There is a cycle in business that is important to be aware of. The nature of this cycle is so simple and “proper” that it would seem trite and always employed. Well, the thought can be there, but the key is execution. The nature of business is to develop customer loyalty.
If you own the neighborhood grocery store, you want people to come back, time and time again. If you own your own sound company, you want the clients to come back for their events, shows and tours. If you are a manufacturer, you want clients to consistently purchase your products and you want consultants to always specify your product solutions.
Pretty darn simple, huh? Not so much…
In the simplest of definitions for a manufacturer, the quality of the products and quality of service lead to customer satisfaction, which lead to customer loyalty, which in the end means profitability. This profitability should lead, in turn, to investment in R&D and service/support department capability, completing the circle back to quality of products and service.
The same can certainly be applied to a rental/service company, with the profit investment being applied to additional equipment, staff and infrastructure that bolsters the company’s strength and bandwidth.
Quality Of Product & Service
Let’s presume for the moment that the expertise (people) and investment are present and robust.
There are two key propositions that manufacturers look to in product offerings: cutting-edge technologies and a variety of products that offer solutions to all (most) customer requirements.
If a manufacturer has established the delicate balance between these two, and offers the end user contemporary, dependable technologies (software, firmware, transducer, design and capability), and provides product solutions (powered, unpowered, subwoofers, down fill, monitors, variety of coverage and power handling options, etc.), then they’ve got broad-based client appeal. This may not seem like “quality of product,” but it absolutely is.
If you, as a rental provider/sound company, look at the services you provide as your product, you can immediately see the point. What you need to provide to the client is cutting-edge technologies with a variety of equipment solutions. Your effort is to strive for quality of your product.
The other aspect of quality of product is the dependability quotient.
This leans toward the service portion of the user interface.
The quality of a product is determined at every stage of that product’s development, and decisions are made (knowingly or unknowingly) that net out in the final product performance and capability.
Consequences of questionable decisions lead to a potentially compromised product in the end. This is where a skillful engineering staff can carefully consider all of the aspects of a development stage issue and differentiate the brand from the competitors.
Typically, this is a “monetary” versus “best-case” moment. “Cost-based solutions” are anchored into the company’s culture.
Those who are defined by revenue and margins tend to opt toward the less financially intrusive requirement, while those that are more adventurous financially (and culturally), can accept the challenges associated with a more expensive, yet bullet proof product(s) or services. Cost versus quality. The conundrum of business…
The service portion is essential to discuss. For the sake of this topic, I’m going to join service and support. The business parallels in this subject, for a manufacturer as well as a rental provider, are identical. You’re only as good as your last exchange with the customer.
The service quadrant of the relationship is commonly exercised and is a highly sensitive area of contact. As a provider, whether you are a rental house or a manufacturer, your contact people and their level of empowerment is critical. A high level of satisfaction that a client/customer can leave with, fused with a positive perception of your commitment to them, is mandatory in developing customer loyalty.
The empowering I refer to is three-fold: the level of education on the issues they’re confronted with; the amount of latitude they have to resolve these issues; and perhaps most importantly, their level of job satisfaction and the reflected positive influence that a secure and happy employee can project. Training, trust and a positive work environment.
The difference between a positive, supportive, collaborative crew on the road, and one that is populated with people that are unhappy with themselves, their gear, their pay, their crew-mates etc. is immeasurable.
The same can certainly be said for a manufacturer’s service and support teams. When someone doesn’t know the answer or isn’t empowered to solve the problem with a replacement, or has no idea when the needed spare part will be available, the consequence can be the loss of the client and the disparagement of the brand.
Customer Satisfaction
The result of a rewarding and satisfying set of experiences is expected to be customer satisfaction.
A negative experience is not necessarily the end of a business relationship, depending on the strength of the components of that relationship.
But the relationship is tested every time there is interaction, be it with a service person, a sales person, an executive, monetary or product remuneration, product or services performance or even how the client is handled and elevated to the outside community through marketing enterprises.
Over time, a degenerating and even subtlety passive set of exchanges will wear thin the connection.
The common phrase depicting a customer’s strength of relationship is a “zone of tolerance.” The idea is to review and define for yourself (and your company) the qualities of those boundaries. Are there “price sensitive” components? Have there been changes in the contact hierarchy in your company that have unsettled your client(s)? Are there new crew guys that just aren’t cutting it out there? These are just a few examples.
Understanding a client’s real needs and sensitivities is crucial in developing customer loyalty. Should the pressures of negative experiences push the relationship beyond those boundaries, you need to immediately bring to bear all of your efforts and key personnel to mitigate the problems and go beyond normal procedures to reassure that they are client #1 in your world.
Take the time to review each of your customers and value their commitment to your business. In these difficult economic times, a call followed by a hand-written letter evoking your sincere thanks can help show your awareness and respect.
Customer Loyalty
As quality of service and product should lead to customer satisfaction, customer loyalty is the expected follow-on from customer satisfaction. This is a bit presumptive, however.
Customer loyalty has so many variables and nuances that go well beyond customer satisfaction. At its most fundamental, loyalty can be defined as faith and belief and trust.
