Home > Updates > Service as the solution – how this is key to business resilience
The New Zealand economy has come through a period of continuous strong demand, where many businesses haven’t had to go in search of new customers; new business has come knocking on the door. Revenue growth has been a key factor of success in many businesses. Economists and commentators are now warning us to be prepared for a recession, while the government and Reserve Bank are aiming to suppress demand. In a boom economy when revenue is growing, businesses can lose focus and experience a decreasing gross margin percentage and a creep in overhead costs, often masked by a healthy net profit. When revenue growth melts away, net profit suffers immediately.
Minimising the impact of declining revenue or revenue growth
If your business is facing a reduction in revenue or revenue growth, how can you minimise the impact of that on your business? You could try attracting new business or selling more to your existing customers, but that can be a tough ask in this economic environment. You could slash some overheads, however in an inflationary environment un-avoidable cost increases from suppliers are inevitable and the infrastructure of your business will need to maintained at a sustainable level.
So, if improving gross margin percentage is the key performance indicator for maintaining or improving the profitability of your business, how do you achieve that? Three critical elements I have observed in successful businesses are:
In the examples and tips below, I focus on the perennial importance of excellent customer service.
An accountant walks into a plumbing supplies shop…
For skim readers, the “punchline” to this anecdote is: the accountant walks out of the shop thinking “I must remind clients to focus on their customer service to help set their business apart.”
A recent experience reminded me of the critical importance of customer service. I visited my local plumbing supplier for a bathroom fixture. I walked into the trade desk area dressed in a suit, and as an accountant surrounded by tradies, immediately felt like a fish out of water. I was promptly approached by one of the counter staff who greeted me with a big smile and a “Good morning, sir, how can I help you?” A photo on my phone and a description soon had the item identified and the staff member politely asked me to wait while retrieving the item from the storeroom. In under a minute, she was back at the counter asking me “how would you like to pay for that today?” Transaction complete and in a customer experience of less than four minutes, I made my way out of the store as I was warmly wished to have a great day with another big smile.
As I walked back to the car I thought “wow”, that was a very pleasant experience.
I questioned myself why that was a noticeably different interaction when it was so simple and a common one…until recent years. This level of prompt, efficient and friendly service appears to be increasingly rare as more businesses are actively using technology and removing the human component of customer transactions.
We can see an example of this in our daily lives when visiting the supermarket. Some say that after living through a pandemic consumers have an increased desire to re-engage and experience human interaction that was previously denied. Whatever the underlying reason is; businesses that prioritise delivering excellent customer service will be better placed than those that do not. None of us enjoy going into a store where the sales assistant doesn’t show any interest in us or carries on with a telephone conversation while serving! Read on for how you can stand out head and shoulders above your competition based on the service your business provides.
Your attention to service is your key to differentiation
Following on from my real life example above, unless your business is selling a product or service that is either unique or is so commoditised that customers are not looking for human engagement, then your level of service is your most important opportunity to differentiate your business from your competitors.
Who should deliver excellent customer service?
What does excellent customer service look like in your business?
Why should your business prioritise excellent customer service?
When should your business deliver excellent customer service?
How will your business deliver excellent customer service?
By giving your customers a pleasant and memorable experience at every opportunity, not only will they love you for it, but your business will also stand out and be better placed to face any headwinds coming your way.
Learn how Nexia New Zealand can help set you and your organisation up for success. Contact your local Nexia Advisor to get started.
We have offices in Christchurch and Auckland (Albany and Newmarket), however we can help you wherever you are located. Nexia International is a leading, global network of independent accounting and consulting firms, providing a comprehensive portfolio of audit, accountancy, tax and advisory services.