Peak Performance Strategies

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The RETT-index Continued...

Basically what is RRETT?

It is one example of an index that measures the behaviour of a service provider towards a client. This index is applicable to the contracting industry where a service level agreements deal with what has been outsourced. High scores on the index indicates that the provider is measuring up to the standards of the client to such an extend that the client becomes engaged, which is more than satisfied.

What is different in our approach with customer profiling compared to normal customer profiling?

A Growing body of research is indicating that satisfied customers are not loyal customers, whereas engaged customers maintain a sustainable business relationship with the provider. When a client outsource a important part of their business, like what happens in the contracting industry, terms like “partnership” is loaded with meaning and goes beyond refering to a satisfied customer. Issues of reliability and responsiveness in partnership now have functional and strategic relevance to the business of the client.

You have been involved with a company with the Customer engagement approach. What is the story around this?

It started with the MD asking how his company can become a preferred partner in an industry where there is high competition in the delivery of the same service. A large number of their existing clients were clients based on long-term personal relationships with members of his company. His concern was that this is not a sufficiently strong business platform to rely on when it comes to sustaining the business, issues of pricing, integrity, and when price decisions are made at levels higher than where the contacts are.

The method chosen was to interview the most profitable clients, who has not only renewed the contract with the provider, but also where the sites were managed excellently. The best profitable relationship from the best managed sites. These clients repeated 5 variables and it was used to formulate the index-content. The variables are reliability, responsiveness, empathy, tangibles and timeousness.

What were the initial responses from the Exco team and those in the field working with their customers?

Don’t know about Exco yet. In the field: Resistance from the less successful managers, but acceptance and challenge to maintain from the successful site-managers. The RRETT-Index challenged the less successful managers and they responded typically by blaming the client. Having stated how it was really the clients problem, they stopped and did not start any process for solving the problem constructively and to the mutual satisfaction of themselves and the client.

What was revealed in the interviews and measurements?

When clients at the non-profitable sites were interviewed they either did not experience any of these variables or it only happened inconsistently. The clients who were engaged consistently had ratings 80% and higher, both overall as well as on any one variable. The RRETT-Index is a predictor of client engagement as well as of managerial effectiveness.

How did this fit with the team now?

One site was turned around from non-profitable to profitable within 6-8weeks (which is very quick for the industry) by simply managing the issues raised in the RRETT-Index. The turn-around results show that the RRETT-Index not only helped the manager to establish his priorities, but also helped him to improve the effectiveness by which the site was managed before him. By doing what is important to ensure that the client’s outsourced deliverables are taken care of, the whole site made a step up to efficiency.

What opened their eyes to the realities of customer engagement?

Poor profitability, the clients considering re-tendering, and looking to other service providers. In one sector of the business, a significant number of their “contacts” were moved and the new generation managers were demanding a higher quality and consistent service. Price issues were raised and threats about re-tendering were in the air.

What are they doing now that is different than before with customers?

Machine availability, planning down time for machine maintenance, listening to client priorities, be one step ahead of client requests, gathering information from and giving feedback to the client to improve trust and credibility are just some of the things which were done, leading to a more successful operation and an improved RRETT-Index.

What were the lessons learnt by the company management?

To be profitable, start with the client, and balance your business concerns with the cost, time and quality of deliverables agreed to with the client. The excellent performers demonstrated the ability to manage a number of variables, rather than drive one like gross profit at the cost of everything else. The excellent performers are “weavers”: they weave all the important strands into a carpet of excellence (an expression borrowed from Prof. Crous: Human Resource Management, RAU).

How are they doing strategy differently now compared to the way they did it before?

Machine availability, planning down time for machine maintenance, listening to client priorities, be one step ahead of client requests, gathering information from and giving feedback to the client to improve trust and credibility are just some of the things which were done, leading to a more successful operation and an improved RRETT-Index.

What role does leadership play in the customer engagement process and the affects this have on the outcomes and strategy?

It is becoming one of the key items on their management dashboard.

What effect and affect did the process have on the customers and their interactive relationships with the company?

Where the RRETT-Index is 80%+ the client easily renewed the contracts with the provider company. In one case an increase of R500 000 a month was accepted and agreed to in 10 minutes, whereas in a similar company in the same group a requested increase of half that amount has given the client the excuse to go out on tender.

What are the outcomes and benefits as stated by the company team in terms of their experience?

The clients with high RRETT-Index actively contribute to the problem solving on site as well as the profitability of the service provider, because they think about it as something partners do to help each other. When the client asks for “extra” in terms of production or emergencies, the service provider will go out of their way to do what is necessary, even if the short term is a very costly action. They realise that they will make it up over time.

What if companies just "hack it as usual with their present modis operandi with customers"?

See the article on “Building a Brand Relationship”. If they do what they always do they only get the same, which is below par to engage customers, and they put themselves in a position of being strategically vulnerable to their competitors.

"Customers are the future of the company...where they go is where companies need to go. How are companies not "getting the plot" in this regard and where are they going totally wrong?

Complicated answer, but here are a few simple pointers: clients assume they know everything about their clients and refuse to update this information; “what gets the client to buy is what gets then to stay”-fallacy; “contacts”-relationships is enough to keep clients away from competitors (somebody can be your friend but they might never do business with you because it is different criteria for a friend; contacts can only be as loyal as they are permitted to be); the typical market research and statistics create the impression as if all the essential information of the client is available, but it ignores the context sensitive information; through questionnaires you only get to know what you ask rather than what might be vitally important to the client-the “expert” verifies his/her meaning about information which might or might not be relevant to the client, ergo my preference to qualitative surveys when it comes to managing client relationships cost-effectively (see my article on the topic). Demographic information characterise the client, but does not describe their decision-making strategies.