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: MEDRAD consistently scored 80% or higher compared to 50% for the best-in-class benchmark for service support using the Net Promoter (NP) system.

Your customers’ satisfaction depends on having the right quality of goods and services to meet their needs. This requires a clear definition of the meaning of quality. We define quality as fitness for purpose, meaning no matter what you produce; a good or service, it must be fit for its purpose. To do this, every good or service must have the right features to satisfy customer needs and must be delivered with few failures. This is true in any industry. Take Southcentral Foundation of Alaska for instance, one of the 2011 winners of the Baldrige Award in the Health Care category. Their unique Nuka System of Care is a relationship-based health care delivery system.  Nuka’s organizational strategies and processes; medical, behavioral, dental, and traditional practices; and supporting infrastructure work in partnership with the Native Community to support physical, mental, emotional, and spiritual wellness. The system is owned, managed, directed, designed, and driven by Alaska Native people.

This customer focused mindset needs to come from top management and trickle on down through the rest of the organization. In an interview by Steve Denning with Clayton Christensen entitled How Pursuit of Profit Kills Innovation and the U.S. Economy, Christensen makes a great point in stating, “Making money and corporate survival now depend not merely on pushing products at customers but rather on delighting them so that they want to keep on buying. To prosper, firms must have knowledge workers who are continuously innovating and delivering a steady supply of new value to customers and delivering it sooner.” Christensen speaks the truth; organizations must continuously satisfy their customers but they must also supply them with new value and do so faster. The customer is your boss, and the customer still comes first.

Source: Juran’s Quality Handbook, The Complete Guide to Performance Excellence, 6th Edition

Source: “Clayton Christensen: How Pursuit of Profits Kills Innovation and the U.S. Economy.”

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 that guarantees that everyone at the airline will remain focused on the customer.

The airline reinforces this customer focus through a news ticker that runs on the lower third of computer screens and televisions in break rooms and crew lounges. The ticker show unedited, unfiltered, real-time customer reaction. If a reaction is negative, the airline addresses it immediately. As Nardello observes, “Our speed in addressing the problem could make the difference between retaining that customer for future flights or losing him or her forever.”

No company can prepare for every scenario that can trigger customer dissatisfaction, which is why those that excel at customer service train and empower their frontline employees to solve problems as they see them. “We believe employees perform best when empowered to improvise and bring unmatched service to their customers in a sincere, personal way,” Nardello writes.

To read more about excellent customer service, click on these articles:

• What Do Your Customers Require?
• A Baldrige View of Customer Experience
• Seeking Very Satisfied Customers
• The Bottom-Line Value of Customer Engagement

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 their expectations throughout the customer life cycle, and how you measure your performance in these areas to increase satisfaction and engagement.

Creating value for your customers requires, first, a rock-solid understanding of what they value and, second, effective processes for delivering that value. As Baldrige Award winners have shown, companies that integrate Baldrige demonstrate their ability to create value for their customers by industry-best performance on key measures of customer satisfaction and engagement.

The ten most positive brands identified in the Meaningful Brands survey and the Center for Positive Marketing index are shown below.

Meaningful Brands: (1) Ikea; (2) Google; (3) Nestle; (4) Danone; (5) Leroy Merlin; (6) Samsung; (7) Microsoft; (8) Sony; (9) Unilever; (10) Bimbo

Center for Positive Marketing: (1) Wal-Mart; (2) Facebook; (3) Google; (4) Visa; (5) McDonald’s; (6) Yahoo!; (7) Coca-Cola; (8) Amazon; (9) Microsoft; (10) Kellogg’s

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 being customer-focused, click on these articles:

• Dangerous Assumptions about Your Customers
• Smart Question #3: Who Are Our Customers and What Do They Require?
• Customer Culture as Differentiator
• Kano Satisfaction Model
• A Baldrige View of Customer Experience

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 training, financing, and advice to new dealers and encourages them to expand. Murphy says that “investing in customer service helps bolster the kind of brand image Red Wing wants to build.”
• It plans to add 125 new stores over the next five years.
• The company also has 3,000 independent retailers and direct sales to nearly 2,000 corporations that contract with it to outfit their workers. Its 200 trucks are mobile shoe stores that visit auto plants, construction sites, and steel mills on a regular schedule, fitting employees for new boots and shoes.
• Red Wing’s casual work boots have become hot sellers in Europe and Japan, where white-collar, 18-to-35-year-old men wear them after work with expensive jeans. Eight-five percent of the company’s casual shoe business is done outside North America.

Companies are naming Chief Customer Officers to address unhappy customers and/or accelerate growth. The Red Wing Shoe Company shows another proven approach to achieving those goals.

To read more about customer focus, click on these articles:

• Do You Have – or Need – a Chief Customer Officer?
• A Baldrige View of Customer Experience
• Dangerous Assumptions about Your Customers
• Seeking Very Satisfied Customers
• Smart Question #3: Who Are Our Customers and What Do They Require?

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 a CCO, I would recommend using the Baldrige Criteria in the Customer Focus category to help define roles and responsibilities. A CCO who was able to develop systematic processes that addressed the questions in this category would be well-positioned to succeed.

In addition, Hagen identified three preconditions for the success of your new CCO:

• A strategic mandate to differentiate based on customer experience
• A portfolio of successful projects that create buy-in and a cultural maturity in the organization
• A uniform understanding on the executive management team for what the position can accomplish

To read more about being customer focused, click on these articles:

• A Baldrige View of Customer Experience
• Dangerous Assumptions about Your Customers
• Walk in Your Customer’s Body Armor
• Seeking Very Satisfied Customers
• Smart Question #3: Who Are Our Customers and What Do They Require?