May, 2008 Archive

Forecasting Customer Demand

In order to provide an experience that will make your customers want to return, your company needs to be ready to meet the inevitable customer demand for your product or service. This can be met with proper inventory, accurate reservations, or adequate staffing.

On our last family vacation, we rented a car with Dollar rental car. After the airport shuttle dropped us off at the pick-up location, we waited in line for almost an hour. The line of customers kept growing and wound its way outside the building. The office was significantly understaffed and the resulting delays strained the customers’ patience.

Ironically, Dollar knew exactly how many people would be picking up cars that morning. Everyone had reservations and there shouldn’t have been any surprises with the customer volume. Don’t let this happen to you.

Predict the Future

There are several formulas for calculating future demand for your products and services. Pete Abilla gives a great introduction to forecasting on his blog. Based on historical numbers, you can predict future demand. This, of course, depends on no unforeseen events changing the customer landscape. But whether forecasting with a formula or gazing into a crystal ball, the point of predicting the future is to help you anticipate future needs based on past performances.

Know the Future

One thing Pete mentions in his post is that “forecasts are no substitute for calculated values.” In the case with Dollar rental car, or other times where your customers have reservations or placed orders, you know what your demand is. Plan accordingly.

Prepare for the Demand

Once you know what customers want, you need to be ready. Staff your business accordingly, stock your inventory, or even extend your hours to compensate for customer demand. You should also have contingency plans in place for when your predictions or preparations are wrong. Empower your employees to solve problems on the spot or compensate customers who don’t get exactly what they want.

Verify and Adjust

Were your assumptions correct? If they were, you should have been able to ride your forecasts to successful sales. If not, learn from your mistakes and adjust your future estimates for next time. Constant iteration and adjustments will refine your predictions so that you can accurately and efficiently deliver on future customer expectations.

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Book Review: The Best Service is No Service

In The Best Service is No Service: How to Liberate Your Customers from Customer Service, Keep Them Happy, and Control Costs, authors Bill Price and David Jaffe seek to challenge the traditional view of customer service.

While the title is a bit daring, “no service” isn’t really the solution the authors are proposing. Through an eight step process, they outline how your company can refine its customer service by identifying and fixing problems and enabling customers via self-service.

Prevention

A majority of customer service problems can be resolved up-front by identifying the root cause of issues. These may be problems with packaging, customer expectations, instructions, etc. Your company can prevent problems from even happening by having a feedback loop, ensuring that those who hear from the customers send the information back to those that can fix the problem.

Self Service

The real “no service” option is that of quality self-service. With current technology, customers should be able to solve the majority of their problems via your website or even your phone system. If customers can find the answers they need online and can take corrective action, they will solve their own problems.

Listen and Act

Too many times the customer service department insulates the rest of a company from customer feedback. R&D, Marketing, Sales, Manufacturing, IT, and others need to hear what is wrong so they can actually fix it! Listen to your customers and act on that information. Otherwise, you’ll just keep getting the same inquiries and issues every day.

Joe’s Recommendation

Buy a CopyThe Best Service is No Service will change the way your company thinks about customer service.

They share numerous examples of both the good, the bad, and the ugly. You’ll see how other companies were successful (or not) in serving customers and can then apply those principles to your situation. This was a very thought provoking book.

Buy The Best Service is No Service: How to Liberate Your Customers from Customer Service, Keep Them Happy, and Control Costs on Amazon.com.

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