£bn FTSE100 company
A large customer threatens to leave
Business Problems - Overcharging and billing errors upsets important customer
A £bn FTSE company renown for its impeccable standards of service had a complex contract with a very important, large customer. The contract was worth £M pa - the largest in the division. The company provided a bespoke service to a very high standard of quality. However they had severely damaged the customer relationship by over-charging, duplicating items and other errors over many years. Also the customer kept disputing charges which he claimed were included in the basic fee. Despite management intervention and reassurances, the company kept repeating errors and could never get to grips with the customer’s problems. The customer was now fed up and was talking about going somewhere else. Also he wanted to downsize the service to save money.
We were asked to act as overall Customer Account Manager to sort out the customer’s billing problems, to negotiate the downsizing and to retain an important customer contract. We had to manage the division’s profit margin and coordinate the sales, accounting and operations units. Also we had to project manage the internal downsizing programme - at the same as maintaining staff morale and high standards of customer service and delivery.
Our solution - Better communications, plus simpler contracts and accounting processes with cost and headcount reduction. One executive to oversee sales and operations.
We used our communication and psychological skills to keep everyone informed and to obtain consensus on our approach. Our first job was to talk to the customer, the sales team, the operations division and the accounts department to understand their problems. We concluded the heart of the problem was the complexity of the contract and differences in interpretation between the parties regarding chargeable and inclusive items. We also concluded that the nature of the contract had changed - from a high, off peak workload to a modest, 24 hours by 7 days workload. Also some key materials and services supplied by third parties had rocketed up in price. We proposed simplifying the charging procedures, writing off all overcharges, using much cheaper third party supplies and making only two staff redundant. We simplified the contract and service level agreement and recommended a single executive should manage the client relationship, the operation and the billing by the accounts department.
Winning results - Retain important customer, key staff & profit level. Win £M new business.
By acting as an independent intermediary, we successfully recovered the customer relationship. Also we were asked to stay on and manage the entire customer account - the customer relationship and negotiations, the divisional operational staff and the accounting and billing. Everyone involved could quickly see the benefits. The customer got a large refund for all overcharges, regular accurate invoices with all items clearly identifiable, reduced costs from downsizing and continual high standards of service. The division maintained their high profit margin and largest customer. The accounts department no longer had aggravation with billing disputes. Operational staff were pleasantly surprised there were only two redundancies (who were redeployed). The staff were rewarded with a pay rise for their good work and loyalty. Also they received regular praise and appreciation directly fed back by us from the customer. The customer was impressed and recommended the service to others. Consequently we also helped the company to respond to important £M sales bids for similar services and win new customers.