Ted Grigg's Reflections about Direct Marketing

Richard Rosen, Founder/CEO of FastCall411 made a startling revelation in his article in the December 11, 2007 issue of DM News that confirms what we all experience with the deplorable state of customer service in many US companies.
    

"A survey of 5,000 local businesses revealed that 64% don't even answer the phone."

He goes on to say that consumers want service, period. Contrary to corporate rhetoric, this cry for change has gone unheeded in most US corporations. Why is that?

Please add your thoughts to my list of possibilities.

Notice what happens when companies invest millions in a CRM software program only to find that nobody uses it. The company either grew up with a customer focus or it didn’t. I have yet to see a company's successful reversal from an inward to an outward focus.

I recall one client who performed a beautiful implementation of a CRM project only to find that after one year, management deemed it a failure. Was it really the failure of the CRM venture to improve customer relationships? No. Actually, that was not of concern to them.

Instead, management’s real intent was to force legal and error free compliance of all marketing programs using the campaign management features built into the CRM software. Their discontent had nothing to do with CRM's profit-making  or customer relationship building capabilities, but rather it's inability to protect the organization from costly legal compliance errors.

The net result ---  the program was rarely used because it actually slowed down projects to a crawl and weakened compliance. It was the wrong solution for the hidden agenda of trying to enforce error free compliance to all corporate mandates and legal regulations.

2.     It is easier to solve short term, pressing problems than it is to work on complex issues like customer service.

The customer service attitude and practice crosses all divisional or departmental barriers. As such, any change requires tremendous energy, determination, and leadership from the top.

The salesman in the field, customer service representatives and managers must now follow the customer satisfaction drummer. They must modify past behavior. Corporate leadership must also delegate customer solving power to lower levels within the organization giving employees the latitude to solve customer problems.

Nothing less than a  corporate mandate can even begin to chip away at the challenge.

3.     A clear determination must be made as to whether the organization exists primarily for the benefit of shareholders, or does it have other, equally important stakeholders such as employees, customers and suppliers?

Knowledge@Wharton published a provocative article on October 17, 2007 entitled “Whose Company Is It?' unveiling new Insights into the debate over Shareholders vs. Stakeholders.”  

This article not only codifies that this difference exists, but that it differs from one country to another.

For example, US firms are shareholder driven whereas most European companies tend to function more as stakeholder enterprises.

Obviously, by their very nature, shareholder companies focus primarily on the bottom line to improve the performance of their stock. Stakeholder companies, on the other hand, will tend to hold on to their employees and help customers even when these actions may not contribute immediately to their net profits.

This report further stipulates that stakeholder companies’ products cost more than those products offered by the more efficient shareholder companies.

My Take

The Knowledge@Wharton report uncovers one of the prime reasons good service in the US does not seem to improve over time. Organizations in the US are more concerned about their shareholders than their customers or employees. So customer service, is at best, a secondary corporate priority.

As all experienced marketers know, there is more to customer loyalty and acquisition than price. Quality and ownership experience carry great weight when it comes to repeat purchase and long term profitability.

This balanced study wisely concludes that further study was needed to understand the long term impact on profits, sustainability and shareholder value.

As a marketer, I must confess my firmly held belief that the customer determines the ultimate success of any company. Let us hope that the evidence proves the old adage that taking care of the customer assures that the customer will take care of the company.