Meeting customer needs cost money?

While providing a service or product in many circumstances involves spending and require investment, meeting expectations which customers do not value will certainly cost much more to the company. It is sensible and most company executives think that way but the reality is far from it. In many circumstances, these executives will disregard the impact on customer experience and whether the expectations are met and will primarily and entirely focus on their internal process and conveniently ignore about the rest. Are they right in doing so?

On regular basis, we send our product collaterals to retailers and the content changes with new information for example with a new promotion or new product lines. It puzzled us when we received queries on past promotions (2 years ago) and complaints from our retailers. I was tasked to look into it.

The marketing team was coming out with new collaterals every quarter but the distribution unit had in their inventory collaterals of at least 1 year old. Besides the lack of synchronisation between marketing and distribution unit, the latter was doing bulk order to reduce printing costs.

I probed into the reasons. Their answer: they were sending older collaterals to run out their stock as they consider it as a waste and in their words "they have a lot to spare". Even when we brought the issue that it would cost much more sending collaterals with outdated information. This has led to customer complaints and has impacted our brand negatively. Their reply was to meet customers expectations cost money and we would have to pay a lot to destroy the stock!

There was a deadlock as they were not willing to spend a single dollar. I mapped the value stream of the processes and requested for the actual cost for destruction. Only after a few weeks of debates and push back, they came back to us that it would be free. I was puzzled by the inaction of the team to meet customer expectation and really took a few minutes to fix the broken process and established proper linkages and removed "waste" from value chain.

Luckily, we intervened on time because distribution unit would not have been able to run out their old stock at all as there was a disconnect in terms of the frequency of printing marketing collaterals and distributing them to our retailers. The issue was "obvious" and amazingly they decided to ignore it as they focused only on their internal processes to reduce costs but did not think of the big picture where it would cost even more to the organisation.

We have fixed the straight forward issue, and we have not seen this type of complaints from our customers. In the meanwhile, that's a couple of thousands of dollars saved per week.