Anticipatory logistics in the corporate world

Introduction

                        Anticipatory logistics is the process of predicting future trends in customer requirements through the use of information systems, technologies and procedures. It also entails sustaining that need. Anticipatory logistics is applied generally in the US Army; however, the concepts are so similar to supply chain management that the former can be applied in the corporate world too.

How to merge supply chain management and anticipatory logistics

                        If the latter concept has worked very well in the Army, then it can work well in the corporate world too. This is because the business world is largely governed by supply chain management. Metz (1988) explains that the latter term encompasses the process of procuring, producing and delivering services to consumers. Similarly, the same comparison can be made in the army. The army also needs to deliver logistics to its combat forces.

                        There are seven common components between supply chain management and anticipatory logistics. This commonality is a basis for merging principles in anticipatory logistics into the corporate world. Both the army and the corporate world consider the following; supplies, manufacture, procurement, consumption, warehousing, order management and transportation. Despite the fact that there may be some inherent differences between the latter, the overall components cannot be ignored. Consequently, what applies in the army can also apply in business.

                        Both the army and the business world have to meet two diverging needs. Any business would like to expand its operations while on the other hand meet the needs of its clients. These diverging needs require an external principle which is supply chain management. Since consumer needs are always changing by the day, then businesses would be better placed to handle future consumer needs of price and availability. Anticipatory logistics are the face of supply business management’s future because they could be the means with which businesses meet these needs. Additionally, the army has to meet two diverging needs; to reduce logistical footprints and the need to satisfy combat forces. The latter needs are somewhat similar because the military still needs to ensure that their combatant forces receive supplies on time and also to lower costs. Businesses need to do the same for their consumers. These common needs provide a platform for merging anticipatory logistics used in the military into the business / corporate world. Since the army uses transportation, information and communication technologies and order management to cope with these needs, their technique can also be directed to the corporate world. (Lenzini, 2002)

                        Businesses can apply anticipatory logistics through the use of tactical internet. The army uses this to predict the needs of specific combat units and businesses may use this to predict the needs of their clients in the future. Through the latter method, the army is also empowered to determine future failures in the seven categories or to monitor the status of the supplies. The same can be said of the business environment. Through tactical internet, the corporate world can prepare for any shortages in storage, distribution, transportation or any of the other seven components. On top of this, anticipatory logistics can also assist all the various supply units contact logistical leaders in the supply chain thus equipping them for any future challenges.

Challenges that can arise out of applying anticipatory logistics in the corporate world

                        The corporate world uses supply chain management in a broader spectrum than the Army. Consequently, it may be very difficult for the latter to translate this application from just one small aspect into the rest of the business. Supply chain management emanates from the supply chain which is made up of all the stakeholders involved in the production process. Consequently, supply chain management ought to incorporate all the needs of the suppliers, consumers, wholesalers, storage dealers, procurers, other retailers and end users. On the other hand, the army only applies anticipatory logistics to its mission requirements.

                        There are certain differences in the way the military and the corporate world handle their supply chains. Although both groups have seven common components as mentioned above, there is no need for maintenance in the corporate world. Additionally, transportation, distribution and warehousing are only applied from the supplier to the consumer. On the other hand, the military needs to apply this function for the consumer to the army and the other way around. These disparities could affect the manner of implementation in both groups.

                        Besides this, the corporate world requires six essential success factors in supply chain management. These factors are totally different from those used in the military. Consequently, it is up to the corporate world to figure out a way of satisfying the latter two needs. The six essential components for success in business include environmental concerns, government regulations, competition, globalization, and information and communication technology. (Louis et al, 2006) On the other hand, the army requires the following for success; mission requirements, environmental concerns, rules in the department of defense, whether there can be joint operationability and information communication technologies. As it can be seen, the corporate will have to identify some of the disparities between the army and itself and look for ways of closing the gaps when dealing with anticipatory logistics. This may require a lot of creativity.

Conclusion

                         It is possible to apply anticipatory logistic in the corporate world, however, care must be taken to note the differences between the two groups. The mot outstanding among these differences is the fact that the military applies anticipatory logistics in a section of it operations while the corporate world applies it in the whole supply chain.

Reference:

Louis W. S et al, (2006): Marketing Channels’, Prentice-Hall, 7th Ed.

Lenzini, J. (2002):  Armed forces, Logistics, retrieved from http://proquest.umi.com/pqdweb?did=183937041;sid=1;Fmt=4;cli entId=29440;RQT=309;VName=PQD/Sep/Oct 2002. Pgs Vol. 34, Iss. 5; pg. 11, 3 pgs

Peter J. Metz 1(988): Supply Chain Management, Supply Chain Management Review,

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Attrition Rate in the Call Center Industry

Table of contents

Attrition has been an evident problem for every organization due to either jack of appreciation or lack of proper job sculpting. But what is attrition? Simply put, it is the reduction in the number of employees through retirement, resignation, etc.

Attrition affects two things:

  1. the morale of other employees;
  2. the financial position of the organization.

