You say your business is customer-centric, but is it?

A business associate in North Carolina recently drove his Lexus to New Jersey to handle some family business over the course of a 5-day period.  Over the weekend, his vehicle developed mechanical issues and on Monday morning, he made an appointment with the local Lexus dealer in NJ.  The car was scheduled for repair and return by Monday evening but as luck would have it, a part had to be ordered and the service manager called my colleague to inform him that the car would not be ready until Tuesday afternoon.  No problem – he wasn’t driving back to North Carolina until Tuesday night. 

On Tuesday afternoon, he received another call from the local Lexus service department informing him that the repair could not be completed until Wednesday.  My colleague explained that he had to return to North Carolina that evening for appointments on Wednesday and could not accept another delay.  The service rep asked for a few minutes to investigate the delay and promised to call back promptly.  Five minutes later, he called with the following solution: the repairs could not be completed Tuesday, so the dealer would provide a complimentary current model loaner that afternoon for the drive back to North Carolina, then ship the repaired car to North Carolina via trailer when it was ready and collect the loaner.  Needless to say, my colleague’s reaction was extremely favorable, as in “Wow!”

The financial manager of the dealership undoubtedly recognized that the dealership would never see another nickel of revenue from my Carolina colleague, clearly sacrifice any profit on the repair job, and in fact, lose money given the cost of shipping the car and retrieving the loaner.  How could the service rep authorize this solution?  Because as a luxury brand, Lexus is customer-centric; that is, it’s all about treating the customer to a luxury experience, meeting the customer’s needs and making the total Lexus experience consistent with that brand and strategy.   What are the keys to a customer-centric strategy?

Make the focus on the customer permeate your organization.  Carefully consider every aspect of your organization, both those with and, just as importantly, those without direct interaction with the customer and identify the policies, procedures and operational details that will benefit the customer or enrich his experience in purchasing and owning the product.  For example, the design of a Lexus dealership is contemporary and clean, classic and consistent with a luxury brand.  In addition, in contrast with most car dealers’ showrooms where sales reps have open desks on the sales floor, the Lexus showroom design provides each sales associate with an individual, walled cubicle so that the customer/potential car buyer’s conversation with the sales associate is private.

Communicate your strategy clearly to all employees.  Every employee at a Lexus dealer is familiarized with what the Lexus brand stands for and trained in how to interact with customers, whether in sales, service or parts.  That includes phone, email and face-to-face communications.  If you’ve ever visited a Lexus showroom with the thought of buying a car, you know that you’re warmly greeted by the receptionist as you enter, introduced to a professionally dressed sales associate and given the freedom to browse without pressure; when you want to ask a question or discuss a possible purchase, the sales associate is readily available.  If you have a service or repair requirement, the service associates are well-groomed, neatly attired with Lexus-logoed shirts, and polite and patient with even the most frazzled customer. 

Document your processes and policies so that every employee has a clear reference for how to act.  If a company is to be consistently customer-centric every process in daily operations should be documented with written procedures, scripts, forms and flowcharts, as appropriate.  In that way, employees have a ready resource to use when dealing with new situations (and every truly new situation or exception should be added to the written procedures so that it becomes a part of the routine after the first time that it has been encountered).  In addition, a manual assures that employees have no reason to execute in a manner inconsistent with the company’s customer-centric strategy.

Empower your employees to act in the best interests of the customer. If a customer is to experience the satisfaction of being the focus of your business, it is imperative that employees be given a measure of authority to be responsive to customer needs and do what is best for the customer.  In the long run, doing what is best for the customer will redound to the company’s benefit, even if there is a short-term cost.  While employees may have limits placed on their ability to expend or commit company resources in this pursuit, they must also have a clear understanding of how to get a quick approval to proceed with the appropriate course of action.  Witness the service issue above – the service rep needed 5 minutes to get approval to incur the cost of providing the customer with a loaner, shipping his car to North Carolina, and retrieving the loaner.  He may not have had the authority to do this on his own, but it took just minutes to let the customer know he was being taken care of.

Being customer-centric is a lot more than saying “We care about our customers” or “We put our customers first.”  It’s about the entire company living every business moment with the question “What’s best for the customer?” at front of mind and having the policies, procedures and tactics to make the strategy a reality.  If you as a customer had the Lexus experience described above, wouldn’t you likely be a Lexus customer for life?  Wouldn’t you tell your friends and associates about how you were treated?  Wouldn’t you like your customers to feel the same way?

About Ken Drossman

Ken Drossman is a Managing Director at Oak & Apple Partners, LLC. Ken has spent more than 35 years demonstrating practical financial acumen by leading, advising and guiding privately-owned, small and middle-market companies through financial and operating challenges. He has in-depth experience in all phases of financial, strategic and operating management from hands on cash flow budgeting through acquisition financing, from divestiture of business units to reorganizing and leading newly formed companies. Prior to co-founding Oak & Apple Partners, Ken has been the principal at Lakeview Business Consulting, LLC, which assists entrepreneurial business owners and their companies in achieving their business vision. Ken earned both his undergraduate and graduate degrees from The Wharton School of the University of Pennsylvania. Before founding Lakeview Business Consulting in 2006, he served for 18 years as CEO, COO and/or CFO at several privately-owned companies, in industries including financial services for hospitals; digital document storage and outsourced back-office services for professional service firms; design and distribution of personal business accessories through big-box retailers; capital goods manufacturing for national and regional retail chains; and information services for beverage alcohol manufacturing and marketing companies. Previously, Ken was a Partner at Grant Thornton, LLP, where he provided management consulting services to such companies as AT&T, Baxter Laboratories and GTE-Sylvania, as well as many middle-market companies.
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