Do FMCG, Drinks & Pharma Companies delude themselves on Customer Service? I think some may well be doing this and may or may not know it! Whatever service related KPI you measure the aim is designed to see how you are performing both internally and at a retailer or outlet level, against peers.
There are many ways of measuring the performance including OTIF, CSLM, CCF and CCFOT amongst many others. Essentially you are measuring how much of the right stuff you delivered to the right place at the right time. Importantly, it is not value based – you might measure that internally for monthly progress monitoring but it is irrelevant for service measures.
Some common errors in Customer Service measurement and management:
- Service should be measured per sku thus avoiding the possibility of hiding poor performance in one area with exceptional performance in another. Measuring by sku allows you to hold the right people accountable and ensure improvement resources are appropriately applied.
- Are you measuring against what the customer ordered or what your team said he could order? This is a common error particularly when order capture is in the hands of employees rewarded via value based sales incentive bonuses - “We don’t have that but you can have some extra of this”. You need to see the raw demand from your customers to really see what they asked for and what they actually received. There is no problem with substituting products with customer agreement as this maintains the relationship and should result in sales but this must be a visible process.
- Yes, of course the customer may ask for unreasonable amounts of a certain standard sku or promotion pack but hiding the “data blip” is not the answer. Addressing the issue with some collaborative planning would help both parties. For some reason they asked for a huge shipment; find out why and be more ably prepared to service the demand next time.
- Use an ERP that automatically allows you to allocate reason codes for service failures and get them investigated promptly. Focus on the big wins using the 80/20 principle; don’t spend too much time finding out why you did not deliver 5 boxes of washing powder and do spend time on the failure to deliver large volumes of high value beauty products.
- Get your service level on the agenda of the top table in the company. Your service level is a function of every single person in the company and is a reflection of how well you are performing in the market. This means the marketing guy and the HR guy and others must be involved. Avoid the usual sales approach of blaming all failures on everyone else. This is pointless, immature and hardly team working best practice! Celebrate successes widely and noisily.
- Do you have a Customer Service department led by a talented individual who is graded as highly as peers within the company? CS is a very important function and it should enjoy equality of importance within the business. Also, CS is not just about taking orders and printing invoices. Customers deserve the opportunity to talk to a real human being (avoid answer phones!) about their problems and concerns. Small issues in invoice accuracy which can delay payments of thousands of Euros can be sorted out by knowledgeable and concerned staff motivated to really help.
- Make the CS measure highly visible around the company – everyone should be aware of the overall CS their company is offering to customers. Don’t fall into the trap of accepting low or “sand-bagged” targets – you are likely to achieve them and that gets you precisely nowhere. If you deliver to Retailer platforms you might wish to check where your measure is recorded.
Customer Service = Satisfied Customers = Sales = Jobs/Pay/Bonus = Satisfied Staff