The group chose this topic because we are greatly interested in such field. The group is curious as to why the rate of turnover in the call center agency is high and what is the effect of this to the call center organizations.

Why do these employees leave their jobs as call center agents? Is it because of the unjust compensation that these call centers are providing or is it because call center agents in general are not happy with what they do? We can draw many conclusions but at the end of the day, conducting a research would give us peace of mind.

Significance of the Study

The significance of the study is to be able to give emphasis as to why the rate of turnover in the call center industry is high. The group will only focus on the causes and the effects of attrition in the said industry.

The study would serve as a guide and would be of great help to call center organizations in maintaining employees in their company. Furthermore, the study would be able to show the importance of the call center industry in the city of Manila.

Problem and objectives problem

What are the causes Of attrition and how does it affect the call center industry?

Objectives: To explain what attrition is and its difference from turnover To give emphasis on why call center agents resign To determine the factors of attrition To show how attrition affects the call center industry To present the facts obtained through out the whole research .

Assumption and hypotheses

Call center agents resign from their currents posts because they are not pappy with what they do. There will always be that feeling of being unsatisfied and it will always bother them. Some would think to themselves, “Why am I doing this when can do so much better. ” Most fresh graduates or undergraduates who are in need of fast cash apply at call centers to have something to do for the mean time but after a while, they move on, leaving the organization to find quick replacements at which before that can do so, the financial position Of the company will be affected.

Scope and limitations

This study focuses on the cause and impact of attrition in the call center industry with regard to the turnover rate of employees, why call center agents leave call centers, and how the loss of employees affect these call centers. The study will only gather respondents that are call center agents that are employed within the jurisdiction of the city of Manila.

Definition of terms

Attrition – a reduction in the number of employees or participants that occurs when people leave because they resign, retire, etc. And are not replaced.

Burnout – physical or mental collapse caused by overwork or stress.

Call center – an office set up to handle a large volume of telephone calls, especially or taking orders and providing customer service.

Call center agent – basic employee of a call center Compensation – something awarded to someone.

Customer service – provision of service to customers before, during and after a purchase; a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer expectation.

Economy – consists of the production, distribution or trade, and consumption of limited goods and services by different agents in a given geographical location.

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Customers or clients

Table of contents

Calculate the average length of credit which your business is allowing–or which your customers or clients are taking. This can be calculated monthly, quarterly or even annually but ideally a monthly figure should be extracted. The only thing worse than bad. news is bad news which arrives too late for remedial action The calculation required is: Total outstanding debtor balances at month end (the amount you are owed in total) / Sales value for 12 months period ending at the same month end x 365 = Average number of days credit you are allowing

For example, if you divide your total outstanding debtor balances of ?? 10,000 by the sales value for the 12 month period of 100,000 [pounds sterling] and multiply that by 365, you find that you are allowing an average 36. 5 days credit to each debtor. Establish this calculation as a regular routine. Remember to adjust the annual sales value each time you make the calculation by deducting the sales value for the most remote month and adding the most recent figure.

Keep a very simple graph which will show you whether the average period for which you are allowing credit is increasing or decreasing. The graph will look like this: Look for movement between the end of one month and the end of the next AND look for the trend revealed by the graph as a whole. This particular approach will emphasise length of credit being allowed or taken rather than the amount. Both time and amount are relevant to profit and to liquidity. Making special arrangements can backfire.

No company is so large and important that you should let them ignore your terms. Rather than damaging goodwill, insistence on firm, simple settlement terms will create a healthy respect for your financial efficiency. Remember, it may only take that one exception to drain your business of its cash. All verbal arrangements should be confirmed in writing. A credit application form simplifies this process. If the customer is a company, make sure that you get a personal guarantee for payment by one or more of its Directors.

Consult your solicitor for advice about the Credit Act and how it may affect your business. Ensure that a credit ceiling (a maximum amount of available credit) is established for each account customer in view of their ability to repay their debts.

Read the financial press and treade journals

Due to their day-to-day responsibilities, many small business operators neglect the “big picture” and are out of touch with changes in the marketplace or the economy. Financial media and trade journals are a cost-effective way to get the “feel” of your market.

Where available, subscribe to an appropriate credit reference bureau. 1. START AT THE TOP When attempting to settle accounts, you should deal directly with the decision makers. Discussions with other people on overdue accounts can waste time. It’s usually far quicker and more effective to deal with the person whose signature appears on the cheque. By all means send a letter, but you should follow it up with a personal visit if possible.

Keep your promise

Don’t threaten legal actions unless you intend to go through with it.

Issuing empty threats will probably mean you will wait even longer in the future. 1. WATCH TRENDS Gauge how well you are controlling your credit with some easily understood measures such as average day’s sales outstanding, results against targets and proportion of disputed accounts. Other warning signs to watch are changes in cheque signatories or cheques coming from other than the debtor. When this happens, inquiries should be made immediately.

Spread the message

Communication is the key to preventing or resolving problems.

