An organization exists to serve customers whether they are called customers, clients, patients, students, constituents, or another name given to people who come to you for your products or services. A key measure of your success is how well you meet your customers’ requirements: Meet or exceed them and you improve satisfaction and loyalty with the benefits these provide; fail to meet their requirements and you lose customers, revenue, or support.
The first order of business, then, is to make sure you know exactly what your customers require. Most organizations don’t. They think they know. After all, they interact with customers every day. They may even be able to produce a list of customer requirements, which should really be called a list of assumptions about customer requirements because few organizations take a systematic approach to identifying, validating, and communicating key customer requirements.
I once worked with a manufacturer that was the worldwide leader in its industry. After completing its award application, I was asked to share my feedback on the application with the senior leadership team. My first bullet said: You do not have rock-solid understanding of customer requirements.
Boy, did they lay into me! “We’re the market leader,” one said, “of course we know what our customers want.” “We have thousands of customer contacts every day,” said another, “and we capture and share information about them daily.” When the initial backlash died down I explained that they did not have any processes for identifying the requirements of their customer groups, validating those requirements, and communicating them throughout the company. They still pushed back until the CEO said, “I think he’s got a point,” after which they discussed what they could do about it. To their credit, they took a systematic approach to identifying, validating, and sharing customer requirements, and customer satisfaction and retention improved.
The Baldrige Criteria ask: “How do you use customer, market, and product offering information to identify and anticipate key customer requirements and changing expectations and their relative importance to customers’ purchasing or relationship decisions?” The question is slightly different in the Healthcare and Education Criteria but the focus is the same. The 2008 Baldrige Award recipients describe systematic responses to this question in their award application summaries:
- Poudre Valley Health System (PVHS) uses patient satisfaction survey and community health survey data, with verification from other Voice of the Customer information, to determine key customer requirements. The patient survey ranks items by their relative importance to customers’ healthcare purchasing or relationship decisions. PVHS reviews its customer information monthly to identify changing expectations.
- Iredell-Statesville Schools identifies student needs through a number of methods including state and federal mandates, diagnostic assessment surveys of students, staff, and parents, and interaction with the business and at-large community. It uses stakeholder advisory boards and task forces to better understand the requirements of district stakeholders. Senior leaders and administrators meet monthly to discuss student needs and make service and programming determinations and recommendations.
- Cargill Corn Milling grew from a corn syrup business to a sophisticated corn and sugar processor by linking its customer listening and learning methods to its strategy process, translating the voice of the customer into strategies and actions that will create distinctive value. It uses a variety of methods to determine the relative importance of key customer requirements and expectations. It has defined how to deploy these requirements, who uses the information, and how the data from customer contacts is used.
To acquire customer knowledge, organizations must deploy sound approaches to listening to and learning from each of their customer groups. They need processes for gathering information from customers and reporting it internally. They need processes for collecting and analyzing the information to identify key customer requirements. They need to validate those requirements with members of each customer group to make sure the list is correct. And they need to communicate the validated list to everyone in the organization.
Customer knowledge is a keystone of a high-performing organization. With this knowledge, an organization can confidently focus its key processes on meeting and exceeding its customers’ requirements.