The exchange and exercise between customer/client and provider needs to be as effortless and rewarding as possible. I’ve witnessed such odds-defying alignment and commitment to a product or to a manufacturer in my time that it would seem impossible, if not implausible. But this comes with a heck of a lot of effort, and some “perfect storm” elements.
I wholeheartedly believe that it also requires honest passion, unfettered support, quick decision making and a willingness to truly put yourself and your credential on the line. To do that, you have to believe and know that you have at your fingertips the tools, alacrity and quality of performance behind you.
Move, and move fast. Earning the loyalty is in your hands.
Maintaining that loyalty needs to be of paramount importance and sincere.
The costs associated with maintaining clients, compared with developing new clients is a key piece of understanding you should factor in.
It is said that a 5 percent increase in customer retention can net well over 25 percent in profitability.
Remember, these clients may also feed an internal cycle of satisfaction in your organization, making your people happier and more satisfied, engendering positive interaction and thereby feeding that circle of positive interface.
Loyalty can beget supportive referrals and great word-of-mouth elevation of your services and/or products.
Profitability
With the stability of numerous clients should come profitability. With a consistent revenue stream that is well managed and built on a constant margin evaluated model, you should experience the reward of profit.
For the sake of brevity, I have to assume that you’ve instituted a clear business-based budget, wherein your margins are understood and defined. Your responsibility to overheads (bank, personnel, insurance, monthly costs, etc.) is the primary objective. Fluctuating costs need to be absorbed with some elasticity in your budget.
But over and above those expenditures is the main reason you’re in business: profit.
Investment & Empowerment
Now, what you do with that profit is the final segment of this discussion. It comes back to link with quality of product and service.
R&D – Investment in this all-important enterprise is essential in paving the road in front of you. This is the lifeblood of your enterprise if you’re a manufacturer. New products and new technologies advance your brand(s) and elevate your stature and capabilities.
What you start research on today won’t necessarily become product this year. Horizonal thinking is of the utmost necessity, and yet so many companies are guilty of not applying enough of the profit dollars to deep R&D. If the engineering staff is financially supported in their endeavors, chances are you’ll see impressive results.
If you’re a rental company owner, it is incumbent upon you to pursue the research in a different yet equally dedicated way.
Investigating the equipment marketplace, reading and talking with peers about technologies that can help you deliver your services in the most reliable and technologically advanced manner, is time and money well spent.
Get your hands on as much demo equipment as possible, and ask for the demo support to fully understand what’s in front of you and its benefits. You need to grow your company capability as often and with as much vision as a manufacturer. Your services need to reflect quality of product just as importantly.
Training – As a manufacturer, whether it’s the training of your clients, your prospective clients or your staff, there is no single investment more important than ongoing training.
This has to be capitalized and fully supported through any economic climate or business cycle, and at its core, is a philosophical investment, a worldwide mission that needs consistency of message and curriculum.
The communication capabilities that we have at our hands now allow an inexpensive set of media to establish contact with any portion of the world in real time.
Videoconferencing, webinars, DVDs and websites afford us the luxury of pinpoint contact throughout the world, enabling the delivery of a consistent and singular message.
In-house training of staff and personnel, whether you’re a rental provider or a manufacturer, is essential to the empowerment of the team. Knowledge is power, and just as important, knowledge is empowerment. We’re so fortunate that the industry we’re in is populated with passionate, devoted people that really do thirst for knowledge. Feeding that passion is crucial in the happiness and stability of your enterprise.
If you’re a rental company, make sure that whether you’ve invested in some new equipment requiring staff training, or if they simply need to be more fully qualified on a new processor (or new console, etc.), it’s vital to provide them with educational support.
Infrastructure – People and disciplines are infrastructure, just as much as new gear, computers or trucks. Investing in people with new capabilities broadens the organization. Deepening the bullpen allows for more day-to-day support and growth. Establishing a high priority to personnel growth allows those already onboard to understand that their company and jobs are more secure and stable.
Employee happiness and satisfaction is an absolute requirement and necessity. It radiates outward into the field of your clients. It cannot be undervalued.
The Wheel
Quality of Product and Service→Customer Satisfaction→Customer Loyalty→Profitability→Investment and Empowerment→Quality of Product and Service→∞
The five components of this cycle are each critical to feeding the next. A weakness in one will stunt the growth of all other components throughout the wheel.
Rather than digressing into each of the facets in a more thorough way, my intention is for you to come away with the concept as a whole, and for you to realize that this model is present in your world, whether you realize it or not.
Take some time to evaluate your business under this prism, and look for weaknesses and depth of commitment in a practical fashion. There is success in this wheel when it’s in balance.
Jeffrey Cox has spent the past 43 years on the road and in studios, in airplanes and cabs, hotel rooms and at front of house, dumps and dives, clubs, sheds, arenas, and a couple of “very big chairs” - all for the love of audio and music. He has founded an organization, 17 Degrees, LLC, to provide consultancy to manufacturers and rental providers alike. He can be contacted through the website at http://www.seventeendegrees.net.
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