All your staff should be well informed of credit control procedures and the reasons behind them. Your ability to communicate internally will probably be linked to your business ability to control in the marketplace. Regular staff meetings to discuss credit will assist this communication and will improve your credit management. The ICICI Group was formed with the objective of supporting India’s growth and development.

While we have transformed from a development bank to a diversified financial services group, this vision continues to form the core of all we do. We partner the growth of Indian business and help individuals improve their quality of life, through convenient access to financial products and services. We are focusing on the full spectrum of financial services needs, from banking in rural areas to banking for the Indian community overseas. In addition to financial services, we support initiatives for socio-economic development through projects focused on healthcare, education and access to markets.

We seek to improve access to opportunity, and the ability to make the most of it, for businesses and individuals – to help people move towards a better life.

Vision

To be the leading provider of financial services in India and a major global bank.

Mission

We will leverage our people, technology, speed and financial capital to:

  1.  be the banker of first choice for our customers by delivering high quality, world-class products and services.
  2. expand the frontiers of our business globally.
  3. play a proactive role in the full realisation of India’s potential.
  4. maintain a healthy financial profile and diversify our earnings across businesses and geographies.
  5.  maintain high standards of governance and ethics.
  6. contribute positively to the various countries and markets in which we operate.
  7. create value for our stakeholders.

Bank is India’s second-largest bank with total assets of Rs. 3,562. 28 billion (US$ 77 billion) at December 31, 2009 and profit after tax Rs. 30. 19 billion for the half year ended December 31, 2009. The Bank has a network of about 1,697 branches and 4,883 ATMs in India and presence in 18 countries.

ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia.

Our UK subsidiary has established branches in Belgium and Germany. ICICI Bank’s equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). HISTORY OF ICICI 1955 1. The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated at the initiative of the World Bank, the Government of India and representatives of Indian industry, with the objective of creating a development financial institution for providing medium-term and long-term project financing to Indian businesses.

Mr. A. Ramaswami Mudaliar elected as the first Chairman of ICICI Limited. 2. ICICI emerges as the major source of foreign currency loans to Indian industry. Besides funding from the World Bank and other multi-lateral agencies, ICICI was also among the first Indian companies to raise funds from international markets.

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Customer value in the service industry

Over the years, there has been a tremendous increase in the number of the service industries in the world. This has been prompted by the rising demands for the services internationally. However, large numbers of the same industries have been very unsuccessful in their services provision to the consumers (Pfeifer et al, 2005). This has been attributed to the poor customer value consideration in the services provided by these industries to the consumers. In business, the perception and suitability of the final products determines its overall productivity and thus success.

They must establish the correct business operation environment with the design that ensures an overall high quality value in the services that assist in defining and thus carving an enviable niche for them. This paper explores the customer value in the service industries with an aim of establishing the major importance of implementing the customer value processes in the services industry. Also, the paper evaluates the implications of reduced customer values considerations in the services industries sector.

Besides, the paper gives a clear comparison of the different industries that have applied the concept in the worlds with varying levels of success. Finally, it gives a conclusion and outlines recommendations that are necessary for implementing customer value procedures in old and the new industries in services sector. Nature of customer value and theory of value in the service industry. According to the United States Federal Transit Administration (1999), customer value in the services industry involves the ability of the remitted services to meet the demands of the consumer and the recognized standards at all times.

Being considered as the main determinant of the suitability for different products, the value should be extended beyond the phenomenological conceptualization by the consumers to include other creative forms of intrinsic utilities which serve to differentiate and bring more consumers to the industry. Customers being highly flexible, the value must involve envisioning and possession that binds them to the service and thus increasing and sustaining the profits of the company or the firm for longer.

The theory of value seeks to underscore the reasons for implementing the customer value in the service industries at all times. The concept originated from in the ancient philosophy where the idea of good and evil was coiled by the Greeks (Pfeifer et al, 2005). Currently, it seeks to establish the overall good that the final consumer services possess in terms of the intrinsic sociological, psychological and economic capabilities to meet the customer intentions and desires.

It argues that the services must be able to give the highest possible quality of the services to the consumers for guaranteed comeback for the same services. Unlike in the products provision where quality and value can be increased through highly mechanized systems, the services industries require partial or full time social psychological considerations of the people involved in the process (Jay et al, 2001). Importance of engaging and implementing customer value processes in the service industry.

Retaining and attracting more customers Customer value processes in the service industries form the building blocks of ensuring that the quality of the services getting to the consumers is of the required standards. To begin with, it is important as a key aspect in retaining the customers to the industry services at all times. As indicated earlier, the production of the services and products has greatly changed from mass production to customer consideration through increased and enhanced specialization.

Understanding that the consumer judgments are not always based on the direct quality of the services, the marketers should therefore seek to include a more inclusive satisfaction view to the consumers. In the financial industry, the immediate repute of the company both locally and internationally, ensures that the customers are fully glued to the bank for all their financial and related services. JP Morgan & Chase Company effected the mergers with other major banks in US to build its capital basement necessary for enabling it satisfy the consumers in all the services it gave to them.

