Changing customers expectations
The 1980s were marked by a growth in consumer spending and a housing boom. Easy access to credit made it possible for people to realise their dreams and encouraged them to spend. With the downturn in the economy came fear and uncertainty about unemployment and the harsh realities of recession left many consumers with debts and homes which had been transformed from investments to burdens.
In the 1990s these experiences have left their mark on consumers. There have been changes in outlook and attitude towards spending. For many, purchases have to be justified on a need rather than a want basis. Customers primarily seek best value for money. Best value for money, in the customer's eyes, is not reflected by price alone. It is a combination of quality (product durability, benefits and service) against the best price. Customers are more willing to shop around for goods to get best value and there is greater reluctance to purchase on impulse.
Satisfying customer needs has become a major strategy for organisations to compete in the rapidly changing markets of the 1990s and, as price is only part of the "value" equation, organisations realise that they cannot compete on the basis of their products and prices alone.
This case study focuses on MFI's Sales Division Strategy launched in 1993. This strategy is based on the simple realisation that the future success of MFI's business depended on MFI's ability to meet and exceed customer expectations profitably. The purpose of every organisation is to fulfil the needs of customers who in turn make it possible to achieve the aims of the business.
When businesses such as MFI become larger, it becomes more difficult to answer simple questions such as:
- Exactly what is it that I do?
- What have I actually done?
- How do I know I've really done it?
- Who among my customers will confirm it?
- What is the evidence that my skills are state-of-the-art?
The purpose of the strategy was and continues to be to develop systems, structures, processes and an employee skills base which would provide the information and skills to act on these issues. The new strategy would help MFI to focus on the real demands its customers make, with the flexibility to respond to customer needs and requirements within the framework of a larger company.
MFI home works
MFI is one of Europe's leading furniture manufacturers/retailers, with over 250 retail outlets throughout the UK and mainland Europe. As a vertically integrated company, MFI manufactures over 50of its total product portfolioand has ownership and exclusive use of the three top brand names in the market place.
In June 1993 the MFI Sales Division launched a strategy for long-term success. The strategy is designed to provide a shared and focused direction, through the clear communication and implementation of measurable initiatives. Implementation is resulting in enormous cultural, physical and operational change which continues today, all of which is necessary to ensure that customers consistently receive the highest level of service available. This is achieved by all employees throughout the organisation in satisfying the total requirements of every customer whether internal or external.
Organisations have both internal and external customers. The truth is that the quality of products and service provided by employees to each other internally is directly reflected in the quality of products and service offered to the consumer. For example, if an employee makes an enquiry to another department within the organisation they should expect to be treated with the same respect as a customer making an enquiry from outside the organisation. This total business approach helps to foster true teamwork and develop total customer care. A simple but effective philosophy is
"treat other people the way you expect to be treated"
MFI Sales Division launched a series of Business Statements designed to communicate its Mission, Vision, Team Values and Commitment to Quality Service.
MFI Sales Division MISSION
"To exceed the sales and profit targets required by MFI"
"We will achieve and sustain a competitive advantage through our commitment to the continuous development and support of our people and products"
"The cornerstones of our strategy will be quality service and teamwork in an open and honest environment allied to the principles of performance management and a continuous commitment to change"
This results in a focused and high performing organisation which consistently exceeds its customers' expectations.
Definition of good customer service
Put simply, MFI does not define good customer service. It is MFI's customers who define what is good and what is bad customer service. The approach MFI adopts is one of constant consultation. Using the feedback it receives it ensures that it not only adapts to meet the demands and expectations of its customers, but exceeds them. Only when this happens can MFI consider itself to be truly focused on customers'requirements.
The strategy launched in 1993 ensures that MFI continues to be one of the exceptional companies leading their marketplace as they move toward the next millennium. The starting point for the strategy is consultation with customers about the products MFI sells, the shopping environment and the service and services which assist MFI in selling its products. MFI uses a number of methods to identify the types and levels of service their customers prefer when shopping. These include:
- Customer Surveys
- Exit Interviews
- Customer Discussion Groups
- Mystery Shopping Exercises
- Internal Employee Forums
- Retail Staff and Line
- Management Consultation
- Head Office Personnel Consultation
- Manufacturers and Suppliers Consultation
- Senior Executives and Directors Consultation.
