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Similar to The 80_15_5 Principle
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The 80_15_5 Principle
- 1. The 80/15/5 Principle Managing Customer Needs While Protecting and Maximizing Your Resources Concept Introduction I’m sure many people have their own examples of how different departments within their businesses seem to struggle every day with managing customer expectations. There never seem to be enough resources available to meet the customer’s needs and management can’t afford to keep throwing bodies at the same problem -‐ especially when business cycles tend to increase and decrease resource demand at random times. But without the ability to manage the customer expectations properly in a cost-‐effective way, how are you to grow the business? Let me introduce you to a concept I’ve learned and perfected over the past 20 years in several high-‐tech industries. It has allowed me to concentrate precious resources to the most important tasks, preserve talent within the group, establish employee job satisfaction and organize inter-‐dependent departments to become loyal fans of the principle. I call it the 80/15/5 Principle. Consider your customer and how they purchase your product or services. What drives them to purchase and how do you satisfy their needs, both before and after the sale? How does customer satisfaction and support play a role into their brand loyalty? By understanding their needs and requirements, you can identify what they may need and how they get their information. For instance, many buyers now use the internet to do much of their research. If this is your customer’s primary means of comparing your company to your competitors, then it makes sense to invest in a well-‐organized and equipped web site. But the web-‐site of a local law firm would be much different than, say, Wal-‐Mart’s. By understanding who your customers are and how they buy and when they need support in purchasing or using your services, you can anticipate as much as 80% of their needs upfront. And maybe these needs can be filled in the form of marketing materials, instruction sheets, how-‐to videos or manuals, white (technical) papers or test reports. Depending on the products or services you sell, you should try to understand what they would want to know to buy from you or keep buying from you. Now, once you understand what the need for information and support, the next key ingredient is determining the best way to deliver this material. I’m a believer in on-‐line materials and well-‐constructed “self-‐ help” web pages. They’re available 24/7 and – if done properly – can be your most reliable and consistent sales force. However, they have to be easy to use and find and be meaningful. If that’s true, your customer should be able to get 80% of their information from this resource. Now, this can also be a combination of on-‐line materials and a well-‐trained customer service group. You will have to determine the proper mix based on customer feedback and industry satisfaction standards. Keep in mind that customers only want positive results and how you deliver is somewhat immaterial. This gives you a chance to think out of the box and find other ways companies have been successful in delivering their results, and using these methods modified to meet your own needs (more on this in later posts).
- 2. Now that you have your customers getting 80% of all their needs being met with your front-‐line resources, what happens when that isn’t good enough? What if they need something more? This is where your 15%’ers come into play. This is probably going to be the behind-‐the-‐scenes people, or the “ol’ guy Sam in the back room” who can answer about any question. Why this group of people instead of bypassing the 80% front-‐line resources and fast-‐tracking straight to them? You want to preserve this group for only the real important issues or customer requests. You want them to be spending all their time answering the difficult questions and helping meeting customer needs so they buy or continue to buy. Many times this group of people (and maybe others to support them) help create the 80% front-‐line resource materials. They’re the ones sharing and teaching what they know, so they can move onto the really creative problems. After all, to them this is the “fun stuff” -‐ the items that keep their jobs interesting. Like a master mechanic who is skillfully trained in vintage car restoration, changing the oil is something better left to another more capable (and less expensive) alternative. So, we are now down to the last 5% of the customer requirements. What can these be? Most likely these are issues only left to the most knowledgeable or senior members of the company. They are the ones who’ve invented the products or started the company. They are the ones who can answer any question, or have the ultimate responsibility of satisfying customers’ needs. They can be the CTO or the owner/president. Or, they could be any group or person given the ultimate responsibility of P&L for the organization. The key here is that they need to be protected by the two other groups (the 80% front-‐line resources and highly-‐skilled 15%’ers) so they can focus on growing the company or making more profitable goods and services. Their time and energy is precious and crucial to the long-‐term wellbeing of the company. Often this person or group collaborates with the 15%’ers on the “secret files” they have to be able to support anything that slips through the 80% front-‐line resources. Consider this: in many large companies today, does the chief engineer or VP of Sales for a Fortune 500 company answer the customer service hot-‐line? Probably not. But I’m sure they have a vested interest in how it’s run and managed. These basic concepts are just the beginning of creating a healthy and well-‐organized customer resource organization. The concept can be used in any organization large or small, and nearly in any industry. In my next post we will explore some more examples so that you can apply these to your own organization, so in time you’ll be able to maintain good customer relations, build on your business and keep or reward key players within your teams.