Webservations - the Canvas Dreams blog

Location: Webservations » Selected Entry

The Importance of Sustainable Business In Today's Economy

Posted by Canvas Dreams Staff on 04/14/2009

Whenever the phrase "sustainability" is used, more often than not it is said in the context of environmental awareness. Less attention is given to the ways sustainability can be applied exclusively within a business setting, or the different ways it can surface in a company's day-to-day activities.

In the past I have written about the importance of customer service with regards to sustainability.  I'd like to refine this notion by breaking the general concept of "customer service" into two components: KYC (Know Your Customer), the manner in which a company constructs the relationship with the customer; and QOS (Quality Of Service), the manner in which a company provides its services and products to the customer and how the delivery supports or hinders the relationship.

Given the troubled economy, personal experiences dealing with poor service, and recent national security news in the Web hosting industry, it seemed a perfect time to explore what is going on right now, how companies can learn from others' mistakes, and embrace sustainability in a way to support their customers, grow their business, and protect their company's image all at the same time.

KYC = Know Your Customers

The first place I saw the phrase "know your customer" was at a bank in 2002. They had just posted a policy following then-recently-passed anti-terror legislation. The bank wanted to get to know who you were so they could provide you better service. The policies didn't necessarily mean the bank wanted to restrict your business. It was more like a vetting process: As the bank became more familiar with you, financial transactions would take less time because the bank began to recognize patterns in your legitimate day-to-day activities. One banker told me it simply meant establishing a relationship with a customer to build a thing called "trust".

Within the scope of the Internet, I often hear about a poorly-used term, "Web 2.0". Instead of simply browsing information, Web sites built around Web 2.0 concepts enable you to provide feedback, interact with the site, add your own opinions, and overall create a two-way conversation out of your Internet usage. You can think of Web 2.0 as a form of KYC because it removes anonymity from the picture and makes the entire experience personal.

KYC is a simple philosophy that any business should uphold. You cannot serve your customers' needs if you don't know who they are. Despite the increased adoption of KYC, many companies -- particularly large corporations -- seem to have little interest or ability to know anything beyond the dollar value of their customers. They may perform an aggregate analysis to determine their customers' demographics, general interests, purchasing habits and all that; but if you were to ask what a particular customer did for a hobby, what the weather is like in the customer's city, or if the customer's child enjoyed their birthday party, the company would look back at you with a blank stare.

Now enter the aspect of the current economic climate, and it becomes even more apparent why a company should know its customers. In this "buyer's market", purchasers are extremely choosy about where they spend their money. The can afford to be picky because of the sheer fact many companies are hurting for business and can -- and should -- work harder to earn the trust and business of new customers. Any company not prepared to put out this effort will likely be passed over in lieu of a competitor that understands what is at stake.

QOS = Quality of Service

From the other side of the company's dealings with a customer comes QOS. The value of the company's service or product, how it is delivered to the customer, and how it is supported should the customer have a problem.

One of the negatives experiences I have had as a consumer in this economy stems from large companies trying to reduce costs by scaling back or outsourcing customer service. Service that used to be excellent is now par; service that was mediocre at the start has now become quite poor. The quality of customer service departments has become abhorrent. It is a disappointing turn of events all capped off with impersonalized customer service from support staff who do not care about your needs and simply filling a chair to get a paycheck.

What is most astounding is the way some companies choose to deal with business customers, and I can draw on personal experience to illustrate this. Last week, one of our vendors -- a Denver telephony company that supplies SIP trunks for our VoIP service line -- demonstrated that they apparently outsource their support to an Indian firm, do not want to know anything about their customers, and apparently have little concern about the quality of their service, either. What they also don't know is that they are one of three vendors we work with for this particular type of service, and after our experience, we will not be conducting any further business with them.

After debugging quality issues with some of the DIDs (direct inward dialed phone numbers) for one of our customers, we determined the cause of the issue was not with our phone servers, but instead the issue was with the vendor supplying service for that number. After a dozen exchanges with the support department, and us carefully spelling out the lengths to which we had localized the issue as being on their end, our vendor's support department tried to close the trouble ticket twice with these two damning statements:

"We suggest that you contact your equipment vendor for further assistance. Sorry for any inconvenience."

"Unfortunately there is nothing further we can do for you on our side. Again we're sorry for any inconvenience."

Despite us proving the issue was on their end, their service staff didn't care and just wanted us to go away. The dismissive tone of their support department did far more than show the vendor doesn't care about providing service; it also demonstrated that this vendor is not going to last very long in this environment, beginning with their loss of our business. It took less than five minutes for a consensus of Canvas Dreams management to fire the vendor.

KYC + QOS = Sustainable Business

After our experience with the fired vendor, we immediately rang up one of our other SIP suppliers, also located in Denver. They were delighted to work with us and begin the process of transferring our customers' phone numbers away from the former vendor. We set up a temporary phone number through the new vendor for our customer, and the vendor's customer service department -- based in Denver, not India -- was happy to speak with us over the phone and help us through a minor configuration issue.

After having a wonderful chat with their service department, I thanked them. We chatted a bit about the weather, and they wished us a "great weekend". Service with a smile. This was the first time I had spoken directly with anyone in their department, but hopefully it will not be the last. Yes, you read that correctly -- I actually look forward to the next time we need to ring them up and ask for help.

