All Posts Tagged With: "customers"
Baldrige Model: How do you obtain information from your customers?
The Baldrige Model: How do you obtain information from your customers?
Item 3.1 in the Baldrige Criteria asks key questions about how your organization listens to your customers. The following processes, best practices, and problem areas look at critical issues in this part of the Baldrige model.
Your organization needs processes for:
Listening to each key customer group and market segment across the entire customer life cycle, to former and potential customers, and to customers of competitors to obtain actionable information
Following up with customers on product/service quality, customer support, and transactions to acquire immediate and actionable feedback
Determining customer satisfaction, engagement, and dissatisfaction
Using data and information about customer satisfaction, engagement, and dissatisfaction to exceed their expectations and improve loyalty
Obtaining information about your customers’ satisfaction with your organization, products, services, and support relative to their satisfaction with your competitors and other organizations providing similar products and services
Best practices to consider:
Using established processes, the organization knows exactly what each of its customer groups and/or market segments requires and communicates that knowledge throughout the organization.
Listening posts are established for all customer groups and segments with processes for collecting, analyzing, and sharing the information from those posts.
Follow-up with customers typically includes relationship and transaction surveys and frequently involves…
16May2011 | Steve George | 0 comments | ContinuedWhat 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…
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…
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…
18Apr2011 | Steve George | 0 comments | ContinuedBaldrige: 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 | ContinuedBaldrige Criteria: The Organizational Profile
Describe your organization in five pages. That’s the challenge when answering the 33 questions posed by the Organizational Profile in the Baldrige Criteria.
As the first part of the Criteria, the Profile provides a snapshot of your organization. It is divided into two items: the first asks about your organization’s key characteristics and the second addresses your strategic situation. Examiners do not score the Profile—your score is based on the seven Categories that follow—but that does not mean the Profile is less important. Examiners use it to figure out what your organization does, understand the nature of your competition and your strategic situation, and learn about your customers, employees, and suppliers. A strong Profile establishes the expectation that what follows will describe a well-run organization. A poor Profile predisposes the reader to expect average or worse processes and performance.
In a Pal’s Business Excellence Institute webinar this week (click here to view), Baldrige expert David McClaskey identified five keys to writing an effective Profile:
- Focus on the vital few most important parts of the Profile, which are the questions on your product and service offerings (P.1a1 in the Criteria), vision and mission (P.1a2), workforce profile (P.1a3), customers and stakeholders (P.1b2), competitive position (P.2a1), and…
Dangerous 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 | Continued
