By: Victoria Graeve-Cunningham, Director of Lean Operations
In the past, Lean has been primarily considered as a production practice. Because the philosophy of Lean is simply focusing on adding value to customers in the most productive way, it can and should be applied to any operational activity. Recognizing this, many business areas have already adopted using aspects of Lean methodology. A new and dynamic area now using Lean is sales and service.
Lean sales is being utilized to increase profitability by improving the sales operations process and advancing product development. The customer experience and opportunities does not stop once the customer receives the product. According to SalesForce:
81% of consumers are more likely to give a company repeated business after good service
A 5% increase in customer retention increases profits up to 125%
A 2% increase in customer retention has the same effect as decreasing costs by 10%
It is 6-7 times more expensive to acquire a new customer than it is to keep a current one
Not only is the cost of doing business with repeat customers low, but satisfied customers tend to spend more and make recommendations to new potential customers; therefore, customer retention is vital to any organization. It is imperative that companies go beyond a focus on Lean sales and begin to encourage customer service departments to practice Lean thinking.
Lean thinking includes becoming customer centered, engaging people around Lean processes, and continuously improving and innovating processes and products. Because customer service is adding value by building relationships, becoming customer centered is intuitively accomplished; consequently, the emphasis on incorporating Lean in customer service is on understanding flow and improvement opportunities.
Considering customer service representatives are most valuable when they are working with customers directly, the challenge is taking the time to review and improve processes for value-added activities to optimize quality, cost, and speed. A way to ease into improvement is fostering a transparent environment where employees can easily share just-in-time customer experiences.
This transparent environment is created by having an open forum for collaborative communication where evidence-based decision making is used. Involving the front line operators is important, but it should not require pulling people out of the field for extended training sessions or meetings; instead, a short stand-up meeting where status updates can be shared quickly will suffice. Furthermore, it is beneficial to have a quick visual of customer satisfaction, which can be accomplished by displaying a dashboard that highlights key metrics, to guide the conversation. At the very least, when obstacles are discussed, using root cause analysis for problem resolution helps to identify the appropriate corrective action and prevents problem recurrence.
Many companies have been successful in executing Lean and gaining obvious benefits. It is now time to use Lean philosophy in customer retention. Especially, because the core idea of Lean is rooted in maximizing customer value.