Following the establishment, the company managed to increase it’s customer base world wide from the high quality services it gave to them (Blazey, 2008). As a result of establishing the correct intrinsic and external derivatives of the various services given by the companies, a strong long term customer-service-industry relationship is developed. Hospitality industries in Venice have for a long time recorded large number of tourists visitation attached to the consumer’s prior satisfaction experience in the region.

Over 42% of the total visitor to the island in the year 2003 had previously visited the area. The immediate perceptions created to the visitor are greater than the actual enjoyment that they derive from visiting the beautiful beaches (Bernard ; Wolfgang, 2005). Increasing the overall productivity from the industry. All over the world, it has been established that service industries are the best paying owing to the fact that they consume less raw material compared to the material based products. Whereas this statement has a great element of truth, it is not necessarily true.

Services industry, like the material based ones, requires very high investment and monitoring to ensure that the immediate returns are high. To maintain the overall production and the immediate returns from the industry, it is important to integrate the modern means of services delivery to the consumers as they form the main source of the industry’s income. Blazey (2008) argues that like the other businesses struggle to ensure that they give the best to their staff and other employees, the service industry too ensure that the employees are internationally remunerated to boost their morale for their duties.

Insurance industries in developing countries have been accused of offering less quality services to the consumers who have as a result deviated to major banks for their immediate insurance related services while offering to fore go others. However, the top 20 insurance companies in US recorded a clear increase of productivity for the years 2005, 2006 and 2007 owing to their speedy response to life, health & Medical as a well as property destruction compensation services under the different agreed terms.

Understanding and emphasizing on the intricacies that focus on the quality of experience, setting the right expectations based on the overall ideology that the consumer is always right becomes easy. All the employees are therefore results oriented and motivated to maintain the high standards in the industry. Building the local and international business repute. As indicated earlier, customer value acts are the key to success for the service industries all over the world.

Consequently, a combination of marketing, sales, customer services and technologies are engaged for ensuring high customer value and thus satisfaction. Business repute and fame that makes it’s immediate products to be sought has been indicated to depend on the perceived quality, perceived expectations and the perceived value of the immediate services given to them. As a result of the high quality and the great value that New York times give to the people, it is highly sought on a daily basis through out the year.

The magazine has therefore established a niche out of the people’s confidence that carves an immediate good repute amidst other numerous similar magazines (Jonker et al, 2004). In addition, standards have already been established to denote levels of the expected customer value that accrues to the delivered services. ISO certification like 1400, 1500 and 1600 ensures that the industries are fully compliant and committed to not only to offering high quality standard goods, but also reducing the resultant negative impacts like environmental degradation.

This is done by ensuring high quality staff, facilities and procedures are used in the production and giving of these services. Hotels are categorized with classes as a key indicator of the high level value a consumer would get by visiting them. Six, Five and Four star hotels have the best facilities for people’s satisfaction. Hotel Britannica and Sarova Chains of Hotels is five star in the ranking and posses very positive repute about their comfort internationally (Blazey, 2008).

Managing competition in the highly dynamic world Globalization and international outsourcing that have seen major industries open international offices all over the world, have served to increase the overall competition by the different firms and industries in their operations. As a result customer value that yields immediate and latter satisfaction is required to effectively manage this high competition. As indicated earlier, retaining customers has been considered as being easier that acquiring new ones in the industry.

To ensure that the consumers are fully attached to their different service industry providers, creating customer lifetime value is helping greatly to reduce the competition. Induced customer company relationship that ensure all consumers are able to access their money everywhere though automated systems have ensured that international banks like Barclays and Standard chartered remain highly competitive to the others. Increased innovation, that brood new technology application determines the giants and weaklings in the industry.

Due to the massive invention and innovation that brings the real life in the world to the people’s living rooms, National Geographic have won the hearts of many people as the correct and precise informer on the real life in the wild. Information technology has acted to strongly increase the accessibility of information to the people world wide. With every body going digital in the 21st century, the overall customer satisfaction has been greatly enhanced. Therefore, the largely wielded trust from the consumers on the Google and Yahoo will take long before being toppled (Blazey, 2008).

As a result, bulk information and pictures transfer as a well as learning and communication with the people who are far away with ease, has been indicated the best innovation of all times. Implications for failure to encourage superior customer values services in organizations. Causes of poor customer value consideration To clearly understand the implications of not practicing high level customer value integration in all the services provided by an organization, it is important to underscore the major reasons that make them fail to implement it.

Poor leadership and management acts as the major recipe for poor planning and thus poor customer value consideration. Lack of visionary and transformational leadership that would ensure high innovation and application of various aspects through effective teams, kills the staff morale as it is short sighted and unfocused. In their findings, Bernard and Wofgang (2004) noted that lack of proper customer feed back had reduced the customer value emphasis mainly due to lack of competition from other similar organizations.

Also, lack of adequate financial resources that would ensure adequate advertisements and improvement in the quality of the services also kills the long term customer value. Harmful competition on the other hand may kill the young companies as they are sealed from penetrating the markets by the large investments holdings which are already established. Reduced sales and profits from the organizations. As indicated earlier, organization customers are the most important component for enhancing increased sales and thus the accruing profits too.

