Customers are Treasures, Goods are but Straw (Chinese proverb)

Surveying your customers is important, but what really matters is how you use the information

Customers have always been important, but in today’s tough economic environment retaining your good customers has never been more critical to success. The best way to retain customers is to give them what they want in a way that is better than your competitors. To do this you need to understand your customers, their buying behaviour and their levels of satisfaction. If they are not receiving value for money, or are unhappy with the service they receive they will not show loyalty to you and will switch to a competitor at the first opportunity.

As individual consumers we all expect (and receive) increasingly higher levels of service, these same expectations are transferring into the workplace. Regrettably, the same standards of service are not always available from building products manufacturers. Very often it is the basics which are sadly lacking. Reliability and notification of late delivery are customer issues which are always rated highly when Competitive Advantage conducts a customer satisfaction survey. Customers accept that manufacturers suffer delivery problems from time to time. What they ask is to be informed of problems as soon as possible. Yet manufacturers consistently fail to do this. This is a shortcoming which has major implications for customers If they are merchants or wholesalers they too will be letting their customers down, or if they are contractors they may have men idle on site or incur penalty clauses.

What do your customers think of you?

Do you know how your customers perceive your company? What they consider to be your shortcomings? How you compare with your competitors and the other suppliers your customers use? If you do not, you are in danger of losing your customers and suffering a fall in sales. Many a market leader has suddenly found themselves displaced by a competitor. Equally, by understanding these issues it is possible to identify opportunities to be better than your competitors thus developing a competitive advantage which can contribute to increased sales or justify a price premium. Internal measures exist which can be used to monitor the situation on a monthly basis, for example the level of complaints or credit notes issued. But these are only a rough measure. To be fully aware of the situation a customer satisfaction survey should be conducted at least once a year.

The Department of Trade & Industry has introduced a number of initiatives to improve standards in the construction sector; Rethinking Construction, Movement for Innovation and Construction Best Practice to name a few. Within this has been the initiative to encourage benchmarking and establish Key Performance Indicators (KPIs). The Construction Products Association has the remit from the DTI to encourage the development of best practice throughout the constructions products industry. Starting in 2002, they conduct an annual survey of manufacturers’ performance in terms of People, Environment and Customer Satisfaction (known as CPI KPI). Providing building product manufacturers with the opportunity to compare their performance against the industry.

Competitive Advantage has always gathered information on competitor performance when conducting surveys, with access to the CPI KPIs it can now provide a client with a benchmark comparison with both competitors and the construction products industry.

Reviewing the survey’s findings

But the important point is not knowing what your customers think of your service, it is using that information effectively. Having conducted a customer satisfaction survey the process of developing competitive advantage can then begin.

The first phase is to review the findings. Factors to consider are:
• What are the areas of greatest importance to our customers?
• How do we out-perform our competitors?
• How do we out-perform the industry?
• How do our competitors out-perform us?
• How are we out-performed by the industry?
• Why are there differences?
• What levels of improvement do we want to achieve?

Where these show your company has a successes it is important to ensure everyone in your organisation knows, and that you tell your customers. Very often Buyers in customer organisations will not be involved in day to day supply issues and will not know of your company’s strengths, or will chose to ignore them when negotiating prices. Making them aware will put you in a better negotiating position, or at the very least encourage them to think twice before purchasing from your competitors.

Implementing change

When it comes to correcting your shortcomings, prioritisation is key. Introducing too many initiatives will lead to overload and a failure to achieve any improvements. Areas for improvement should be ranked based on their importance to the customer and the ease with which change can be achieved. Starting with an easy win will work wonders for morale and encourage people to take on the more demanding challenges.

Having prioritised your improvement opportunities start with no more than three projects. It is best to create multi-disciplinary teams to work on these. Involving people from across the organisation will bring in a range of skills and will also improve customer focus in those departments which do not normally have involvement with customers.

To improve the chances of success include a senior manager in each team, this demonstrates that the initiative is important. Hold regular progress reviews, if possible the Managing Director should attend these to reinforce their importance and ensure any internal blockages are quickly cleared.

By repeating the customer satisfaction survey the following year it will then be possible to measure progress with implementation of initiatives and as customer priorities will be changing and competitors will be developing their own offerings, noting new trends. This means that you will need to review and redefine targets before continuing the improvement process.

Case Study

A brick manufacturer wanted to differentiate itself from its competitors through customer service. Having conducted an extensive survey of its customers and end users it was able to identify the key issues of importance and the main causes of annoyance for its customers.

Project teams were formed to address the key issues, leading to a re-structuring of the sales office to eliminate some of the frustrations customers often encounter and provide a customer focused service.

Example of CPI KPI

Customers were asked “How satisfied were you that you received value for money from the manufacturer in respect of completed orders?”

Only 5% of companies have customers who were totally satisfied that they received value for money. How would your company rate?

Customer Satisfaction Measures from the CPI KPI

Data is available for the following subjects:
• Product Quality
• Delivery Reliability
• Sales Advice
• After-sales Service
• Value for Money

This is presented for the industry overall, but also for the following sectors:
• Raw Material Supplier
• Fabricated Components
• Fixtures and Fittings
• Cladding and Insulation

Useful Websites

Construction Products Association: www.constprod.org.uk
Department of Trade & Industry: www.dti.gov.uk
KPI Zone: www.kpizone.com

Copyright Chris Ashworth 2003

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