3 | Customer
The Customer Is Still #1
In today’s global economy and competitive business world, fully satisfying your customers is imperative. Empowered by technology, dissatisfied customers tend to share their experiences with anyone who is willing to listen or read about their stories. When these experiences are negative, the effects on an organization can be detrimental. For many customers, the service landscape of recent years has become almost unrecognizable as they navigate through company websites and voice response systems, wait for delayed shipments only to receive the wrong goods or become frustrated over language barriers in their discussions with suppliers’ service representatives. These experiences do not do much to build customer satisfaction and loyalty. Despite countless companies struggling to operate profitably and respond to customer needs, there are organizations doing it right. In fact, some companies are delivering benchmark quality products and services to their customers.
Delivering quality products and services that meet customer’s needs separates the leaders from the pack in a competitive marketplace and it is essential to survival in a competitive global marketplace. Those organizations that engage in a relentless pursuit of delivering high-quality products and services outperform those that do not. MEDRAD, one of the 2010 Malcolm Baldrige Quality Award winners, uses a systematic voice-of-the-customer approach to better focus on customer needs. Customer information is collected from listening posts, trade associations, benchmarking, and other mechanisms deployed globally and tailored by region, business, and language, and then communicated to the appropriate sales team for analysis. The success of these tactics can be easily recognized in the numbers:…
30Jan2012 | Joseph A. De Feo | 0 comments | ContinuedCreating a Customer Culture
It’s always refreshing to hear a company that excels at serving customers describe its approach, especially when that company is in an industry that generally treats its customers like cattle.
Hawaiian Airlines has ranked among the leaders in customer service for years and is routinely ranked first by the US Department of Transportation for on-time performance and fewest cancellations. Charles Nardello oversees aircraft, flight, and customer service operations at Hawaiian Airlines. In a recent article on the HBR Blog Network, he discusses how the airline improved operational performance while maintaining service excellence, citing three things a company must do well “to maintain an unbeatable level of operational excellence: (1) Get very close to their customer; (2) Benchmark against itself on a consistent basis; and, (3) Empower employees to address the unexpected.”
A customer focus permeates Hawaiian Airlines. “For every decision we make, from the most basic to the complex, the customer always comes first—they are the driver of our decision-making and strategic planning,” writes Nardello. A culture that brings the customer perspective to every decision acts far differently than a company where customers are an afterthought or are only considered when addressing customer issues.
Hawaiian Airlines has an independent agency survey customers every month on their experiences with the airline and factors the results into every employee’s bonus pay. “Every employee receives a scorecard rating them on how well they’ve performed in interacting directly with the customer or, in the case of senior executives, on decision-making and strategic planning,” Nardello writes. It’s an approach…
14Nov2011 | Steve George | 0 comments | ContinuedDoes Your Company Create Real Value?
According to a recent survey of 50,000 consumers in 14 countries including the US, 70% of the brands we interact with could disappear entirely and we wouldn’t notice it.
The survey also found that 20% of the brands we interact with have a positive impact on our lives.
Which list would your company make? (You can see two Top 10 brand lists at the end of this article.)
Umair Haque, director of the Havas Media Labs, explains the difference: “Did this brand make you fitter, wiser, smarter, closer? Did it improve your personal outcomes? Did it improve your community outcomes? Did it pollute the environment? We’re trying to get beyond ‘did this company make a slightly better product’ to the more resonant, meaningful question: Did this brand actually impact your life in a tangible, lasting, and positive way?”
I’ve written before about corporate social responsibility and how companies are embracing it to gain a competitive advantage (here and here), which is one part of the conclusions drawn by the Meaningful Brands survey and Haque. The other part is that companies are creating enduring brands by creating value for their customers, making them “fitter, wiser, smarter, closer,” to use Haque’s description.
This is where integrating the Baldrige model can help. The Baldrige Criteria ask key questions about understanding who your key customer groups and market segments are, what each requires, and how you meet and exceed those requirements. The Criteria ask how you build and manage relationships to acquire new customers, build market share, retain customers, and exceed…
10Nov2011 | Steve George | 0 comments | ContinuedBaldrige Model: What are your customer-focused performance results?
