Category Archives: Service

How Do You Justify Differential Pricing for the Same Services? Three Approaches

Situation:  The CEO of a company struggles with differential pricing. They want to be fair to clients but realize that a one-price policy limits growth. What tiered pricing models work, and how are they rationalized? How do you justify differential pricing for the same service?

Advice from the CEOs:

  • Differential pricing by client demand. For high value services, you must have a compelling value proposition. Research comparative premium pricing for similar value propositions and set prices accordingly. For price sensitive clients offer two alternatives: senior staff services at one price or associate services under supervision for a lower price. Let the client choose between price and quality?
  • Differential pricing by market risk. Early stage clients want high service levels but may not be able to pay bills. This justifies a premium price, as you are not assured of collecting for services. The differential is a risk premium that covers non-payment risk. Well-established clients are less risky and support lower pricing due to a lower risk of non-payment and are assigned a lower risk premium.
  • Differential pricing for bundled vs. non- bundled services. If a client purchases individual services, then there is a set cost for each service. However, if a client wants to purchase a bundle of services, then it is reasonable to discount the bundle. You are not necessarily charging less for the bundle because you have now received additional business at a lower acquisition cost. Your “discount” reflects the savings that you have enjoyed in reduced marketing and sales cost.

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How Do You Outsource IT? Seven Suggestions

Situation: Fast growing companies often find it difficult to scale internal IT management to keep pace with database (dB) growth. There are typically 1-3 people in charge of dB management in a small to medium-sized business. Crisis hits when there is an abrupt system shutdown for up to 48 hours and a significant disruption to company operations. How can this be avoided? How do you outsource IT?

Advice from the CEOs:

  • The difficulty is that small infrastructure teams often don’t have the range of skills to diagnose dB issues. Calling Oracle, SAP, etc. for assistance gets expensive fast.
  • One option is to outsource business intelligence and dB management to a specialist. Quality offshore resources exist that can take over support of company business information (BI) and dB management, offering a full suite of services from anti-virus to preventative diagnosis of subtle misalignments.
  • For example, InstaDB replicates the dB in a remote data center so that they can monitor the system for errors, develop solutions, and remotely resolves errors with no interruption to users.
  • In addition, some outsourced specialists include calls to Oracle, SAP and so forth as necessary to resolve problems at no cost to the client.
  • In a pilot study in a company with 5 servers, the offshore outsource partner provided a full suite of services and was able to increase uptime from 95-97% on a daily basis to 99.97%. This level of performance should be the goal.
  • Your outsource provider should have 24/7/365 support services.
  • Your provider should provide you with a service-level agreement (SLA) prioritizing issues so that the most critical issues are resolved fastest.

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How Do You Differentiate Your Offering? Five Critical Steps

Situation:  A company has had success with a few large clients but wants to expand their customer base for long-term growth. The challenge is that their offering competes in what is commonly regarded as a commodity market. How do they avoid being perceived as a commodity? How do you differentiate your offering?

Advice of the CEOs:

  • One company created differentiation by getting to know everyone in the business. They built long-term relationships, based on reputation and trust. They took the time to understand the needs of customers that they wanted to develop. As opportunities arose, they built relationships and asked questions to clearly define and align with client needs. While this takes time and patience, the objective is to be able to say “We know your business” – with credibility. Here are the steps that they took:
  • Study the businesses, sector, and customers that you wish to serve.
  • Leverage your success with large customers. Talk about how you helped subunits within these large customers. This makes a big customer seem more like a collection of small customers similar to your prospects and makes your experience relevant.
  • Let prospective customers know that you are hungry and will go the extra mile for their business.
  • Learn who currently serves your prospective clientele. Study these competitors, their strengths and weaknesses. Talk to their customers – learn what they love about competitors’ service, and what they would like to see changed. Find the holes in what others provide and fill these holes with a better offer.
  • Look for and encourage repeat business and references to new business.

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How Do You Facilitate a Move to a New Space? Five Recommendations

Situation: A company has taken advantage of favorable lease rates to secure a larger space. How can they minimize work flow disruption during the move? How do you facilitate a move to a new space?

