|
|
| False equation |
March 14, 2006 |
By Trevor Marshall
Larry Keating’s story is one of notable entrepreneurial achievement. Keating had nothing but a high school diploma when he created Keating Technologies two decades ago. He started his manufacturer’s representative business with only $11,300 in his pocket and has grown it into a national entity that has brought more than $1.3 billion worth of technology into Canada. The company has worked with many of the biggest tech players including 3COM, Adaptec, Celestica, Computer Associates, Logitech, Palm, Creative, US Robotics and Xircom.
It’s an interesting story, but one Keating is not much interested in discussing now.
The Markham, Ont.-based CEO has a more immediate concern in mind: concern about the dismal state of customer service in the high-tech sector. The mad rush for market share means customers have been left behind, he argues. It’s a tactical error many companies are committing, but it also creates an opportunity for those that do invest in service.
And customer service is the chisel Keating hopes will carve a niche in the overcrowded notebook business.
Backbone: For 20 years your company made its money by supplying customer support on behalf of clients, so you are in a good position to comment on the state of customer service in the high-tech industry.
Keating: We’re at about $1.3 billion worth of technology that we’ve brought to Canadians, and it’s been everything from complex network storage devices at the high end of technology, right down to consumer electronic products like the Rio MP3 player and the Palm itself, which is really a crossover product between the corporate world and the consumer world. Our basic ideology has been to bring technology to Canadians at a level of service and satisfaction that fully delivers on the promise of the technology.
Backbone: How would you characterize the current state of customer care in the technology sector?
Keating: What I can’t get over is how critical some technologies have become to our lives, yet customer care and service and programs like warranties have been relegated down the food chain because of the hyper-competitive nature of our industry.
I think companies—especially larger companies—today are often talking out two sides of their mouths. They say, “Brand is everything. Protect the brand. People are ultimately going to buy the product because they trust the brand.” But what goes in behind the brand? Is it just the latest technology? Is it the best price? [The technology industry] has relegated customer care down to a second- and third-tier notion where it’s being outsourced to places overseas.
Backbone: But if overseas sites can operate a call centre more cheaply then there is an obvious incentive there for businesses.
Keating: Admittedly they have some huge competitive advantages and some huge cost advantages, but overall, I (as a customer) don’t get satisfied the way I need to get satisfied.
Just type the words “computer complaint” into Google and look at the Web sites that pop up where people are aggregating their information. People are publishing their (customer care) experiences. It may be just a $92 issue, but it’s causing $920,000 worth of brand damage because companies don’t know how to deal with that.
The Internet has put the latest information at the fingertips of consumers and corporations, and I think that while there has been an incredible disintermediation of the purchase and dissemination of technology products, it has put incredible power in the hands of individuals to make sure they get satisfied.
That has created an incredible new urgency—especially for large corporations—to get their customer care, post-sales service strategy and protection of their brand right. If they don’t do it now, I don’t care how big they are, I don’t care what kind of momentum and lock they have on the market, if they don’t take great care of customers once they start buying a company’s technology, if they don’t start thinking about “customers for life” again, they’re going to have a problem.
Backbone: You said the industry has become hyper-competitive. But competition’s a good thing, isn’t it?
Keating: Hyper-competitiveness has done an enormous amount not just to drive technology innovation, but also process innovation to deliver products and services to consumers and businesses in a far more cost-effective way. And that’s great—competition works, no doubt about it.
But the issue comes to too much of a good thing. Companies are driving out margin with such fervour to capture volume sales and grow their business, but it’s reached a point where they haven’t afforded themselves the margins that are required to properly service the technologies. They believe there’s this enormous critical mass that will ultimately benefit their business as a huge company, and then they can rule the world in that particular technology. It’s a fool’s mission.
(Companies have to ask themselves) what is the ultimate goal here? Is it just to drive out cost and end up with an unhappy customer? I hope big companies start to measure the cost of losing one customer vs. the gains made by sending customer care offshore. I just don’t get it. I can’t make that math work. If you push the customer care that far away from the customer, the experience changes. And if you lose that one customer, what is the cost of that? What is the customer acquisition cost, the dissatisfaction cost and the clean-up cost from that bad experience? And how does it compare to just putting the right pieces in place in the first place?
Backbone: So you’re banking on superior customer care to carve a market for the new Keating Technologies line of notebooks. How’s that going to enable you to take on Dell and HP?
Keating: Notebooks have become a commodity, but at the same time the importance of the technology has gone up tremendously; they’ve replaced the desktop computer. For small businesspeople, the notebook is the platform of their business.
I think that as a product’s utilization value increases, its commoditization factor is impacted. This creates an opportunity for companies like Keating to carve a niche in the marketplace where we pride ourselves on the extended services we offer with the sale of the notebook.
Our plan is not to take on the volume competitors in any threatening way, but to find the market that appreciates the fact that we offer a three-year warranty on our products, which is the longest in the industry; that our customer care is based right here in Markham, Ont.; and that a lot of the features offered as extras from other notebook vendors—such as performance guarantees and accidental damage protection—are all included with our products.
It’s more than a statement about how important these technologies are to the users now. We can get into a beautiful circularity that comes with great customer care in that customers will go back and recommend our product, and they’ll come back and buy it again themselves.
That’s the greatest testament to a successful product.
|
|
|
| Top 300 Issue |
 
|
| Gadget of the Week (Canadian) |
|
Boost your cell
ARC Wireless Freedom Blade
Mobile data and voice are great, as long as the signal is strong. And while mobile networks are pretty good these days, road warriors quickly discover that dead zones still exist.
more>>
|
| Gadget of the Week (Japanese) |
Sounds of Japan
Why record just the visual when you can capture the sounds as well.
more>> |
| Backblog RSS feed |
Click to subscribe  |
|
sponsored by 
