Jump Starting Internal Customer Relationships (Part 2 of 2)

Questions This Guidance Answers: 
  • How do I get to know new customers?
  • What should I ask new customers?
  • What should new managers be doing?

In this cast, we finish up our conversation on jump starting relationships with your internal customers. Last week, we discussed the first of the 5 steps (Identifying Who, Prepping your 5 minutes snapshot, and Sending out the first email), today we'll discuss the actual customer meeting AND, Mark's favorite (because it's the ACTION step) , reporting back to your team.


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I have a two fold question about the

I have a two fold question about the definition of an internal customer. I am the operations manager at a large collision repair facility in Southern California. All of our work is insurace refered, and as such, managing our insurance relationships is of the UTMOST importance.

First, are the insurance companies whom I have relationships with considered internal customers?

Second, how does on best deal with a customer who is 100% price oriented and cares for nothing more than consistently lower prices and uses every opportunity to demand lower prices. Does this model still fit?

Brad

Two things: One, this was the perfect

Two things: One, this was the perfect podcast. It began as I pulled out of my driveway and ended as I parked my car in the lot at work. Can you keep them all exactly that length? ;-)

Okay, seriously, I feel this process is soemthing that should probably be done more than once, probably annually. Of course, after the first time the emphasis would change from an introduction to an ongoing collaboration. But I see it more as a performance review for your team, and just like performance reviews for individuals, it should be done formally and once a year.

Thoughts?

Brad, I would see your situation as

Brad,

I would see your situation as being different. To me, the insurers you deal with are external customers from whom you subcontract work for the benefit of their customers, namely the people with the cars in need of repair.

I think the distinction is between being a revenue center (an internal customer) and a revenue source (an external customer from whom money flows to you). Both need to be actively managed and while there are differences, many of the same techniques for maintaining that relationship may apply.

As for managing the customer for whom price is the only measure, you have to make a decision as to whether or not it is worth keeping that customer. Remember, while every business should be customer oriented, the cold hard reality of life says that not all customers are worth having, and one that only cares about his/her price and not the total business relationship may not be worth having.

At some point the price may get driven down to where it is no longer economically viable to keep that customer. Maintain the relationship as best you can up to that point, but no further. One of the truths of your industry is that people are always going to be smashing up their cars, and you may be able to find another insurer or insurers that may bring you less volume but do so on a higher margin.

Steven Covey maintains that there is always a win-win scenario in any negotiation and I think he is generally right. The problem is that not everyone cares about reaching a mutually beneficial arrangement. When the other person/organization cares only about their cost and not an equitable relationship with you then you may have to simply walk away from the relationship for the benefit of your organization. Covey calls this "win/win or no deal" and it is a sad reality of life. If you quote them a fair price that insures good value for them and a fair profit for you and that offer is rejected, it may be time to walk away from that deal and perhaps even the customer.

Brad- Insurance companies are

Brad-

Insurance companies are external customers. Usually a good rule of thumb is that money changes hands.

There are many ways to address price sensitivity - too many for a good answer here. But my recommendation for your behavior is to treat all customers well, and to do your best to develop relationships, though this technique was not intended for external customers.

Mark

Paul- I agree with your peridically

Paul-

I agree with your peridically revisiting this technique.

Mark

Mike and Mark, First of all let me

Mike and Mark,

First of all let me congratulate you both for this amazing project. No doubt you're leaving a mark on a lot of people. (pardon the pun)

Now for my question:

How/when should I involve my team in this subject? Should I "surprise" them with the presentation of the results? Should they know before hand what will I be doing? And if so, should they participate?

I'm from Lisbon, Portugal and I'm responsible for the demand planning group for a joint venture of P&G in Portugal and Spain (for a wide range of products - eg diapers, pads, wet wipes)
All my managers are in Barcelona and so is my boss. I travel at least every two weeks and have regular videos/phonecalls with them (and yes, I'm also implementing one-on-ones). This creates a tremendous challenge on communication and team building and I have to take special care not to stumble.
My fear in this case is that a surprise will be perceived negatively as a sign of lack of communication and/or trust.

Cheers,
Pedro

Pedro- Announce you're going to

Pedro-

Announce you're going to conduct the meetings, share the PowerPoint in advance. Don't surprise them... what would be the point?

The more you share, the more ideas they will share. You probably can't use too many in the initial meeting, but you can start the relationship and use more and more of their ideas with internal customers.

Mark