Advice from the CEOs:

  • Plan the move in detail: electrical, intranet and telephone needs; office space and facilities; design or production space and facilities. If you can’t move everything over a short period of time – like a 3-day weekend – consider moving in steps, a series of discrete moves over time, each with its own requirements and timetable.
  • If you carry inventory, pre-build inventory to see you through critical steps of the move. If you have a major customer with strict delivery deadlines, try to negotiate a delivery window during which you can conduct the move. Determine if there is seasonality to order delivery that makes a particular time of year more convenient to move critical operations. Custom work will require special planning.
  • If you plan to upgrade equipment, consider purchasing, installing and operating the new equipment in the new location instead of your existing location.
  • If you will be leasing the new facilities and possibly be even if you are purchasing the facility, ask the new lessor or seller to provide cash to: (1) finance delayed shipments at a price discount and (2) cover expenses of the move and outfitting the new location to your needs.
  • Consider converting to a wireless intranet and telephone system to avoid the expense of wiring the new facility. Look at plug and go options.

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What are Effective Metrics for a Service Company? Seven Suggestions

Situation: The CEO of a service company finds it challenging to measure project profitability and client satisfaction. What measures and metrics have other service companies found to be most useful? What are effective metrics for a service company?
Advice from the CEOs:
• For billable services one CEO measures utilization percent defined as (hours available for service delivery)÷(billable hours). Include in the denominator both billable hours and customer good-will or preventative maintenance hours. The latter, while not producing current income, are an investment in future income. Set up audits for service needs, especially future needs, when working with customers. This will help you to stay abreast of changes in the service environment and to plan accordingly.
• For fixed budget projects – another CEO measures budgeted vs. actual expenditures by project.
• For fixed-fee services a third CEO calculates a fraction expressed as: (income per customer company) ÷ (cost in hours for that customer).
• In a discussion on customer audits and surveys, options offered included: (1) An exit “pizza party” with the client. The challenge is that this may produce tainted results. While this builds customer good-will and may provide qualitative feedback, it should be supplemented by more objective measures. (2) A mailed survey – from a 3rd party with a prize for responding. (3) Email follow-up from a 3rd party that directs the customer to the 3rd party site to complete the survey.
• A final suggestion was ambassadorial CEO visits to the top contact person in key accounts. This provides an opportunity to learn about the customer’s present and future needs, staffing plans, business and strategic direction. Helps to anticipate changes in the competitive landscape. The more a business relies on recurring revenue, the more important these visits are.

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How Do You Maximize Customer Satisfaction? Six Suggestions

Situation: The CEO of a company wants to assure that his company is doing everything that it can to maximize customer satisfaction. What have others done to evaluate and measure whether their customers are satisfied with the service and/or products provided? How do you maximize customer satisfaction?
Advice from the CEOs:
• Ask customers what they like and don’t like about your services.
• Ask what other things they are struggling with and whether or not you can offer services to improve this situation.
• By asking these questions, other opportunities may arise. Act like a business partner not hired help.
• Set targets for the company and sales team. What do you want to measure? How will you know if the client will reuse your services? What are you looking for?
• In the case of a new installation or activating a new service, as CEO be there when the implementation is complete and ready for “live” time. You may see complementary products or services to suggest to build a partnership with the client.
• Look closely at what added value you are offering so clients want to keep you on retainer. Identify what retainer business looks like and look for options to offer retainer services. This will help to differentiate the offering.

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How Are You Preparing for Next Year? Two Approaches

Situation: A CEO and his team are preparing for next year. There is a lot of uncertainty as to how the year will unfold and what the economic and financial environment will look like. What are others doing to plan for next year and beyond? How are you preparing for next year?

Advice from the CEOs:

One company built a 5 year plan to 2028 about a year ago.

    • They are now reviewing the plan. Their core has been growing faster than anticipated as a result of the new sales effort. For next year and beyond they are revisiting the plan and revising it both to take advantage of the new sales effort and to leverage this success into other areas.
    • Within the plan, priorities for growth have been identified, and the company is on target to double the size of the company in 5 years.

Another company established a Strategic Priority Team a few months ago.

    • They started by setting goals for 2025 to 2030. They followed this with a plan for what they need to do year by year until 2030 to realize this plan. They recognize that there may be speed bumps along the way but have established the internal discipline and capacity to address these.
    • Within the plan, they are looking at expanding ther facilities in 2nd half of 2026, and plan to double both their space and staff over the planning period.
    • An additional area where they will focus is their current and new business development effort.