Poor emphasis on the customer value from the organizations results to their immediate shift to other organizations or alternative services. Over time, the ability of the customers and the public to evaluate the value of the services delivered has increased dramatically. While some may directly complain to the management of the organization, majority tend to keep quiet making it appear as if everything is okay with the product. Consequently, the long term good will of the customer association with the organization is lost and he may disassociate with all of its products (Jonker et al, 2004).

Understanding that the consumers live in the social ties with their neighbors and the community, the spread of the gospel on poor customer value may become a bush fire and spread to the whole region easily making the organization to get large losses. This reduction in sales of the different services culminates to reduction in the overall profits for the organizations management and other running activities. Unlike majority of the developed world, the developing countries remains behind in the levels of profits they collect from the services organizations.

External influence of the political power and high levels of corruption in the management that lead to less qualified people getting to the managerial positions, lowers the customer value of services from these organizations greatly (United States Federal Transit Administration, 1999). Collapse and loss of jobs as they succumb to competition. As indicated earlier, the management of many organizations after flourishing for along time with little competition tends to make them ignorant of the customer value in their services provision.

As a result new technology acquired through immediate outsourcing and the looming globalization has seen new players emerge with innovative applications that are more attractive to the customers. By the end of the year 2008, 11 banks had collapsed in US from low level customer value services provision. Though this was greatly tied to the great economic crisis affecting the world, only those banks with stronger customer value emphasis and long term relationship ties with their customers are managing to survive.

With the service industries increasingly employing more people to work in them, succumbing to competition leads to major losses of employment (Blazey, 2008). Reduced levels of innovation and invention in the industry. Customer values as defined by Bernard & Wolfgang (2005), entails enhancement of the “end user” services utility, benefits, quality and thus overall satisfaction worth or more than the value of the amount actually paid by the customer. Innovation and invention acts as the main support to ensure reputable quality for the services given to the consumers.

With less emphasis on the quality of the services to the consumers, the leadership discourages the employees from innovating new ways of satisfying the customer. During the de-regularization and liberalization of the US airlines in 1970s, the immediate success of different companies was totally based in the ability to innovate high customer value services. Less innovative companies were unable to establish new methods schemes and services that would attract and retain customers for continued profitability.

Therefore, their customers shifted to the more innovative air lines like Virgin Atlantic and prompted their companies either being bought or merging with others as the only survival tactic (Jay et al, 2001). Poor economic development in the regions of occurrence According to Bernard & Wolfgang (2005), having less consideration for the consumers’ value in the service industry indicates possible retardation in economic growth of different countries and regions. Increasingly, many countries are depending on hospitality industries to substitute for their immediate economic growth.

Their lack of total value remittance in the services delivery may greatly reduce the economic basements of these service dependent countries. Thailand and Italy have in the last five years relied heavily on tourism in their regions as part of the main source of government income to drive their economic activities. Majority of the third world countries have failed to ensure high value tourism and thus the industry is poorly developed in the middle of the spectacular visitor attractions in their countries. Conclusion.

High level customer value in the service industry serves as the most important aspect for enhancing its suitability, profitability and sustainability in the fast developing world. Therefore, careful application and design of all the resultant services being given to the customers should be emphasized. All the intrinsic and the extrinsic evaluation and revaluation should be clearly established with clear understanding that the overall customer satisfaction is dependent not only on the visible pleasurable continuum, but increasingly on the bundle of direct and indirect utilities that the buyer will derive from the service.

As a result, the leadership should enhance large and visionary long term derivatives of the services that the consumers get from their organizations in the world. As a major consideration in the fast changing world, customer value acts as the main determinant factor for the ultimate economic status of a given region (United States Federal Transit Administration, 1999). All the countries that rely on services sales like tourism have in the last decade made major strides towards increasing the value of the services they release to the consumers.

Regions like Hawaii and major companies like JP Morgan & Chase have been making huge profits even in the midst of the current economic turmoil of the world courtesy of customer value. Recommendations. ? All the service industries should embark on strong research on the best methods of enhancing customer value in the services they provide to them. ? Visionary transformational leadership that emphasizes on total quality management should be implemented for the organizations to survive in the fast changing world.

High level Customer Relations Management should be instituted for successful customer value to be implemented in the services industry. ? Total quality management that ensures all the staff is fully involved through team work and innovations in the industries is required with highly motivated employees who form the basis for effective high customer value customer services delivery. ? Continuous comparison of the company’s customer services value with other organizations of similar kind and subsequent monitoring and evaluation for possible changes and evaluation should be instituted.

