Blogs

Jo Geraghty

Director

Effective competition

Date added: 25th Mar 2015
Category: Customer Experience

When you compete to deliver outstanding customer service how do you measure your performance - Against a benchmark, against your competitors or against your own potential?

When you compete who do you measure yourself against?  More importantly when you go all out to provide outstanding levels of customer service, what do you use as your benchmark?  Do you perhaps look at industry averages or at your nearest competitor; or do you strive always to provide the highest level of service which you can, irrespective of how others are performing?

It’s an interesting dilemma.  Pitch your viewpoint at the wrong end of the scale and you can easily find yourself either endlessly chasing an ideal which you can never reach or blindly sliding into a ‘don’t care’ attitude.  Even worse, follow the industry and you can as easily end up in a downward spiral towards poor customer care as you can in an upward one towards excellence.

The way in which paying too much attention to the competition can lead to a lack of competition was illustrated recently when The Treasury Committee published its report into banks and SME lending.  The report itself makes fascinating reading, not the least in the area of competition.  Amongst other comments the report says that “Millions of consumers and small businesses have been getting a poor deal for decades because of a lack of effective competition and genuine choice in banking.”  Highlighting the traditional dominance of the big four, the report suggests that even though challenger banks are entering the market and that the FCA has a duty to promote competition there is still some way to go.

Evidence would suggest that similar accusations could be levied at a number of industries, and not just those which previously had a monopoly position such as power or telephones.  Any business sector in which firms compare their own performance to others rather than to what they individually are capable of is a sector in which customers may be being under-served.

Let’s look at a couple of scenarios, starting with the case for being honest about delivery.  One of the key planks of good customer service is to truly understand your customer base.  In turn this means being honest with your customers about the level of service which you are capable of delivering.  Not every car company can sell top of the range models all of the time with a service to match.  Indeed if they tried to do so they would not be providing the level of choice which consumers want and need.  So some car companies trade in cheap second hand cars.  And because the margin on these is so slight, the level of back-up service which they are able to provide is also not up at the top of the range.  Trying to compete with the best will only lead to shortfalls in service.  Being honest about doing the best you can and about what you are aiming to deliver can still result in a high level of customer satisfaction.

But what happens if you are able to offer a top of the range service?  Do you then compare yourself to the industry average, see that you are doing OK and slacken off, whether consciously or unconsciously.  You may even be delivering service right at the top of the range but if you are capable of more, then you are letting yourself and your customers down by not providing more.

Let’s be clear about one thing; we are not saying that businesses should ignore industry comparisons, they can be a very useful tool if viewed in the right way.  But we are saying that no matter how a business is performing against benchmark, if it is not performing to its own potential then it is letting itself and its customers down.  So when you compete to deliver outstanding customer service how do you measure your performance?  Whatever measurement you use, make sure that you include your own potential in the mix. After all, why should you let the shortfalls of your rivals confine you to mediocrity?

 

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