Is efficiency and customer service killing profits?

We’ve all been taught that the most important things we can do in business are taking the best possible care of our customers and running the business operations as efficiently as possible, right? What if I told you this was not true and this potential limiting belief is costing you a lot of profit, as well as some sanity? Stay with me here, I know this might sound crazy at the moment, but keep reading and hear me out.

Way back in April of 1994 when I took the reins of my own drain cleaning business and made the leap into entrepreneurship, I was ignorant. Not because I was dumb or incapable, I simply did not know what I did not know. I had never run my own company, much less been completely responsible for how to take the best care of every single client while trying to keep things operating as smoothly as physically possible.

I did everything I “knew” to make my new venture successful and profitable. I purchased the latest and greatest “brick” cell phone, installed two-way radios in service trucks, and had the best pager and answering service available in my market! I started out by myself and personally ran every service call regardless of the time of day because I was a 24-hour service company. All in the name of efficiency and customer service.

I read about and bought into perspectives like the customer is always right, and if your competition is saying it in their marketing, it must be true. Now, after a very educational 28 years in business, I have learned both of those statements to be completely false. No, the customer is not always right! Their perspective may be that they are right, but some customers are simply not informed enough about technical aspects, logistics and pricing to have an educated perspective of what’s “right.”

Don’t get me wrong, the customer is the reason we’re in business, and therefore, they are mission-critical to our success — but we’re not being honest with ourselves if we believe we are wrong and they are right in certain circumstances. Now, what about keeping our unique advantage and outsmarting, out-operating and out-pricing our competition? Be extremely careful here as well my friend.

Back before caller identification technology and universal transparency of information, I used to personally mystery shop my competition. I was seeking pricing information, how busy they were, how quickly they could respond for service and any area I could gain a competitive edge based on how they were operating.

One of the greatest lessons I ever learned was about advertising. Every one of my major competitors offered, or should I say advertised, 24-hour service — 365 days a year. So one night, after I got back from a late-night call, I decided to see how many competitors were true to their word about all-hours service. You can imagine my surprise when I discovered that only two of my competitors even took my call at 11:30 p.m. All the others either went to an answering machine or the “on-call” person did not return my call.

Wait, what? They advertise this service in the Yellow ages. I thought it had to be true. Remember earlier when I mentioned I was ignorant as a young and fragile 23-year-old business owner? It was less of a business and more that I owned a bad job at that time. I thought business was like life; you did what you said you were going to do. I was starting to understand business and marketing at a whole new level.

One of the most important mentors I ever had said, “Kenny, you can customer service yourself right out of business.” At that time, I didn’t ever really understand the entire scope of that statement, but what truth he had spoken. That time in my career was the beginning of my success. I started to understand and implement strategies for servicing a specific niche of the market. Focusing on certain demographics and psychographics with marketing and advertising. I began pricing my services for profit and making the value of the service I provided outweigh the cost of the commodity-based models my competition was offering.

As we grew and stayed true to our own specific business model, we became the largest, highest-priced, most visible, highest-rated, most referred and most profitable company in our market. We did not offer certain services, serve a certain geography or even service certain types of customers: Commercial buildings, property managers, vacation rentals, etc. By becoming clear on who we were as a company, who we wanted to serve as that company and exactly how we wanted to go to market while offering that service, we completely changed an entire market when it came to plumbing, heating and drain cleaning services.

Fast forward to today and the current business landscape. How can you refocus on what’s important to you, your team and your clients in order to be the very best at what you do and get what you want? What are the internal changes necessary to better take care of the most important clients you have? (Your own team members). How do you need to make certain shifts in operations to make sure you’re maximizing every interaction you have with your team and your clients?

As the founder of The Blue Collar Success Group, I’ve been very fortunate to have coached a lot of companies across the U.S., Canada and Australia. Regardless of market conditions or geography, all companies have a common struggle when it comes to the balance of customer service and efficiency. Many companies still dispatch based on geography and team member availability. This is simply done in the interest of efficiency. While they mean well, they are costing the company money as well as costing the client the best possible service experience. There was a time this strategy may have been OK, but not anymore. In today’s complex world of technology, client needs, sales and communication, who you send to a specific type of call is far more important than how efficiently you get them there.

Make sure to look at your operation from top to bottom. Do a little self-checkup from a service and profitability standpoint. From the time the phone is answered to the time a quality assurance follow-up call is made. Where are you still operating based on a model that used to work, but now needs to be adjusted?

You need clients. You need team members. You must have profits. Balance these three key components while fulfilling your company values and this great game of business becomes more fun and rewarding than ever before.