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How Does a Plant Closure Help Customer Experience?

Jim Tincher Jim Tincher 08/13/2018
Jean Fasching, Lead Consultant

This is a guest post written by one of our very own Lead Consultants, Jean Fasching

Recently, I ran across a Yahoo Finance post that announced the closure of a plant that produces high fructose corn syrup and industrial starch. In it, an executive mentioned that the closure would help improve Customer Experience commitments. It was a technical and financially dense PR release. But, I wondered, how can a plant closure improve Customer Experience commitments? With a plant closure, production capacity is reduced. This means turn-around-time may increase and trigger an increase in cost. Impacts like this typically don’t lead to an improved customer experience. Just who is this customer?

Digging in Deeper

So, I thought about the basic CX (Customer Experience) levers for improving Customer Experience: Efficiency, Ease & Emotions, and then I chatted with a few peers of large B2B or commodity-like industries about what’s important to their customers. Some of them were experiencing growth markets like airlines, mining and food ingredients, and some were in disruptive or declining markets like retail leasing, traditional utilities and food ingredients. For both growth and decline industry types, my peers said their CX would only improve if a supplier could reduce costs, improve turnaround times or increase quality or on-time deliveries with a plant closure. They could then take those savings and invest the profits into growth initiatives or, if needed, use them to ease business downturn financials.  One mentioned that if a trusted supplier convinced them that a plant closure could stabilize prices, that’s also a benefit because staying on plan or budget and not having to explain unexpected increases in costs or other complications to management is a good thing.

That said, most agreed that a plant closure announcement from a vendor or supplier that they depended on wasn’t a good thing. My peers mentioned that basic measures of cost, time and quality are part of their vendor metrics as well as softer items—things like ease or relationship performance. They can see in a few short months if a change—for example a plant closure—benefits them or not.  Everyone said that, depending on their relationships and contracts, they’d be looking around to see if some other supplier could provide them a better deal for what they needed in the case of a plant closure.

I decided to read the article a second time and see if I could find these customer experience improvement opportunities arising from plant closures. I noticed that the article mentioned two customers: the end customer and the shareholder customer. This article was definitely written for shareholder customers. Closing a plant in a declining market, to stave off losses and/or to invest in retooling or moving production to growth business areas, does make sense for a shareholder customer. A lesson for me was to read between the lines of PR announcements and understand which customer’s experience is being improved: end-customer, shareholder customer, vendor customer, employee customer or community customer; all have vested interest but varied experiences in a plant closure.

Jean has focused her entire career on deeply understanding customers and their experiences. She has led customer value teams at telecommunications, manufacturing and client services companies. Her past & recent customer experience consulting clients include Best Buy, Sears, Gerber, General Mills and Select Comfort. She is an industry expert in qualitative and quantitative market research. She is a skilled group facilitator and in-depth interviewer and uses her acute active listening skills to create and maintain an atmosphere of trust and respect.
Jean gives back to her professional community often and is a Past President as well as a Current Program Chair and Board Member of the Insights Association, Upper Midwest Chapter. Jean holds Bachelor of Arts degrees in Sociology and Business Administration from Hamline University, a Masters of Business Administration and Marketing Management from St Thomas University and an Executive Degree in Advance Program Management from University of Denver – Daniels College of Business.

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