Item 7.2 in the Baldrige Criteria asks for your key customer-, patient-, or student-focused results. The following examples from Baldrige Award-winning applications show strong current levels, positive trends, and positive comparisons to key benchmarks. To read the descriptions of these measures and to see a broader range of Item 7.2 measures, go to the Results category responses of Baldrige Award-winner applications here. Chart numbers may not correspond to the Item number because of changes to the Criteria.
What Do Your Customers Require?
It’s a fundamental question that demands a profound knowledge of who your customers are and what each individual customer is seeking. B. Joseph Pine II, one of the pioneers of the mass customization concept, recently wrote an insightful article for HBR that bashed the notion that most organizations are customer-focused. “They focus on markets rather than on any real, living, breathing individual customer,” he wrote here.
Pine offers a fresh perspective on what it means to be truly customer-focused with a list that could be a how-to for understanding what your customers require:
- Every customer is his own market. Every customer deserves to get exactly what he wants at a price he’s willing to pay, and companies must make that happen in a way that makes them money.
- Recognize that every customer is multiple markets. Customers want different offerings at different times under different circumstances.
- You must modularize your capabilities. Break your offerings apart into modular elements like LEGO building blocks, and then create a design experience that helps each customer figure out what he wants.
- Don’t overwhelm your customers with choice. “Fundamentally, customers don’t want choice,” says Pine. They just want exactly what they want.”
- Recognize that mass customization is not being everything to everybody; rather, it is doing only and exactly what each individual customer wants and needs.
- Remember your customers’ preferences. Create a database of customer profiles so that, with every interaction, you can lower our customers’ sacrifice—what they have to settle for or buy from you versus what they truly want and need.
To read more about…
4May2011 | Steve George | 0 comments | ContinuedCustomer Culture as Differentiator
Yesterday, I wrote about companies that have created the position of Chief Customer Officer to bring the Voice of the Customer to the senior leadership team. Today, I want to write about a company that probably doesn’t need a CCO because it differentiates itself through its customer-focused culture.
The Red Wing Shoe Company serves blue-collar trades such as construction workers, telephone lineman, and miners. Located in Red Wing, Minnesota, a city of 6,500 southeast of St. Paul, the company employs 2,200 people, half of them in Red Wing. Earnings for 2010 were $448 million, up 12% from 2009, which was a tough year for the economy and for the company. According to an article on Bloomberg (available here) Red Wing “went to a four-day work week, froze raises, scaled back its second shift, and offered voluntary retirement packages” to survive the recession, but hired more than 300 employees in 2010 as sales rebounded.
Red Wing carves a unique path through the shoe industry:
- It distributes its footwear through nearly 500 company-owned and independent dealerships, which are “old-fashioned shoe stores with sales people who sit with customers, measure their feet, and fit shoes one pair at a time.”
- The 285 independently-owned stores are dealerships from which Red Wing collects no franchise fees, marketing fund contributions, or royalties on sales. “Our goal is to provide great service through great dealers,” said Dave Murphy, president and chief operating officer. “We don’t want to saddle them with fees that make it harder to do their job.”
- Red Wing offers…
Do You Have — or Need — a Chief Customer Officer?
I was ready to mock the article as soon as I saw the title, “The Rise of the Chief Customer Officer” (Paul Hagen, HBR, April 18, 2011), but then I read it and found myself agreeing with the idea.
According to Hagen, a lot of companies have created the CCO position including USAA, Allstate, FedEx, and Boeing. In fact, he gathered data on 155 CCOs and conducted interviews with several of them. He found that companies hire a CCO for two reasons: (1) to fix issues that are creating unhappy customers; and/or (2) to accelerate growth, better integrate acquired companies, or shift priorities.
I imagine a number of VPs of marketing and sales have argued that these two things are their jobs, and they probably should be, but the fact that their bosses see the need for a CCO suggests that marketing and sales have come up short. My sense from working with several marketing and sales leaders over the years is that they are inside focused out, while a CCO takes a different perspective: outside looking back in to the company.
Hagen cites the Boeing Training & Flight Services division as an example. Its sales and business development teams were focused on meeting short-term revenue goals, according to CCO Roei Ganzarski, “but no one was looking at things from the customer’s holistic perspective. We knew we needed to change our culture to better serve the one reason we all exist—our customers.”
If your organization is looking into this new position or has recently installed…
18Apr2011 | Steve George | 0 comments | Continued