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Customer Service and Customer Satisfaction: What’s the Difference? Two Points

Situation: A CEO and his team have been having a debate about the difference between customer service and customer satisfaction. How do others work with their teams to improve both customer service and customer satisfaction? Is there a difference between the two and, if so, what is it?

Advice from the CEOs:

  • Customer service has to be clearly defined.
    • The objective of customer service is for the customer to have a positive experience.
    • Customer service is addressing the needs and concerns of your customers in a timely fashion to create a competitive advantage and higher perceived value for a company’s products or services.
    • Customer service is a process that can be taught and trained.
  • Customer satisfaction has to be measurable.
    • Customer satisfaction is listening to what the customer has to say, addressing their issues, and providing a resolution that meets their needs and expectations.
    • It is a measure of comfort, confidence and trust.
    • There is a difference between being proactive and being reactive – work with each to assure that the customer is pleased with their experience, product and/or service.
    • To test this, record and analyze responses to the question “How did we serve you?”

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How Do You Find and Train Staff for Satellite Offices? Five Points

Situation: A company plans to grow from a single site to additional distant sites. The CEO has two concerns: how to bring in the new people, and how to preserve the culture that they have developed as they build new sites. How do you find and train staff for satellite offices?

Advice from the CEOs:

  • First, how does the company currently identify customer targets?
    • Typically the company targets specific personnel within a potential client who will be decision makers or influencers on the company’s projects. Market developers then build relationships with these individuals.
  • Points of focus in selecting employees in other geographic areas.
    • What will be the office configuration? Likely 3-4 individuals, including an engineer, office manager and project manager.
    • Promote the company as the preferred place to work in the new locations. Offer signing bonuses for employees who identify and bring in new people, as well as for the new employees.
  • Does the company anticipate that maintaining company culture will be a challenge as the company expands? Yes.
    • Train new employees in the home office for one month to help them understand the culture. Immerse them in a project so that they experience the work ethic.
    • Have current personnel serve short term stints in the new offices. This will help to build consistency of service and delivery between the offices.
  • What is the best way to recover from a service challenge?
    • Occasionally we all make mistakes. Don’t miss the opportunity that “service recovery” presents to strengthen relationships with clients.
    • A competent and timely response to a problem situation can create an indelible impression on the client.
  • What else can the company do to improve its marketing?
    • Assure that there is an existing cost calculator in each remote site. This speeds response without having to wait for decisions from the main office.
    • Install a traffic plug-in on the webpage for each remote site and feature this on the site webpage. This allows current and potential customers to schedule their visits to their convenience.

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How Do You Improve Your Company’s Website and Internet Presence? Seven Suggestions

Situation: A company has not updated their website for some time. As it considers making changes, how can the company optimize their web site for marketing purposes? What have others found to be most effective? How do you improve your company’s website and Internet presence?

Advice from the CEOs:

  • Look at how the company is currently using their website and Internet to reach clients.
    • The company currently has email addresses for 80% of their clients.
    • They have been sending an annual survey clients through either mail or email and get a 40% response rate. The best response comes from email. Assure that the survey can be completed in 5 minutes or less unless the respondent wishes to provide more detail as an option.
    • The company has a web page that comes up prominently on Google.
    • They mail or email a quarterly commentary on company performance and initiatives to clients.
  • What are the advantages of print media and mailings versus email blasts.?
    • Does the company have the capacity to automate both envelope addresses and letters for clients without email addresses? If mailings are created manually it makes sense to invest in software to create automated mailings.
    • For more personalization, use stamps instead of meters.
    • Both factors make mailings expensive to prepare versus email communications.
  • The home page of the company website should focus on:
    • Who you are.
    • What you do.
    • Who you serve.
    • Why you do it better than others – what significantly differentiates the company?
  • Invite and include clients in volunteer work to deepen relationships.
    • The company is dedicated to volunteer work.
    • Extend volunteer work opportunities beyond employees to clients who are interested in the particular project.
    • Publicize this on the company website, and send personalized thank you letters – “We built it together as a family.”
  • Create forums on the site for individuals with interest in particular topics related to the company’s offerings and activities.
    • The value of honest discussion is better than no discussion at all.
    • This also keeps the company abreast of changing attitudes and priorities of clients.
  • Create resource lists on the company web site of firms or individuals offering services which complement the company’s offerings.

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