This is what happens when you combine KYC and QOS. The service is good to begin with, it is backed up with personalized customer support, and you, the customer, are amazed. As a result of our experience, this is a vendor that we'll continue working with, and while we have other providers to choose from, their few minutes of effort and care showed that this supplier wants to know us, they take pride in their work, and they want to build a healthy business relationship. They took care of us, so we are going to reciprocate the relationship by providing them more business in the future.

When a company achieves this level of harmonious balance, it is a perfect example of sustainable business.

Sustainable Business = Business Protection

Beyond fostering a healthy customer relationship, knowing your customers and maintaining healthy communication can also help protect your business. For example, you can pro actively determine whether a potential or existing customer is abiding by your terms of service, or abusing your service for their own gain in such a way that could be detrimental to your company's image or worse, its operation.

I can draw on a startling article in the Washington Post straight out of our industry -- Web hosting -- to illustrate this point. This past week, it was discovered that a pro-Taliban Web site in operation for more than a year was being hosted at ThePlanet, a large Web host in Houston, Texas. ThePlanet said it had no knowledge that the group running the site had Taliban connections. And yet, there it was, an extremist, militant Web site touting U.S. and Allied deaths on a Web server managed by an American company and on American soil.

The full article can be read here (limited to subscribers):

Extremist Web Sites Are Using U.S. Hosts

The New York Daily News has a boiled-down version of the story here:

Taliban, al-Qaeda other extremist and terrorist groups host their Web sites within the U.S.

One can only imagine the ramifications of this situation. As a customer of ThePlanet, the (pro-Taliban) group agreed to ThePlanet's Acceptable Usage Policy (AUP), which clearly states "Soliciting the performance of any illegal activity, even if the activity is not performed." is strictly prohibited on the part of the customer. Yet, for more than a year they had broken these and other terms of service and still went unnoticed.

The only reason ThePlanet learned of the group is that a third-party blogger alerted them to the fact they were hosting the site. It stands to reason that had they done background checks, passed the customer's information through any number of anti-fraud services, but more importantly simply gotten to know who it was that was renting server space for $70 per month, ThePlanet could have declined doing business with the Taliban group in the first place.

Certainly, impersonalized service comes at a price to the supplier. Shady groups can fly under the radar when purchasing service from a large company that doesn't employ KYC. Just as domain registrars like Network Solutions and GoDaddy refer to you by your "User ID", a number-based account, large Web hosts like ThePlanet simply have too many customers for them to be able to keep tabs on, let alone establish any sort of relationship or active communication channel with those customers.

It is an extreme example for sure, but it illustrates the point that when a company fails to understand its customer base on a personal level, it cannot count on its customers to respect the company's policies. Anonymity goes both ways, and either party is capable of abusing the other.

Sustainable Business at Canvas Dreams

At Canvas Dreams, we employ KYC and QOS from the very first communication with a prospective customer. We don't simply try to know what the customer wants, we also want to know the story behind the customer. This way, not only can we better understand their business requirements, but we also gain a window into their personality and business. We continue the process throughout the sales process. Should they sign up, we continue it by speaking with the customer on a first-name basis and developing a friendly relationship of open communication.

It takes little effort to employ a smidgen of humanity in the business process. We make a point of following up with customer support requests and do in fact return phone calls. Very few Web hosts do this, but it's just one way we can bridge the communication gap in a very personal, first-person way. It is a way of assuring our customer that they have our attention and we are just one phone call away. As we develop and foster the relationship, we begin to construct a profile of the customer, take notes on things of interest to them, and overall simply try to relate on a human level.

The method is not only disarming for times when we receive an upset communication from a customer who needs our help, but it is also a fool-proof method of understanding what they are really doing with their business. We do not employ this method to try and determine if a lead is bogus or a potential threat, but a benefit of this method is that we do gain a lot of knowledge into the customer's mindset and which addresses those concerns at the same time.

Overall, it is through a simple commitment to ensure that our customers' needs are met at every step that we are able to put sustainability into action and create a comprehensive, quality Web hosting service for our customers and establish respectful relationships that will last.

Conclusion

"Knowing your customer" is a process that is gaining ground throughout service-based industries. With little effort, a company can employ a few simple ways to open two-way communication with a customer throughout the lifetime of the relationship. When blended with caring customer service, the quality of support can advance exponentially and set that company apart from its competition.

Getting to know a customer brings many benefits for vendor and customer alike. Customers come to know the level of service they can count on and truly trust the vendor. The vendor can learn to identify how best to serve the customer and also facilitate the support process should that customer need help. The vendor can also use this method to protect the wellbeing of the company and the existing customer base from potential risks. Ultimately, both vendor and customer can work towards a sustainable relationship of trust and honesty that will serve their respective needs for a very long time to come.

In today's world, it is up to businesses to distinguish themselves in their respective industry. It is those companies that put out the effort and integrate KYC with a commitment to QOS, and together work those into the larger model of sustainability with their day-to-day operations, that will weather the current economic situation and rocket ahead when everything starts picking back up. Those companies that do not understand the value of these philosophies are essentially turning their backs on their customers' needs, and are likely experiencing lost sales right now in line with the economic downturn.

Sustainable business doesn't happen overnight. It is a never-ending process that involves many rounds of revisions. As the owner of a business in this troubled economy, never before has it been so important to listen to your customers and get to know who they are, and be prepared to back up your claims and support your customers through any problems they encounter with your products or services. By adopting simple, honest methods, you can single-handedly plot a sustainable path for your business that will safely see you through this economic storm.

Thank you,

David Anderson
Principal, Canvas Dreams, LLC

Read this blog in its entirety