The new competitive reality ... customers are in charge: the world is oversupplied and underserved.(commentary)

In today's business environment, credit management needs to go beyond the primary functions of assessing and avoiding risk. With the development and growing influence of the Internet, your customers have access to the product your company sells from a multitude of vendors, unless you are lucky enough to be one of a kind. So, what's to keep them from going to another source?

Like it or not, the customer is in charge and 75% of your customer base can pack up and go at any time. In fact, the average corporation loses somewhere between 20%-50% of its customers every year. So, how do you keep them?

As a consumer, you know what bad customer service is like. Have you ever cancelled a credit card because the merchant's customer service rep simply wouldn't give you a break on that late fee or interest rate increase? Have you stopped going to a store because it's such a grueling experience interacting with its employees, or it's changed its operation or product? The questions you want answered are: Who knows me? Who does it my way? Who is willing to work with me? Who has memory of me as a customer?

Make no mistake, in the business world, it's no different and another question added to those above is, "Who really values my business?" According to Taking Care of eBusiness by Thomas M. Siebel, customers defect not because of dissatisfaction with basic products or pricing but because they do not feel well served by the organization. Examples are inadequately trained staff, unfriendly customer processes and a corporate culture of insufficient emphasis on customer satisfaction.

The new competitive advantage is the customer relationship, which is paramount to you--the credit professional. What you do with this reality is why the customer will or won't stay. If you can correct a problem, they'll call you every time. As credit professionals, you have the unique ability to do this. You are the ones who touch all departments in the company. You have the access and contacts throughout the ...