Baldrige Model: How do you engage customers to serve their needs and build relationships?

Item 3.2 in the Baldrige Criteria asks key questions about how you support your customers and build relationships with them. The following processes, best practices, and problem areas look at critical issues in this part of the Baldrige model.

Your organization needs processes for:

• Identifying customer and market requirements
• Identifying and innovating products and services to enter new markets, attract new customers, and expand relationships with existing customers
• Enabling customers to seek information and customer support, conduct business with you, and provide feedback
• Determining and deploying the key support requirements for each customer group
• Determining which market customers and markets to pursue
• Using customer, market, and product/service information to improve marketing, build a more customer-focused culture, and innovate
• Build customer relationships and market share
• Manage customer complaints to resolve them promptly and address the causes of the complaints

Best practices to consider:

• Since people in the organization deal with customers daily, they assume that they know what customers require but have never validated their assumptions, which is a critical first step to improving customer satisfaction and loyalty.
• New product and service development processes involve customers in evaluating ideas and features.
• The organization also involves customers in identifying support requirements, which are then deployed to all employees who interact with customers, with measures of performance on those requirements in place and reviewed.
• Determining which customer groups and markets to pursue and which products and services to provide is an ongoing, strategic process that builds on core competencies and innovation.
• Understanding that very satisfied customers are much more loyal than satisfied customers, the organization identifies exactly how…

The Post-Industrial Marketplace

If your organization is interested in serving the post-industrial marketplace (if it’s not, you’re in trouble), Seth Godin is as good a guide as you’re going to find. Not only does he know what’s going on, he understands the impact of rapid technological change on business. As he writes, “the world is being remade again and again, and the agents of change are the winners.”

The quote comes from “A post-industrial A to Z digital battledore,” which lists his 26 favorite neologisms (even though most are not newly-invented words). Several thought-provoking definitions relate to meeting customer requirements including:

• C is for Choice: “Digital commerce enables niches” because “given the choice, people will take the choice.”
• F is for the Free Prize: “People often don’t buy the obvious or measured solution to their problem, they buy the extra, the bonus, the feeling and the story.”
• I is for Ideavirus: “Ideas that spread win, and you can architect and arrange and manipulate your ideas to make them more likely to spread.”
• K is for kindle: Not the ebook reader. “The internet responds better to bonfires that are kindled over time, to ideas that spread because the idea itself is the engine, not the hype or the promotion.”
• O is for the Orangutan: “The primate is the best way to think about how people interact with websites. They’re like monkeys in a psychology experiment, looking for the banana. If your website offers a banana, people are going to click on it.”
• R is for remarkable: “In a world without effective, scalable advertising,…

Small Wonder

Stoner expects every one of its employees to be a leader. Before starting their jobs, new employees complete two weeks of orientation that includes shadowing every job in the company—including that of the president. They can do all that in two weeks because Stoner only has 45 employees.

Located in Quarryville, Pennsylvania, Stoner makes specialized cleaners, lubricants, and coatings, primarily for car care. In 2003, it became the smallest company to win the Baldrige Award.

“We first learned about Baldrige in 1991 through the local Lancaster County program,” said Rob Ecklin, Jr., Stoner’s president. “We started to familiarize ourselves with the criteria then.” Stoner became the first company in the county to win the award in 1995. A few years later it submitted its first Baldrige application.

“We like to learn, to challenge ourselves and to be challenged,” said Ecklin. “Only a small percentage of companies truly want to improve. We’re one of them. We get excited about performance excellence. This is not a sexy business. It’s not high tech. Not flashy. But we’ve been able to get extraordinary results from ordinary people.”

Stoner gets these results by expecting every employee to be a leader. It involves all employees in setting the direction for the company. It uses teams to flatten the organization and push accountability to the front lines. It reinforces accountability by giving every employee the authority to spend up to $1,000, without supervisor approval, to resolve customer questions or complaints promptly. As a result, Stoner’s retention rate for key customers is…

Fast Food Customer Focus

When Pal’s Sudden Service, a small fast-food chain in Tennessee, won the Baldrige Award in 2001, its president, Thom Crosby, suddenly realized that winning prohibited them from reapplying for five years. “I called up the head of the program and asked if we could decline the award and stay in the system. He didn’t want to hear that.”

Pal’s continues to conduct annual internal assessments because, as Crosby states, “I’m a real big believer.” Like other world-class companies, Pal’s benefits from asking and answering key questions that reveal how the organization works. The snapshot produced by this exercise becomes the engine for change, improvement, and success.

The questions explore all areas that are critical to an effective management system. Many of the questions have never been asked, which means many of the areas they address have never been evaluated. And therein lays their power.

A few years ago I asked these questions of senior leaders at an organization that dominated market share in its industry. One question in particular solicited a variety of responses. The question was: How do you determine key customer requirements and expectations?

Many of the leaders talked about how they interacted with their customers daily. Others mentioned customer surveys, complaints, and lost customer interviews, among other approaches. Nobody described a process. I asked how they used the information from these sources to determine customer requirements and they said they knew what their customers required because they talked to them every day. In other words, they had no process for determining…