Can’t get no satisfaction

Many moons ago when I first became interested in business I started reading annual reports from huge corporate bulwarks like IBM and Intel and to a lesser extent smaller public companies such as Cognos. In the maze of numbers, I found an item called Goodwill. It was listed as an asset.


puzzled, I asked my colleagues how a company’s goodwill could be listed as a tangible asset like office furniture or computer systems.

How could that be resold in case the company wanted to be acquired or in a worse case scenario during a bankruptcy?

What I found out was that goodwill is a tangible asset if the company in question has excellent customer service. If customer satisfaction was high, the likelihood of repeat business could be measured and placed as a company asset.

In the channel, customer satisfaction is hardly talked about. Top of mind for most resellers is survival, margin pressure, developing solutions, finding untapped lucrative markets and transitioning from box pusher to solution provider.

While all those areas are vitally important, shouldn’t customer satisfaction be amongst them? Remember the old slogan, the customer is always right? Well, the customer doesn’t always have to be right if you have dozens of other customers to replace dissatisfied customers. This was the case during the Y2K crisis and the dot-com craziness.

Servicing the customer to the max has been talked about, but it is just that — talk.

Cisco Systems, on the other hand, is through talking. With its latest channel program,dubbed Value Incentive, Cisco is forcing the channel to deliver on customer satisfaction.

Top Cisco VARs in Canada and the United States will be offered top dollar rebates, but only if they score 4.16 out of 5 in customer satisfaction. This score is only for U.S.-based resellers.

Cisco Canada is still figuring out the minimum required score for VARs here. By the way, doing the scoring will be the customers themselves — a group that will be objective.

No other vendor has taken this strategy to the channel so far. Cisco should be commended because it is risky. The channel may not like the fact that their rebates are out of their control and in the control of their customers. The customer will now truly be king. They will dictate and they will be demanding, and Cisco partners will have to adapt or lose out.

Could this backfire on Cisco? Sure, resellers may start to develop solutions with systems from other quality vendors.

But whether Cisco fails or is ultimately successful, the message is clear: (at least from Cisco’s end of it) start satisfying customers.

If you think about it long-term, the more satisfied customers you have, the more goodwill you build up in your company.

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Jim Love, Chief Content Officer, IT World Canada

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