Reference list Bernard, S. & Wolfgang, S. (2005). Complaint Management: The Heart of CRM. Washington: Thompson South-Western publishers. Jay, K. , Connie, M. & Beverley, S. (2001). Service Quality Management in Hospitality, Tourism, and Leisure. New York: Haworth Press. Jonker, J. J. , Piersma, N. & Dirk, V. (2004). “Joint optimization of customer segmentation and marketing policy to maximize long term profitability”, Expert systems with application, (2)27, 159-168. Pfeifer, P. E. , Haskins, M. E. , & Conroy, R. M. (2005), “Customer Lifetime Value, Customer Profitability, and the Treatment of Acquisition Spending,” Journal of Managerial Issues, (1)17, 11-25. United States Federal Transit Administration. (1999).

A Handbook for Measuring Customer Satisfaction and Service Quality. Washington: Transportation Research Board. Blazey, M. (2008). Service industries: Enhancing customer satisfaction in th e 21st century. Journal of Managerial Issues,(6)25, 41-45.

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How Do You Solve the Discount Conundrum in B2B Sales?

Table of contents

Research has shown that nearly 11 months of a year-long contract to pay off the associated acquisition costs. In this light, can B2B companies really afford to offer discounts, even if they think that move might help them close more deals?

Related: 

In reality, discounts sacrifice long-term value for the sake of a perceived quick-fix. And some estimates have indicated that SaaS firms that sell at a discount by approximately 30 percent. To avoid leaving that revenue on the table, you should investigate why the practice of discounting is so ubiquitous, and how you can create value for your customer and yourself without resorting to slashing prices.

The B2B discount conundrum

In some respects, it’s easy to see how we got to a place where discounts in B2B sales seem the norm. Competition often reaches cutthroat-level intensity, and most organizations have already invested heavily in the customer acquisition process. If there’s a simple sticking point over price that you could alleviate with a quick discount, why not at least recoup some of these up-front costs and hope to gain the lost revenue back over time?

The issue is that using price as a sticking point is almost always a smoke screen on the part of the B2B buyer. By the time the deal is ready to close, the buyer has likely investigated your pricing structure — usually much earlier in the process — and knows what his or her company can and can’t afford. The buyer is also working on previously established conventions, and using your hope for , to try to impress his or her boss by bringing the project in under budget.

Focus on fit, not on discounts.

If you’re selling a product that can help solve the customer’s pain points and the customer can afford the deal at the stated price, then he or she is willing to buy your product without a discount. If either of the previous statements is untrue, then your two organizations aren’t a good fit for each other anyway.

The reason the prospect is even having this conversation with you in the first place is that he or she is looking for a solution to a specific problem, and has received authorization from the other key stakeholders to pay a certain amount to solve it.

If your product doesn’t actually fit this person’s needs, you may be able to gain incremental additional revenue by selling at a discount, but you’ll do more long-term harm to your company than good. And, if the prospect can’t afford your product at the full price without compromising his or her fiscal future, then you need to investigate offering more cost-effective options.

Related: 

Know what your target audience needs.

By combining thorough industry and company research with robust customer-buying data and your specific conversations with the prospect, you will know definitively what this customer is looking for by the time you begin to finalize pricing. This should give your sales team members confidence because they can that their offering is valuable to the client and worth the price that is being asked.

When the client sees that the sales rep is resoundingly confident about the value that the service can contribute, that client will understand that your company is willing to stand behind that service and willl have fewer qualms about paying full price.

Explain how your company is uniquely situated to provide that value.

No, this doesn’t mean you need to rattle off a comprehensive list of features in order to wow your prospect with specifications; that is a foolhardy strategy. In fact it should still always be about the customer: about listening to this person explain his or her specific situation, about recognizing what will facilitate the customer’s job performance.

Further, your strategy should be about proving to the customer that you understand his or her business well enough to know why your product is a good fit. You can put a price on that kind of value — the price you’re asking for in your contract.

Be prepared to show in detail why your solution works.

Of course, if a B2B buyer is going to be prepared to pay full price for a solution, he or she is going to want real results data to help justify, to the other stakeholders in the project, that buying decision. Understand that your customer is doing necessary due diligence just as you have done yours, and come prepared with numerous examples of proof that can be viewed through the prism of their own company.

Related:

This means relevant data from previous customers, , detailed demo products, etc. Once your client sees that you have hard data to reinforce your claims, he or she will feel much more comfortable taking back to the bosses the decision to strike a deal at asking price.

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Email Is Not A Tool, It’s A Platform

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The new age startups would have you believe that email is dead and would convince you to move on and adopt a multitude of tools in its place. The truth though is that email is not going anywhere and that is because email is not just a business communication tool – it is a platform, a platform where you can market your business, attend to customer support, manage your projects, make cold calls etc.

It is a platform that, with right enhancements, can help you run your entire business, especially for small businesses and startups. It is, in fact, an open, and multi-faceted platform on which innovative things are being built. Email is not dying but is transforming, tremendously. It has gotten much smarter and easier to use, without losing its interoperability or its ubiquity.

If you are wondering why the hell should I try and enhance email through add-ons and extensions when I can simply use tools that don’t depend on email, consider this – instead of using a separate tool for each operation such as customer service, task management, email marketing, etc., if you were to enhance your email and base your operations on this platform, it can serve as the common center for all your business operations. Instead of having to shift from one tool to another, all the information you need will be right there, in your inbox. Why do I call email a platform? I call it a platform because of its ability to let us conduct multiple operations right out of the inbox.

