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Keeping the “Service” in Contract Service Provider

This is the fourth post in my blog series on the evolution of the CMO industry. Today, I would like to focus on the opportunity to differentiate through customer service, and how this can make a meaningful impact to not only your customer satisfaction, but also your bottom line. What is the age-old adage? If what you sell is the same, than what you do had better be different.Nothing could be more applicable to the world of pharmaceutical contract packagers and manufacturers. This is not to say that value cannot be created in differentiating through technology and capacity. But it is to say that it is much more difficult and costly compared to finding new ways to delight your customer. “Customer service” can conjure up notions of help desks and call centers. This is not what I am referring to here. The nature of the problems and solutions encountered in day-to-day operation that impact your customer are much more sophisticated than that kind of model would allow. I encourage you to ask yourself the following three questions as a start down the path of differentiated customer service:

Are you organized to delight your customer?

In the most basic of terms, the function of servicing the customer logically fits between sales and operations. Yet often times in the CMO world, it is a resource from one or the other or both groups that is the customer’s primary point of contact. This approach, while perhaps necessary for some customer relationships, can split your organization, result in sub-optimal service, and ultimately create confusion and frustration for your customer. If you have sales people, manufacturing people, quality people, and packaging people running around trying to respond to day-to-day customer inquiries and requests, you need to ask yourself how well are they doing, and who is doing their day job?

Are your processes setup to delight your customer?

Can you list the top five most common requests that your customers make with some level of frequency? Do they want API inventory reports?  Do they want to know the status of their batch? Do they want a stability sample pull? Do they want to change the color on their package from green to blue? If you haven’t done it lately, you should take a simple inventory of what your customers are asking for and then figure out if there are better ways to respond. Perhaps information could be made available on-line. Perhaps you could “push” results to your customers rather than waiting to be asked. And perhaps you will even find that you are fielding requests that should be considered “off contract” where there should be some kind of cross-sell or up-sell involved. In many CMOs, processes have become customer specific. This works great until you try to grow. Avoid the tyranny of the immediate and make a commitment to standardizing just a handful of processes across your organization this year. The redundant, unnecessary, and sub-optimal work effort you pull out of the fabric of your organization’s time will be well worth the investment.

Are your incentives setup to delight your customer?

A company doesn’t just do great customer service. It starts with a mindset and an attitude. And leaning on another age old adage, the behavior you reward is the behavior that you get. To incent your organization to delight the customer, you can and should take basic steps like satisfaction surveys, recognition programs, and other kinds of rewards. However, to do this right in a CMO environment, you must first fully understand your true costs to serve. Mantras of “delight the customer” and “the customer is always right” will fall flat and ultimately fail if your employees translate them into bad business. You don’t want that and neither do the customers with whom you want to do business. The answer is to pick one product for one customer and define the true product cost – the profit and the cost to manufacture and to service. Then look for ways to reward behaviors that keep costs down, profits up, and customers happy. Yes it can be done, but if you can’t measure it, you can’t manage it. If you would like more information on Clarkston’s CMO Capability Maturity Model, or would like to discuss how to apply it to your organization, please do not hesitate to contact me at