it to the world.

In the past people were sometimes reluctant to complain to a company, since problems were often not resolved by talking to the company. Now there is an alternative: you can talk to everyone out there. People do that in a variety of ways. For example on the recent opening of competition to the Canadian cell phone market both the Globe and Mail article, Cell phone giants lose stranglehold, (now behind a subscription wall) and the CTV article, Ottawa’s wireless auction could cut cell phone rates, each received scores of comments in very little time.

If you do a Google search for poor customer service, you can quickly confirm that customers are speaking out. Sometimes it’s in their own blogs and sometimes it’s via surveys. Here are some of the relevant links. Some of them are now some years old but they still timelessly signal someone’s discontent:

The rapid growth of social media such as Facebook means that the word is passed even faster now. It’s a customer revolution. If you’re not happy, or if you’re elated, then pass it on by adding a comment here.

Customer Service From Telecommunications Companies

Customer service should be a key department. It’s where potential customers, or prospects, may get their first impression of the company. It’s also where existing customers may confirm that they have bought from the right company or may get disillusioned. Surprisingly it’s often at the bottom of the totem pole.

You would think that companies in telecommunications should be the best examples of how to do it well. Tom Fishburne was so affected by his experience that he drew a cartoon about it. Yes, customer service can be a joke.

On the other hand, Shep Hyken, an expert in customer service, finds one of his clients is doing customer service as it should be done.

I had the wonderful opportunity to work with Verizon Wireless and their call centers. Their goal is to answer the phone within a surprisingly short period of time, and they usually do. That strategy, along with a focus on “one call resolution” helps create loyal customers. Why? Because, they create a pleasant experience, which creates confidence, and ultimately can lead to customer loyalty.

Freelance writing

I hope you enjoyed this article, which is seen by many appreciative visitors. Part of that comes from its visibility in Google keyword searches.

If you would like to have quality articles like this on your website, then my services as a freelance writer are available to you. Click here for more details.

Barry Welford

How can customer service from telecommunications companies so often be so bad? As Kim Stevenson recounts:

The American Customer Satisfaction Index numbers for 1Q07 were released May 15th. The punch line for telecommunications companies is: cable and satellite TV customer satisfaction remains low. Wireless carriers are improving and at an all time high but remain one of the lowest scoring industries.

Related: Your Call Is Important To Us – Roberto Rocha

Customer Service Needs Tough Love

Good customer service grows sales.

Customer Service is one of the most important functions in any company. That is where you get the reality check on how good the products and services your company provides really are. That’s the central theme of an article in the April Newsletter from FreePint. If you don’t read the FreePint monthly newsletter, I would highly recommend it. This article is entitled, “Tough Love: Excelling at Customer Service Is Not Just One Big Happy-Clappy Hugfest“, and it’s written by Robbie Frazer of Prenax.

It’s an excellent read, but a short quote will give you one of the themes:

Customer service was all about being warm and fuzzy, peopled by friendly types who wore distressed jeans at client meetings and drank carrot juice for breakfast.

That’s the storybook idea of customer service, and it doesn’t work. Sometimes, treating your customers right hurts.

My point is that there are rock-solid reasons why a company should champion its people, really care about its customers and create a culture where customer service is central to everything. And those reasons are not all joss sticks and dungarees, but hard business motives that sometimes need very tough decisions to be made: to create this service culture where people take pride in their customer relations and generally seem to be enjoying work takes some effort.

Frazer also gets into the topic of the oh-so common tendency of trying to cut costs on customer service. That reminded me of what the old farmer said about his mule. “I was teaching my mule to live on less and less food. He’d just about learned the trick when he upped and died.

In this Internet age, the customer is even more in control than ever. Some companies realize that and are giving better service. It’s a way of developing a competitive advantage since the majority of companies are into the cost-cutting mode. Surprisingly some of the worst at providing customer service are the telephone companies. Just think of your own experience. Having to key in your account number and then repeat it to a human agent is all too common. They should be experts in handling voice communications.

Luckily help is now available. Intelligent Voice Response (IVR) from companies like Crimsonet can handle your call as well as the best-trained customer service representative. As it happens, it’s cheaper as well but the main driver will certainly be the improved customer service that results. It’s so much better than the (un)Intelligent Voice Response that some people encounter.