3 | Customer
Baldrige: As American as Fast Food
In 2002, Rudy’s “Country Store” & Bar-B-Q increased the sales of its breakfast taco by 91% by following K&N Management’s Product Offering Identification Process shown on the left.
A 2010 Baldrige Award winner, K&N operates Rudy’s and Mighty Fine Burgers, Fries and Shakes in the Austin, Texas, area. The company has 450 employees and annual revenues of $50 million.
The Mighty Fine concept itself came out of this identification process. K&N’s owners needed a new concept to grow the company. According to the company’s award application summary, available here, “After conducting industry research, senior leaders identified the burger market to attract new guests and grow the organization for the following reasons:
- The core competencies of K&N could easily be transferred to a premium hamburger concept.
- Industry trends indicated a premium hamburger concept would meet shifts in guest preferences.
- We wanted to be one of the first fast-casual operations in Austin to feature a premium hamburger.”
They developed a strategy to design, build, and open the new concept, using the same process that boosted sales of the breakfast taco. A test kitchen allowed them to develop a menu, test products, and refine recipes with input from employees, suppliers, and guests. As a result, Might Fine has better…
14Apr2011 | Steve George | 0 comments | ContinuedDangerous Assumptions about Your Customers
One of the fundamental weaknesses I’ve seen in the dozens of organizations I’ve worked with is their assumption that they know what their customers require. I understand why they assume they know. They hear the compliments and complaints. Their customers buy what they are selling. Their patients receive services. Their students learn. Their constituents keep coming back. They interact with these customers, patients, students, or constituents daily. Of course they know what their customers require.
I remember helping a manufacturer early in its Baldrige application process. It was its industry’s worldwide leader and had been for several years. It worked closely with its distributors and had ongoing customer contact. It assumed it knew what each customer group required even though it had never formally determined those requirements or tested them with customers to make sure the lists were right.
When I presented my evaluation of its application to senior leadership, my first point was that it did not have a rock-solid understanding of customer requirements. I thought they were going to tear my throat out until the president interrupted and said he thought I had a point. As a result, the company hired a market research firm to close this gap. Two…
1Mar2011 | Steve George | 0 comments | ContinuedSmart Question #3: Who Are Our Customers and What Do They Require?
(This excerpt is from The Baldrige Edge, an e-Guide from Baldrige.com. You can learn more about the guide by clicking on the black-and-red box on the right.)
Your organization exists to serve people, as does your department and your work group. Without customers, external and internal, you don’t have a job. Without satisfied, even delighted, customers, your job—and your organization—may be in danger.
In the course of a day’s work, it’s easy for the customer to disappear from the discussion, and that is an opportunity for you. We’ve already talked about process thinking (Smart Question #1) and the fact that everything you do, and everything your group, team, or department does, is part of one or more processes. The final step in each process is the delivery of something to the customers of that process. I’ll give you a few examples:
- You deliver end-of-the-month financial results to leadership. The leaders are the customers of this reporting process.
- You deliver training to employees. The employees are your customers, as are the leaders responsible for developing your workforce.
- You deliver products to customers through distributors. Both the end users of your products and the distributors are your customers.
- You deliver information to people who contact your call center,…
Meaningful Innovation
One of the great strengths of the Baldrige model is that it starts at the beginning. How do you set your mission and vision? How do you determine what your strategic plan should address? How do you identify your key customer groups and markets? How do you know what motivates your employees? How do you design your work processes?
These are foundational questions: If you don’t have rock-solid answers for them, everything that follows will be shaky.
The same is true for innovation. The most innovative organizations start at the beginning with a rock-solid understanding of customer wants and needs, organizational capabilities, and transformational trends that could disrupt their markets and give them a competitive advantage.
The transformational potential of innovation is the subject of “On Tracking Transformational Trends” by Scott Anthony (HBR, January 17, 2011). From his experience, he identifies three areas to assess whether a trend is or is not transformation, using the iPod and 3-D television as examples:
- Market fit. The innovation makes is easier and simpler to do what people are already doing. The iPod provides music on the go. The 3-D television prioritizes something that wasn’t that important. “Do people really want to make the effort to watch 3-D television?”
- Performance.…
Baldrige Embraces Social Media
The 2011 Baldrige Criteria give a shout-out to social media with a new question added to the Customer Focus category: “How do you use social media and Web-based technologies to listen to customers, as appropriate?”
A lot of organizations will hide behind that “as appropriate” qualifier, arguing that social media has nothing to do with them. According to David Armano (“Six Social Media Trends for 2011,” HBR, December 6, 2010), a global survey indicates that only 29% of companies have a social media policy. That puts 71% well behind the curve.
Everybody uses Google, right? Last year, Facebook had more weekly site traffic than Google. And it’s not like even the most Luddite of companies ignores social media all together: Some surveys report that 95% of companies use LinkedIn for recruiting.
So it’s not just about using social media and Web-based technologies to listen to customers, as the Baldrige question addresses, but how you use them to acquire and keep customers. With that in mind, here are Armano’s six social media trends for 2011:
- It’s the Integration Economy, Stupid. The challenge is to integrate social media into all facets of business from marketing to crisis management and beyond.
- Tablet & Mobile Wars Create Ubiquitous Social Computing. Cheaper,…
A Baldrige View of Customer Experience
The Baldrige Criteria ask: How do you create an organizational culture that ensures a consistently positive customer experience and contributes to customer engagement?
Adam Richardson defines “customer experience” as the sum-totality of how customers engage with your organization and brand through the entire arc of being a customer. In “Understanding Customer Experience” (HBR, October 28, 2010), he suggests three layers of customer experience to consider:
- Customer Journey. The journey a customer takes with your organization from first contact to providing a product or service to supporting that product or service and extending the relationship with the customer.
- Touchpoints. All of the points where the customer interacts with your organization.
- Ecosystems. By Richardson’s definition, the integrated ecosystems of products, software, and services that offer more than isolated touchpoints.
Have you ever used Zipcar? It’s the largest car-sharing company in the United States (it’s also in Vancouver, Toronto, and London). Here in the Twin Cities, the Zipcar locations are all in or near the University of Minnesota; college students are big Zipcar customers. Richardson touts Zipcar as a great example of a company that used its understanding of the entire arc of the customer car-renting experience to turn car-sharing into a mainstream business—and help the environment in the…
1Nov2010 | Steve George | 0 comments | ContinuedBest Practice in Measuring Customer Satisfaction
This is a best practice in the measurement of customer satisfaction courtesy of CDW, one of America’s largest private companies with technology sales of more than eight billion dollars in its most recent fiscal year.
CDW had been using Net Promoter to measure customer satisfaction and brand health. You get a Net Promoter Score by asking one question of your customers—How likely is it that you would recommend your company to a friend or colleague?—and then grouping the responses by promoters (those who answer the question with a 9 or 10), passives (7-8), and detractors (0-6). You subtract the percentage of detractors from the percentage of promoters to get your Net Promoter score.
This has been a leading edge measure for many companies because it helps them identify opportunities to improve customer satisfaction. CDW decided that Net Promoter was too one-dimensional so, with the help of the person who developed Net Promoter, it went to a three-question approach that, according to Calvin Vass, CDW’s senior manager of research, looks at “different dimensions of the relationship; what the customer plans to purchase with us, if they are committed, and what they would do if we went away.” Vass is quoted in “Is Net…
21Oct2010 | Steve George | 0 comments | Continued
