As a business owner – there are 2 principles that are essential to running a profitable organisation.
- The first is to keep things simple, because that is invariably the most effective way to get results. Over complicating anything in business is the quickest way to limit its effectiveness– and that goes for everything from strategy and marketing to pricing and sales. It’s an approach that has always worked for nlighten, so much so that we now also apply it to the customer service improvement efforts we implement for our clients – with consistently positive results. But it’s also the subject of another blog, sometime in the future.
- For this blog, I’d like to focus on the second principle that I believe is essential for success in any business – to ‘drive value up and costs down.’
For some reason, the universe has seen fit to test me on this particular principle in recent months, and maintaining the appropriate balance between value and costs has been a challenge. But this has only served to reinforce my belief in the importance of this simple philosophy as a business success imperative.
One of the important keys to driving value up and costs down is the ability of a business to get things right first time, on time, every time. To me, it seems obvious that focusing on doing this would result in happy customers and lower business costs. So why does it still seem like very few businesses have grasped the importance of this simple approach?
On an almost daily basis, I hear complaints from customers about having to go back to a store or service provider – often many times – because the item they bought is faulty or the service they received is sub-standard. The obvious consequence of this is frustrated customers, some of who may never return. The less obvious consequence is markedly higher business expenses due to lost focus, lower productivity or replacement costs.
By not putting in the effort to make sure they get it right first time, businesses are effectively doing the opposite of what they know they should be – and actually driving value down and costs up. This is clearly an unsustainable model – and one that, I believe, has been at the root of many businesses closing their doors .
Much as consumers love to hate call centres, they are the one industry that appears to have grasped the importance of the ‘value up, costs down’ concept. For most call centre managers, first time resolution is a key performance indicator. The ability of a call centre agent to resolve a complaint or answer a question in one call is often the measure of their effectiveness (and can even be a factor in their remuneration).
Imagine if other businesses followed this example and assessed the performance of their staff and suppliers primarily on their ability to get it right first time. By making sure there are few (or no) returns, comebacks, complaints or repairs, those businesses could significantly cut their costs. At the same time, the value that their customers experience when doing business with them would almost certainly make them very loyal – and keep them coming back for more.
If ever there was a win-win situation in business, this has to be it. Best of all, it doesn’t require complicated strategies or huge budgets to accomplish. Often, all that’s needed is a change in attitude. And that’s a really small investment when you consider the potential returns.
By: Nathalie Schooling