Sales staff are in the front line and the impression they create through the way they perform is vitally important. Their role is to ensure the highest level of customer satisfaction throughout the entire sales process. Sales staff are only one part of a large team involved in ensuring customer satisfaction. Internal customerssuch as Sales Support Staff, Store Designers, Administrators, Product Designers, System Designers are also involved in satisfying customers and are vital to the success of the organisation.
MFI firmly believes that everybody within the organisation has an important role to play. Service is not exclusive to Sales Staff and Customers. The quality of service received by external customers is determined by internal customer relationships. This approach helps to encourage teamwork, makes everybody within the organisation focus upon customer care and supports a Total Quality Management ethos.
Total Quality Management is supported by a method known as Continuous Improvement Process Management which allows all employees to contribute towards customer satisfaction through a system of continual review and action.
Continuous Improvement is a process which tries to ensure that a quality approach to service is not just a one-off device designed temporarily to improve service levels, but is a continuous programme built into every area of the business and helps to emphasise that all employees within the organisation are part of a quality chain which begins and ends with MFI's customers.
Benchmarking involves making comparisons with other organisations in the marketplace in order to monitor the quality of standards of service. MFI's Customer Service Strategy sets out a statement of intent regarding the standards to which MFI must perform.
MFI is committed to setting the benchmark for service within its marketplace. To achieve this, the company will, on an ongoing basis, measure and upgrade its internal and external requirements for the provision of quality service.
"This will ensure that the service benchmarks applied within our Company consistently meet the service requirements of our customers."
Responses and remedies to customer complaints
At every point MFI seeks comments from its customers. It is well known that the majority of British customers are unlikely to complain and only show their dissatisfaction by never returning to make another purchase. There is also a common belief that if a customer receives poor service they will tell approximately twelve other people about their experience whilst customers receiving good service will only tell four!
MFI encourages customers to comment on the services and products it offers, not only through questionnaires or forums but also through daily contact with employees. Line management and staff alike are encouraged to speak to their customers throughout the purchasing cycle to ensure that they are satisfied with everything that is happening.
Not only this, but a percentage of customers are contacted by Branch Management after their purchase to ensure that they have enjoyed their shopping experience. In addition, written communications are displayed throughout each store about the products, service and guarantees MFI offers. The customer receipt also offers a message which reaffirms MFI's commitment to seek comments from customers.
The desire to achieve 100customer satisfaction is at the heart of everything MFI does. MFI continues to work at ensuring all of its customers are satisfied and whilst it still receives complaints regarding its products and services there is a deep and lasting commitment to get it right first time, every time.
Employees in the branches are empowered to resolve complaints immediately, from an apology (which most businesses forget!) to a cash/goods allowance. The minority of complaints not resolved at this level may require the intervention of the General Manager or Sales Manager.
In addition to MFI's code of practice and customers' statutory rights, MFI has adopted other institutions' codes of practice in support of the products and services offered. For example, Qualitas, the Furniture Industry's standard organisation and FIRA, the Furniture Industry Research Association are industry-recognised bodies offering their own hallmark for quality and service, guaranteed by codes of practice which any member organisation must adopt. MFI is a founder member of Qualitas and has its product quality checked and approved by FIRA. MFI's philosophy is to make it as easy to complain as possible.
"MFI encourages complaints"
By doing so, MFI can identify what is going wrong quickly and prevent it from happening again.
Customer Complaints Procedure
Any complaint received results in action to ensure that it is not only the customer complaining who is fully satisfied but, more importantly, each issue raised is analysed by the whole team and procedures are implemented to ensure that this problem does not happen again.
This form of action planning within each branch is undertaken by representatives of each function within the store who form groups known internally as Continuous Improvement Groups (CIGs).
Each complaint follows a set procedure which results in the formulation of an "Action Plan" based upon:
- How the complaint occurred
- Why the complaint occurred
- The action required to resolve the problem
- The action required to ensure that a problem of this type does not occur again
CIGs adopt the working practice of Prevention as well as Cure and are networked throughout the company with Continuous Improvement Teams (CITs). If a customer care issue is noticed at a number of branches, it is brought to the attention of the Improvement Teams who identify the strategic means of dealing with common problems.
