Strategic Planning

By Tim Connor, Rodeo! Performance Group, Inc.

Concerned, nervous, panicky, discouraged; any of these terms could describe the feelings of American manufacturing companies when considering their offshore competition. But being competitive involves a LOT more than just cutting prices, and there are actually several areas where U.S. companies can look to compete. Let’s see what those are.

American companies historically are driven to look at the bottom line. This is in contrast to German companies, which tend to focus on technology, or Japanese companies, which tend to focus on geography. While the bottom line focus does show a snapshot of company performance, it reveals nothing of what generated that final number OR what can be done to improve it. BUT we use it anyway to make many decisions, and we can be fooled by what it seems to be telling us.

More than the Bottom Line

How’s that…you ask? Well, let’s get really simple. Why do people buy from us in the first place? It can be for a number of reasons, among them quality of the product, friendliness of the service, alignment to particular requirements, responsiveness to needs, ability to deliver to a schedule, and…oh yes! Cost of the product! Now our purpose here is to find ways to be more competitive, so let’s break that list down and look at it systematically.

Quality of the Product

Coming right down to it, what IS quality? It could mean that the product will last a long time. It could be that it is particularly suited to the job it’s supposed to do. It could mean that it really looks good and is pleasing to handle. Putting all of these in a nutshell: quality means the product is well made. The customer buying your product is really the one who makes the final judgment on the quality of your product, even though he may have initially heard about it from someone else. That judgment takes time to develop, but once it’s given, it becomes part of the reputation of the company producing it. So look first at the quality of your product – how does it measure up?

Measure up, there’s a good phrase. If you want to really measure the quality of your product you have to know how the customer defines it. While quality is produced by the manufacturer, it is defined by the customer. So right off, you have to know what they want. How are you going about doing that? The first step in improving your competitiveness involves re-evaluating customer requirements for quality, and then seeing how you’re doing against those.

Friendliness of the Service

One of the really interesting statistics floating around out there is that only 15% of manufacturing is actually related to the manufacturing line – the rest is service. Think about it. Evaluating customer needs, dealing with customers before the sale, making the sale, delivering the product, following up with the customer, answering questions or training, servicing the product…what are all of these? Right! They are services. How competitive are you in each of these areas? Have you ever systematically evaluated how you are doing?

In service, especially immediately before the sale and in customer follow up, American companies have a real opportunity to be much more competitive than those who have outsourced these functions. Why is that? The answer lies with idiomatic English. It is one thing to learn English in a university and speak it well, it is wholly another thing to know the idioms that accompany American speech. Think about it. Have you ever been on the phone with a foreign customer service rep with a question, and gotten the phone equivalent of the “deer in the headlights” look? There is almost nothing in existence that is better guaranteed to raise your blood pressure a couple of dozen points!

Welcome to My Nightmare!

A recent experience by one consumer seeking to buy new cell phones and service for his business comes to mind. The guy had found a great deal, and put the order in for the phones and service online; so far, so good. But then an email came telling him there was a glitch, and he needed to call this 800 number to get it straightened out. The number put him in touch with an American company’s phone center somewhere in India (they were cutting costs by moving it offshore) and the resulting experience finally caused him to cancel two different purchases that involved four cell phones and several long term contracts. Now, what was the actual bottom line savings to that cell phone company? The loss of that sale probably amounted to about $2,000 a year – but how often did this happen in the course of that month – or that year? What was the overall loss? Interesting to consider, huh? And what about the reputation of the company? Do you think that businessman will be likely to purchase from them in the future?

Summary

So there is a very real opportunity to increase both your sales and your competitiveness by having service people who are well trained in customer service, who know your proucts, AND who are able to communicate easily and quickly with your customers. You are saving them time and money, and they are much more likely to continue with you in future business.

Part 2 to follow!