Have you ever really stopped to think about what customers really want in their relationship with a supplier?  I am not talking about their preferences for certain features or not having to wait too long to reach a customer support person.  On a more fundamental level, what is it that customers really want?

As we have conducted thousands upon thousands of interviews over the years, there are some things that we hear repeatedly.  They may have spoken in more specific terms about their desires (e.g., wanted more timely service).  When you start looking at the comments, frustrations, good job callouts, things they really liked and those they really didn’t, there are several themes that suggest some fundamental things customers want in their supplier relationships.  These fundamental needs fall into several big buckets.  In the next few blog posts, I will focus on each bucket.

Bucket Number One:  Customers Want Consistency, Consistency, Consistency

Think about it, the world we live in is an uncertain place.  Will all the equipment work for the big presentation for the board?  If I take my car in for repairs will it be done correctly, on time, and at the amount promised?  Will I get home in time to see my son or daughter’s performance or will traffic, or the boss, prevent it?

It is an uncertain world and those companies that reduce uncertainty by being consistent will be the winners now and in the future!  Let me illustrate this with a personal story.  I travel a good deal in my work.  Travel by plane is not the positively memorable experience that it was in the past.  There is little I can do to improve that aspect of travel.  But there are some things I can control like the hotel I stay in and the car I rent.  As a general rule, I stay at a Hilton hotel (any of their brands but usually Hampton Inns or Hilton Garden Inn).  I also usually rent from Enterprise Rental (check name).  Readers of this book may have had different experiences that I have had but mine have nearly all been positive.  Two specific examples come to mind.

My wife and I were staying in New York City at a Hilton Garden Inn.  I noticed that even in New York, we were treated much the same way as we would have been treated at most any other Hilton Garden Inn at other places in the US.  The staff was friendly and accommodating in a manner that seemed genuine.  The room, though small (remember, this is New York) was clean and orderly and everything was in good working order.  The food served was quite good.  When we returned to the hotel each evening from the hurley-burley of New York, it was like returning to a quiet and peaceful retreat.

I typically use Enterprise for my rental car needs.  One trip to Miami really made us loyal customers.    Our flight was quite late but the car was still there.  The young man who greeted took great pains to explain the main controls of the car (how many times have you rented a car and could not easily determine how to open the gas tank?).  Importantly, he took the time to first introduce himself to my wife, a courtesy that is often overlooked.  During our trip, the hood sustained some minor damage (or we thought we did it).  We pointed it out to the agent when we returned.  He said that to make certain it did not happen while we had it he would check pictures of the car.  After a few minutes he came back and said the damage was there when we rented but it was not clearly noted.  They had not had the chance to get the car repaired.  Even though the first agent missed noting the damage, as did we, when we returned the car the agent did not automatically assume we caused the damage.

This consistent service has paid off for both companies.  Hilton is likely to conduct an IPO (Initial Public Offering) this month.  The value of the deal will likely be around $32 billion, up from the $26.7 billion when the company was taken private in 2007.  Enterprise, which is privately owned and does not disclosed detailed financial information reported in its 2012 that it was the only investment grade rental car company in the market.  This strongly suggests a pretty solid financial track record.

These are only two examples.  It seems that I tend to have positively memorable, worry-free experiences whenever I deal with these two companies.  This illustrates one of the things customers want in service—consistency.  Removing the uncertainty of what the experience is likely to be does several things for customers.  First, it makes it easy to make a choice.  If I arrive late at night I want to not have to worry about my rental car not being there or the hotel room not ready or not clean and quiet.  Applying this to the markets in which we work, if a customer purchases construction equipment, a power generator, a lift truck or machining equipment they want to know that there is someone they can count on to repair it in a timely and accurate fashion.  Keeping the investment running is key to achieving the financial returns from the original investment.

Our own research supports the importance of consistent service.  We use the Net Promoter Score (NPS)[i] as one of the key measures of the service experience.  For those not familiar with NPS, it is question that asks the customer about their willingness to refer a supplier on a 1 to 10 scale.  A customer giving a 9 or 10 on this question is a Promoter; a respondent giving a 7 or 8 is a Passive; and one giving a 6 or less is a Detractor.  NPS is determined by subtracting the % of Passive customers from the % of Promoter customers.

We began looking at the responses of an individual customer to this question from one interview to the next (we typically interview a customer twice yearly).  What we found is that those customers with a higher NPS also had a higher percentage of customers remaining promoters from one survey to the next.  The top performing client retained 87% of their customers as Promoters from one survey to the next versus an average for all clients of 75%.  Consider the underlying reasons for the higher scores; customers were receiving the kind of service they expected.  It was service they could count on.  It was consistently good service they kept coming back for!

 

[i] Net Promoter, Net Promoter Score, and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.

Lynn Daniel

Any feedback would be greatly appreciated! Please tell me what you think in the comments section of this page.

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