Project Management

Emails contain a lot of information essential to running a project. For example, a request from a client via email is a task you will assign to one of your team members. You will either do this by forwarding the email to the team member or by using a task management tool. On that note, there are some innovative tools out there, which can partially or completely integrate with email and work in tandem with the inbox. These enhancements allow you to design your project management workflows, delegate tasks to team members, monitor the status of these tasks and more.

We anyway conduct most of our project management operations from the inbox; complementing this process with the right set of tools can help you perform better. In fact, you can run a whole bunch of virtual teams quite effectively, if you equip yourself with the right set of tools.

Customer Support

We already conduct a number of customer support activities through email. Especially for small to mid-sized businesses, email is the go-to customer service platform. You can use an email response management solution to ease your job. You can also enhance your service by using simple features such as email templates (which maintain consistency across all reply emails) or use automation to follow-up on customers after you provide your customer service.  You can also make use of tools with features like Shared Mailbox which allow you to maintain a centralized inbox from where you can assign customer support emails to you team members.

Client Management

Email is the best way to manage your relationship with your clients/customers. Here’s why:

  • It’s ubiquitous – everyone uses email, you can be sure that all of your clients have an email ID.
  • It’s interoperable – doesn’t matter which email client your customer is using (Yahoo, Gmail, Outlook etc), you can still reach them.
  • Unlike other Instant messaging options like text messages or Whatsapp, email doesn’t butt into the personal space of the customer/client (which can be quite annoying!)

Sales Management

Sales management is another important aspect of your business and yet again, with the right set of tools and features, email can turn into a powerful sales management tool.

  • Features such as email templates can make the job easy for your sales team and can help you maintain a consistent tone in all your email replies.
  • Using email, you can maintain your relationship with old customers either through follow-ups or through email newsletters.
  • It is definitely easier and more appropriate to make cold sales outreach via email than any other means.
  • Personalization is an important aspect of sales emails and by equipping your inbox with tools like Rapportive, which provide additional information on a lead, you can personalize the content of the email.
  • Tools with features like shared contacts allow you to maintain a centralized list of contacts for the team.

Also, consider this – email is well-suited to the mobile age. Another remarkable aspect to consider is that email does mobile really well. Emails are generally lightweight and they can easily be downloaded in the mobile inboxes of the readers and they can respond to these emails (forward, reply, delete etc) with just a couple of clicks – very mobile user-friendly. Also, for email marketers, the newsletters, if optimized well, will load without any format disruption as email is generally mobile ambient and convenient.

Email is evolving rapidly and unbundling itself to meet the changing demands of the people and is absorbing more of the technology around it. More often than not, it’s the simple email management tricks like using labels, filters etc. that can help you boost your performance by many folds.

Additionally, don’t underestimate the power of using the right tech tools that integrate with your Gmail. They can help you get through the day faster, manage email quite efficiently, communicate better, and run your business effectively.

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Cisco Systems: Web-Enablement

When John Chambers assumed the CEO position, he outlined some very specific objectives for Cisco’s future success. His plans included creating a one-stop shop for business networks by creating a comprehensive product line, to make acquisitions an efficient business process, to create industry-wide software standards for networking, and to choose the right strategic partners. All of these efforts would change the way companies and industries operated by creating an infrastructure of networked voice, data and video. Chambers’ vision of truly global networked companies would lead to improved productivity and profitability.

The main focus, however, was on the end result, which was high customer satisfaction. In addition to planning for the business improvement and process continuity they would eventually enjoy, Cisco focused on improving internal communications and web access of information for their employees. With the enhancement of their intranet and communication capabilities, employees from all regions could pull real-time reports, monitor live corporate information, and join meetings more effectively. This increase in data at their fingertips led to increased employee satisfaction.

When employees are happy, it tends to influence their motivation to work hard and remain loyal to their jobs, ultimately resulting in increased corporate profitability and success. Enhancements to the external customers were also a huge success. Customers were now able to resolve technical issues via web-based support, and this led to happier customers, and more profitability by those who were more likely to remain loyal to Cisco. The case analysis to follow ventures into more depth with some of these web enhancements and business processes that made Cisco what it is today, one of the great providers of web-connected business applications.

After investing $15 million implementing an ERP system, Cisco spent the next two years investing $100 million in web-enablement initiatives. Why did they do that? How did standardized web protocols contribute to the success of these efforts? Cisco wanted to be the “Global Networked Company”. Their hope was to experience higher productivity and profitability without sacrificing stability during the company’s growth. They wanted to be ahead of the industry in terms of speed, delivery methods and customer service.

They did this by revolutionizing the existing processes and creating new end-to-end capabilities for Cisco customers, partners, suppliers and employees. Improvement in IT and the organizational structure benefited both the company’s overall business and the customer’s overall satisfaction. The web enhancement focused on several internet and intranet web applications.

