Improve Service Delivery

Improve Service Delivery

Investment in customer service has shown to pay off handsomely.   After Jeff Bezos founded Amazon in 1994, he pledged to become obsessed with delivering excellent customer services.  Amazon has received both good and bad media, but something everyone agrees with is that Bezos’ company has outstanding client service.  When Bezos rolled out the Prime program, he wrote that “expedited shipping becomes an everyday experience as opposed to an occasional indulgence.”  It has irrevocably shifted shoppers’ expectations and started a competition for faster shipping.  Prime keeps clients hooked to Amazon.   Driving excellence in service has not only brought Amazon, a large number of customers but also it’s helped make it a force to be reckoned with in the retail sector.  Prime also proved another critical point for Amazon:  Customers are prepared to pay for better, faster service.

Most people associate customer service with the interaction that occurs between an organization and its customer-facing employees, rather than the supply chain.  However, a business’s ability to offer exceptional customer service is based to a large extent on its operations–its ability to deliver a service or product fast and as promised, or to substitute or return a defective product quickly.

As Amazon demonstrates, customer service may provide a winning edge in a competitive world.   To be known for service, a business must have intimate knowledge of customer needs, have the capability to provide support that’s hard for the competition to match, and then find a way to get clients to pay for the increased service.  Involving the supply chain upfront may help identify different service models that can be offered to the customer.   The sales team can then negotiate the cost with the client.

The businesses can provide better service profitably by tailoring service levels to the customer segment.

  • First, by classifying customers by segments and by creating a menu of service levels
  • Second by identifying service levels suitable for different segments
  • Third by developing a service model that is difficult for the competition to match, g., Southwest Airlines’ 25-minute gate turnarounds, and
  • Fourth, by pricing it appropriately and finding a way for the customer to pay for the increased service.

Read more in — The Supply Chain Revolution – Innovative Sourcing and Logistics for a Fiercely Competitive World — book available at Amazon.