All Posts Tagged With: "customer focus"
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…
Customer 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…
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…
18Apr2011 | Steve George | 0 comments | ContinuedBaldrige 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, smarter phones and tablets will move technology consumers closer to being connected 24/7, and in more powerful ways.
- Facebook Interrupts Location-Based Networking. Facebook is about to roll out a location-based service that promises to make location-based networking…
Best 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 Promoter Really the Ultimate Question?” by Drew Neisser (Fast Company, October 20, 2010).
CDW segments its market into two groups, Active Customers and Less Active Customers. It surveys the first group quarterly, receiving more than 100,000 surveys…
21Oct2010 | Steve George | 0 comments | ContinuedSeeking Very Satisfied Customers
According to a recent survey by American Express, most Americans are willing to spend an average of 9% more with companies that provide excellent service. The American Express Global Customer Service Barometer survey suggests that not many companies are taking advantage of this opportunity: Nearly half of the respondents said companies are helpful but don’t do anything extra for them, while 21% believe that their business is taken for granted. A little over a third think that companies have increased their focus on providing quality service in the current economy, which is higher than I would have expected considering all of the layoffs and the added pressure that puts on the people who remain.
One of the adages about customer service is that people are much more likely to talk about a bad experience than a good one. The survey contradicts that notion, finding that consumers will talk about a good experience 75% of the time but complain about a bad one 59% of the time. If that’s the case, companies should be investing more in delighting their customers rather than just avoiding a bad experience.
When it comes to your online image, the survey found that consumers put more stock in negative reviews on blogs and social networking sites (57%) than in positive ones (48%), but the percentages are close enough that positive and negative reviews are both important.
The Baldrige Criteria ask several questions about how you…
28Sep2010 | Steve George | 0 comments | ContinuedPlaying to Win Customers
It’s an old question—“What will help us attract and retain customers?”—with a very new answer: gaming. In “Play to win: The game-based economy” (Fortune, September 3, 2010), JP Mangalindan describes companies that “study and identify natural human tendencies and employ game-like mechanisms to give customers a sense that they’re having fun while working towards a rewards-based goal.” Companies don’t do this because they want their customers to have fun; they do it because it helps them attract and retain customers, which increases their revenues.
If you’re wondering how “gamification” might apply to your company, consider Mangalindan’s examples:
- Mint.com made personal finance a game. You can set a financial goal online and track your performance toward achieving it. You can check out your total financial score, which encourages financially responsible behavior. You can even compete with other members who have similar goals. If you think that sounds lame, think again: Mint.com claims more than 1.5 million active users.
- Nike sells a pedometer (Nike +) that you put in your sneakers. It monitors distance, pace, and calories burned and transmits the data to your iPod. The Nike software on your iPod “rewards” you if you reach a milestone. For example, if you run and you best your 5-mile distance time, Lance Armstrong congratulates you via audio clip. Nike has sold more than 1.3 million Nike + units.
- Foursquare is a mobile social network that “rewards” users with virtual badges. For example, check…