  • Employee Self-Service – The Corporate Intranet (Cisco Employee Connection, CEC) provided centralized access to information, tools and resources needed to streamline processes, facilitated knowledge exchange and maximized employee productivity. Communication and Distance Learning – It enhanced the ability to communicate with employees and added an important dimension to training where distance learning was made available to its employees.
  • Customer Self-Service – Customers were allowed to pull reports and live data from the internet. It also allowed Cisco to focus on its customers where the Cisco website would be used to diagnose and answer customer issues worldwide.
  • Net Commerce – Cisco was able to ship their products online. Supply Chain Management – This allowed for the automation of tracking, new product introduction, testing, direct fulfillment and dynamic replenishment. Standardization of internet business solutions across functional areas allowed for Cisco to become a true global-networked IT company by increasing their competitive advantage and shareholder value. They decided to manufacture its product line through the process of standardization, which set industry wide software principles for networking. This was a smart move because it forced all other vendor products to integrate with Cisco’s product lines.

In addition, Cisco only chose partners that complimented their abilities to integrate their expertise and products with those of Cisco’s in-house product line in order to gain a market share for their own product lines. One of the main successes of standardization was the acquisition process. Most acquisitions were fully integrated within 60-100 days. Cisco acquired many small and medium size businesses that brought technology into its product line. It allowed them to gain R&D for a relatively low cost.

Standardization allowed Cisco to be systematic about the way things were done which helped to make it an easy, repeatable process that could be duplicated quickly. Select two of the five benefits resulting from the Cisco Supply Chain Initiative and explain how these contributed to the efficiency of the supply chain and increased profitability. Explain how the two benefits you chose contributed to supplier and/or customer satisfaction. Cisco acknowledged that there were initial barriers to the flow of information and the ease of supply operations between them and their business partners who produced products for Cisco’s consumers.

They initiated a Supply Chain Management Initiative to improve their operations by automating the supply chain and improving information flow between Cisco and its partners.

  1. Direct Fulfillment: One result of the initiative was creating direct fulfillment for product orders. Instead of having the orders shipped from the originating partner to Cisco, then on to the customer, Cisco opted to ‘take out the middle man’ by shipping orders from the provider directly to customers. This saved half the time in shipping, provided significant cost savings, and most importantly, provided better customer satisfaction. The reduction in operating costs due to direct fulfillment was $15M in FY 2000, a small portion of the overall reduction $760M that this initiative saved the company overall.
  2. Dynamic Replenishment: Dynamic replenishment was another result of the initiative. Cisco’s implementation of supply chain automation provided real time information on inventory levels and product demand. Instead of past issues with errors in supply information resulting in delayed product re-supply, Cisco’s system communicated market demand directly to the manufacturers, and they could in turn replenish inventory quickly and efficiently.

This also resulted in cost savings in that there was a reduction in inventory overages, and a more streamlined ability to replenish product in a timely manner. Wal-Mart implemented a similar dynamic replenishment system, resulting in their being the leader in supply chain management to this day. Focusing on the two intranet initiatives, Employee Self-Service and Communication and Distance Learning, discuss how these initiatives might improve employee productivity, contribute to building a sense of community at Cisco, and aid in employee retention.Employee productivity significantly improved when Cisco focused on the Employee Self-Service initiative. This initiative focused on providing centralized access to information, tools, and resources. By having immediate access to these sources, processes were streamlined, knowledge sharing improved, and employee productivity was maximized across 40,000 employees. Communication and Distance Learning improved employee productivity by upgrading training modules and making them available on employee desktops.

Personalized homepages were offered to employees providing up-to-the-minute news reports and access to quarterly company broadcasts either in a live or delayed broadcast. This allowed for twice as many employees to view Cisco’s quarterly addresses.The employee self-service initiative helped contribute to a sense of community by the facilitation of knowledge sharing among teams, departments and Cisco overall. Communication and Distance Learning helped contribute to a sense of community by improving employee communication through the desktop distance learning modules and offering personalized home pages for all employees.

Easy access to attend quarterly meetings in real time or during a recorded broadcast allowed for twice as many employees to attend quarterly meetings and improved the relationship between Cisco and its employees.The employee self-service initiative aided in employee retention by continuing to upgrade employee used tools improving efficiency and productivity and ultimately allowing for optimized performance across all employees.

Communication and Distance Learning aided in employee retention by making communication across all employees easy and effective and by regularly empowering employees with information and updates about Cisco. Employees had access to worldwide breaking news at their fingertips. CEO John Chambers believed that “by providing the end-to-end network plumbing, we can change the way entire companies and industries operate. ” How did Cisco’s IT web-enablement initiatives reinforce and demonstrate that belief?

Soon after John Chamber became CEO in 1995, he started working on his vision of “New World Network”, “Internet Experts: the Global Internet Company” with the following four-point plan to provide the end-to-end internet based infrastructure in which voice, data, and video would be delivered through one network.  Assemble a broad product line so Cisco can server as one-stop shopping. Systematize acquisitions as an efficient business process. Set industry wide software standards for Networking. Pick the right strategic partners.

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