Why the material supplier and SEA winner’s average customer relationship tops 15 years.

At the 2007 Circuits Assembly Service Excellence Awards, EFD Inc. (efd-inc.com) took home an honor for customer service as a materials supplier. Marketing manager Liz Mitchell explained how the company ensures customer satisfaction.

LM: As part of our ISO 9001:2000 certification, EFD maintains internal customer service quality metrics. We send out a yearly survey to our customers and ask them to rate our overall service quality, which is captured in the following subsets of business metrics: on-time delivery and tracking preventable external failures such as order entry, product quality, shipping, R&D, manufacturing or heat damage during transit. Our customer satisfaction process is the foundation of everything we do; all actions we take are to support improved service, performance, reliability, new product development and convenience for our customers.

The metrics are as follows:

Customer satisfaction survey. An annual customer satisfaction survey of a minimum of 65% of our customer base is based on performance, support and reliability. We also use the survey to ensure that new initiatives are making a difference and valued by our customer base. Ratings are compared year-over-year, and actions are identified to address any negative trends.

Discrepancy reports. We track all customer inquiries that cannot be resolved immediately, whether they are related to improving their process, our product or service. We compare to all the root causes and develop continuous improvement programs to address the issues.

Days to close out discrepancy reports. We track the time it takes to close out any and all issues with customers. This may be one of the most important metrics we track. When a customer has an issue or perceives to have an issue, it is our No. 1 priority to first ensure their production is not affected, and second, to treat each inquiry with a level of concern and urgency equal to the customer.

Returns as a percent of total shipments vs. a percent of total sales. We do this so all customer returns are equally significant. Whether a customer returns one unit or 100, they are just as significant.

Delivery performance to requested date as a percent of total shipments.

Days to ship. EFD has a standard shipment time of three days, or sooner if possible. The actual days to ship OSIP orders are tracked to ensure that, if a customer wants the product as soon as possible, we meet their expectation. Same-day deliveries are also tracked for urgent requests.

Prospect lead follow-up. We consider each person who has contacted EFD a customer; they should receive the same immediate response as our current customers, so we measure the time to enter and process all new inquiries.

Part of EFD’s “Dashboard” is a relationship index for each customer making up 60% of our business. This matrix measures multiple indicators ranging from the type of industry, number of conversations, site visits, types of products used and number of different products used. Each one of the metrics is weighted based on our customer’s expectations, and then a rating is calculated for how satisfied each customer is. Actions are taken to improve areas below expectation. Customer satisfaction is the common thread, so it happens naturally, but with everything that is important, we track and review our performance to the metrics every quarter during an ISO management review.

Establishing standards is done by continually probing our customers through onsite visits, customer satisfaction surveys, Circuits Assembly’s SEAs, and customer special request and discrepancy report tracking to ensure that our standards are adjusted to meet the continued change in expectations.

Service Excellence Award data are reviewed and compared with performance from past years for areas of improvement and areas that may have slipped. The feedback is a good gauge in correlating this core sample of respondents to the larger group of respondents’ feedback we receive through our annual (overall) customer satisfaction survey. It is important to note that we try to use different customers every year to ensure we are not cherry-picking our responses. This gives us more confidence in our true customer satisfaction and a better appreciation of receiving the award.

At EFD, customer service is part of the culture. Whether internal or external, total support of our customers is prevalent in our daily business dealings. In my opinion, without the satisfaction focus in our business, we would have no business. Most of the accounts that stop valuing the support and service we provide are not customers for long. Important to note that many come back to us after realizing what they have given up. It is difficult and costly to let a customer go just because of a pricing conflict, but the ones who come back are ours for a very long time. On average, relationships with our customers are greater than 15 years. Once we earn a customer’s business, we attempt to keep their business as long as they are in business.

As we know, it costs less to retain a customer than it does to gain a new one, but we want to make sure we are providing every customer with what they want and need. If we can no longer provide what the customer wants (most of the time that is a lower price), we are the first to suggest that if price, not cost, is the most important thing, a change is in the best interest for maintaining a good relationship. Because this happens as a normal course of doing business, gaining new customers is a key focal point for EFD as well. Our job is to find those accounts that value what we have to deliver. This is how we grow our business every year.