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Advice for distributors about customer service

by Joan Adams

We are all customer service experts. Every last one of us has had some kind of customer service experience in the last few days. And being human, we remember bad experiences with much more detail and passion than we remember good ones. Even when the product is good, even excellent, a bad customer service experience sends us running elsewhere the next time we want to buy. If you don't believe me think about your last terrible customer service experience. Did you tell everyone about it? (Yes). Will you go back again? (No – unless there is no alternative).

Industrial supply is a pure service business. Supply houses don't "manufacture," they order, stock and supply materials such that these materials are right at hand when the customer wants them. Distributors are careful in their ordering, stocking and delivery. They make sure they have the right inventory levels on hand, they chart delivery routes that enable fast and proper delivery on a daily basis. Yet for all that care, somehow they often forget about the human side of the customer interface.

I am constantly surprised at the indifference (and worse) in the handling of the communications and administrative side of the customer relationship.

Let's start at the beginning
What is customer service? Typically, a customer buys services from a company simply because that company has the skills and the equipment required to perform those tasks better than the customer. It's why we go to restaurants (I can assure you, they cook better than I do), it's why we have computer techs solve our IT problems and it's why we send our clothes out to dry cleaners. It is the simple admission that we are not experts at all things – and when it is cost-effective and convenient – we will readily turn to others to perform those tasks. There is a cost trade-off imbedded in the service relationship. Basically the service proposition is this: As soon as performing some task costs me more time and dollars to do myself (and to do it poorly) than to farm the task out to a service provider, I will go with the service provider.

But there's a corollary: as soon as that service becomes too expensive (in money or time) I will do it myself or find another service provider.

What does the industrial customer want? He/she wants product in a timely fashion and wants information. Industrial distributors are brilliant at the first. That's their core talent but they are surprisingly bad at the second part.

It is astonishing to see the range of performance in how companies handle information. Some companies (Lands End comes to mind) know my name when I call. Within a few clicks of a mouse the folks at Lands End are looking at my order history and asking me what can they do for me today. Other companies (Chase Bank comes screaming to mind) have an assortment of 800 numbers on my mortgage statement (none of which, when I call, can handle my questions about my refinance). Each call center operator puts me on hold to suffer truly bad Muzak for a long time before reiterating how they can't help me. It's some other department and they can't give me a name or transfer me. Instead they give me yet another series of 800 numbers and I get to repeat the process. Believe me, as soon as I can pry my mortgage away from Chase, I will.

Which of these stories sounds most like your operation? Probably neither, as I picked two extremes. Your company is most likely somewhere in the middle, which isn't good enough. Competition is a serious problem for all service companies; there's always someone else who offers a similar range of products and services. There's at least one company in your region that carries the same products. It should be small comfort to think that same company offers the same "fair to middling" customer service. It is fairly easy for a disgruntled customer to defect to another distribution house.

What information do customers want?

• They want to know availability. (Are the inventory levels of a given product sufficient to meet his/her demand?)
• They want to know where their order is. (Is it on the truck? Is it waiting for a part? Is it being picked?)
• They want to know pricing. (What is the mark up?)
• They want to speak to their inside salesperson.

 

Inventory: Why is it that so many companies cannot answer inventory questions in a timely fashion? Is it that they just do not know within any degree of confidence? People should not be running to the warehouse madly verifying counts. Inventories should be accurate and ready to be read off a computer screen. Availability questions should be answered in the time it takes to make a few mouse clicks. Make the customer wait and you are asking for him to shop elsewhere.

Delivery: This is a little trickier. Still, the customer wants to know when his order will arrive at the dock. You know if the order is on the truck or still in the warehouse. If you are waiting for a part, now's the time to offer partial shipment.

Pricing: The warehouse markup has been treated like a trade secret for decades; now, finally, the jig is up. Your customers can surf the Web, collect quotes from a jillion sources, including manufacturers. In short, they know. Don't treat them like idiots. Explain your pricing scheme. Better yet, explain how volume discounts work to their favor or how once-a-week (instead of daily) delivery will lower the markup. An educated customer can make rational decisions about what they want to pay for and what they don't. When you are up front about pricing you have gone beyond "customer service" and have started to build the customer relationship. And for the customer who wants to squeeze every last dime out you? You didn't want him anyway; send him to a competitor.

Inside Person: Regular customers like to speak to the same person. They want the feeling of continuity, that someone is paying attention to them, following their order, looking out for their best interests. Don't make customers go through a receptionist; allow them to contact "their" person directly.

These are all small steps to improving the customer experience, but to my mind they still involve too much human intervention. There are times that only speaking with a human will do – but for many other cases – customers won't call to ask the questions if they already have the answers!

Availability: Allow regular customers access to the inventory database online; let them see for themselves what's there.

Order Tracking: E-mail the customer when the order is picked. E-mail again when it is on the truck. Call them if there is a problem (don't wait for them to call you).

Pricing: Post pricing policies right on the Web site.

Inside People: Post the names and phone numbers of all inside salespeople along with each one's specific expertise.Once customers realize they can access most of the information they want themselves and that you will keep them informed of any problems or changes, they will be happy, they won't be jamming the phone lines with questions and you won't waste their time making them listen to bad music while you scurry about finding the answers. Now, that's customer service.

Joan S. Adams has consulted for industrial clients for more than 20 years. She operates Pierian, a consultancy that brings sustained and measurable success through operational excellence, customer focus and competitive market strategy. She has engineering degrees from the UW-Madison and MIT. E-mail her at adams@pierian.net.

This article originally appeared in the March/April 2011 issue of Industrial Supply magazine. Copyright 2011, Direct Business Media.

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