The CIT, CIG and Head Office Complaints Procedure includes the recording of all details regarding customer complaints onto MFI's Customer Service Database. This reports:
- Number of complaints
- Frequency of complaints/repeat complaints
- Types of complaint
- Time taken to resolve
Information is reported on a regular basis to all CITs, CIGs, Heads of Departments and Directors to ensure that any common problems are identified quickly and strategic action is taken to prevent them occurring again.
Customer communications is the single largest investment in MFI's business outside its investment in people. Effective communication results in every single member of the organisation understanding the expectations of external customers. All external written communications follow a set process designed to make messages clear and concise.
Methods of communication are vast. They vary from globally promoting products and services on television, radio and in local and national press, to contacting customers on a one-to-one basis. MFI's aim is to promote products and services with the minimum of confusion. Feedback from customers has influenced a whole range of advertisements.
Catering for customers with disabilities, financial restraints, adults with young children and elderly people
There are many ways in which MFI caters for different customer groups who have a wide range of service needs and requirements. Consultation with customers highlighted the demand for an approach to deal with special customer needs. Customer discussion groups, which included people with such needs, assisted with a major change programme. New stores are designed as Open Plan to reduce the difficulties encountered by customers with mobility problems. Customer Planning Areas allow parents with children the space and privacy to relax while their kitchen/bedroom is being planned. Home Visits, Installation and Delivery add to the range of services to assist people who have difficulty in visiting an MFI store. For those with financial restraints, MFI offers a wide range of easy payment options.
Building customer relationships
Building long term relationships with customers is one of the most important aspects of service provision. Many of the ways in which MFI communicates business messages are used to build stronger relationships with customers. Promotions and advertising, magazine articles and features, leaflets and brochures, all assist in informing customers of the products and services on offer. As well as the training and development of staff to build a rapport with customers, other face to face initiatives include:
Preview evenings inviting customers to visit stores outside working hours to view the new environment or new products.
Customer databasing enables MFI to contact customers with follow-up calls.
'Straight' advertising helping to build a credible, open and honest approach to advertising.
All of MFI's customers are treated as individuals. This caters for the varying demands made by its customers:
From: a customer walking into a store wanting to purchase a small item, or order their own kitchen without any assistance from a consultant;
To: a customer who wishes to receive a home visit where they require the skills and support of one of MFI's consultants to measure, plan and arrange installation of their kitchen or bedroom.
Customer care training
Comprehensive staff training and service evaluation help to measure MFI's personalised approach to service. Customer care training is included in all of MFI's formal training programmes as well as in informal sessions held within stores. One-to-one briefing, team briefings, role plays, coaching and monitoring sessions all have, at some stage, customer care as their background.
Finding out what customers want
The starting point for everything MFI does is feedback from customers. This ensures that MFI builds systems and processes which ensure that MFI has the information on which to build a business for the future. This information helps to focus on what external customers want with regard to the level of service given, how it is offered, the types of products sold, the merchandising and display of products, store design as well as marketing and promotions.
Standing out from a crowd
MFI has established a culture of Total Customer Focus:
"THE STARTING POINT FOR
EVERYTHING WE DO IS FEEDBACK
FROM OUR CUSTOMERS"
"IF OUR CUSTOMERS DON'T WANT
IT WE DON'T DO IT"
Customer care is at the heart of everything MFI does. Top down commitment to the quality of service empowers front line staff to deal with real issues quickly and effectively, while at the same time influencing long term business development for the whole group.
Benchmarks set a minimum standard of service a customer can expect when he or she walks into a store.
MFI's divisional strategy was developed and will continue to be developed with the co-operation of customers. By identifying what MFI wants to achieve and then systematically researching it, MFI has developed a strategic plan for success. The measure of the success of a business is its performance. Since the new strategy has been introduced:
- Sales have grown year on year;
- Productivity per employee has increased year on year;
- MFI has received national recognition for the service it provides and the training and development it offers;
This has been against a background of economic insecurity and a purchasing public more cautious with money. The commitment to customer service has been one of the major factors responsible for this success. It has helped MFI to tighten its focus on the understanding that it is the Customer who is of the utmost importance in any organisation.
After all: The Customer is King
MFI Furniture Group | Developing a customer focused sales strategy