Sit Customer Sit "How Did Customers Get So Trained?"

Featured Author - Ren Jones - October 18, 2003

The Situation

Do these all sound familiar? I'd be willing to bet you can come up with a book full of the things your customers expect. But where do they get the audacity to expect the sometimes unreasonable? Right from you! Your competitors did not raise the customer service bar, you did. Everyday your call center personnel make promises to customers that raise the bar even higher. But isn't that what you want? Don't you want your people to respond wonderfully to those "moments of truth?" Your people are merely doing what they have been taught, just like your customers.

How do you respond to an irate customer who received an incorrect shipment? Don't we ship the product next day air to make up for the error? Or maybe we drop everything and make a special delivery to them. How do we respond to a customer who has ordered the incorrect item? We often handle it the same way as when it is our mistake. We do not want to upset a customer, especially in today's market. Therefore we are training the customer to think whenever there is an error it will be resolved free of charge. The question that must be asked is "what is the problem with this?" Nothing, if you or your customers don't make a lot of mistakes. How is your warehouse these days? I have been told these are hard times. Is that true for your company or your industry? If these are truly difficult times doesn't that mean every mistake costs you dearly? Doesn't that also mean each mistake costs your customer even more? You are probably asking yourself, how this article shifted to your warehouse so quickly. Think about it, a shipping error is magnified in economic downturns. Why? Because if your customers have been thinking of changing suppliers, now is the time to do it. Or at least fake like they are going to change so they can get a deeper discount. Again, the customer training process takes place. Shipping is the last non-verbal way we communicate to our customers. What are you communicating to your customers?

Maintaining Your Current Customers

Your marketing material, your web site, your catalogue are all tools to get you new business. Your warehouse is the one tool you have to maintain your current level of business. If you don't believe that ask yourself this question "How many of your customers do your sales personnel visit on a regular basis?" Think about the "Pareto Principal," not many! That means your customers' perceptions of your company are formed from the packages that arrive at their receiving dock. What do you think they perceive? The question that is often asked, "Is customer loyalty a thing of the past," is an interesting one. Customer loyalty began fading when the "mom and pop" shop got too big to know the customer. Loyalty is quickly becoming a thing of the past with the evolution of the Internet. The customer doesn't need to know who they are buying from. They just want what they ordered, when it was promised, and for a competitive price. If they decide to buy from you the next time it will be based on whether you did at least two of the things I just mentioned. If not, you have just trained them to buy someplace else. Is that being disloyal? I do not think so!

What Do Customers Want?

Being a consumer I choose to do business with the company that meets my needs. I will only give my hard earned dollars to the organization that gets me what I want, when I want it, and at a competitive price. This means your warehouse is training your customers to be "loyal or lethal." Many individuals will continue to patronize your place of business even if the price is a little high. But they will only do this if their other two needs are being met. If your competitor does not have an accurate inventory and therefore does not deliver on time, you have an advantage when price becomes an issue. However, if your sales personnel train them to expect a lower price for the business, what happens when you cannot beat the competition's price? You don't have a leg to stand on. Your company does not compete for the business you get, your warehouse does! Your company does not lose customers, your warehouse does! Your company can no longer afford to look outward for answers to keep your customers loyal; it has to look inward at your warehouse.

Managing Your Warehouse Is Key

Your people will not treat your customers better then they are being treated. If that statement is true, and you believe your warehouse plays a valuable role in maintaining your current customer base, then ask yourself this question. How do you treat your warehouse? Do you have a lot of turnover? If so, then how can you expect your customers to be loyal when you can't even get your employees to remain loyal? Edward Deming said "Our prevailing system of management has destroyed our people!" and Albert Einstein said "You can't solve a problem with the same mind that created it!" It is time to adopt a new way of thinking about our organizations. You must view the total experience of the customers and not just total value of their accounts.

If you look at that experience:
CC + TIS + AI + TAOF + PNP + OTS + CI + OTOA = PO
(Customer contact + timely information and solution + available inventory + timely and accurate order fill + proper and neat packaging + on time shipping + correct invoicing + on time order arrival = perfect order.)

Of the eight steps in this experience your warehouse is responsible for five of them. This means if your customers are not loyal, which one of the five areas in their experience did they have a problem with. If they remain loyal it is because your warehouse has trained them to be. We often hear that the difference between a median and a high performing company is the sum of "many little things!" It is actually one thing, your warehouse, which does many little things. In this age of computers, the Internet, buying groups, and even war, a customer's loyalty should not be questioned. What should be questioned is how the customers became the way they are? And the answer to that question is, because we taught them to be!

About The Author

Ren Jones was the founder and President of Total Logistics Solutions, Inc. (www.logisticsociety.com). He is now taking on a new role as President and CEO of AHN Corporation (www.ahninc.com). With over eighteen years of experience in training, warehousing, and logistics he has used his knowledge to assist and turnaround small and large companies alike, making them more efficient and profitable. He has been published in several industry magazines and is the author of "This Place Sucks" (What Your Warehouse People Think About Your Company) and "Warehouse 101" (A Complete Guide to Operating Your Warehouse)."
Ren can be reached by phone at (818) 353-2962 or by e-mail at rene.jones@logisticsociety.com.