Implementing real customer focus

Visible, long-term commitment from top management can help your organization implement and sustain real customer focus.

by Todd Youngblood

If you spent the next 10 years searching for an executive who thinks that customer focus is unimportant, I doubt you could find one. In fact, having a strong focus on customers is one of the few genuine, universal business truths. On the other hand, if you modified your search and looked for actual implementations of real customer focus by an entire organization, you might not find too many.

The fact is, for most companies, customer focus consists of slogans. Yes, the customer is king. And yes, passing out coffee mugs that exhort all employees to “Think Customer Service!” is a good idea. It just has to go further.

Real customer focus begins at the top. It can happen only with visible, obvious, relentless commitment by the CEO. Lip service won’t cut it. Only when the troops see the real thing from the boss does it become possible to ensure a disciplined obsession by each employee to deliver steadily increasing value to each customer.

Even an obsession is only the beginning. You must create a feedback loop to ensure that your staff always focuses on the right things. The next step is measuring performance against specific customer focus objectives, and then reporting that performance. Public reporting is key. Certainly, all internal personnel should see the reports. In addition, all key customer personnel should see them also.

You’re probably worse than you think
Data from a “Customer Focus Self-Assessment” conducted by The YPS Group illustrates why this measurement and reporting is so critical. The assessment consisted of 25 questions and, so far, 316 distribution industry executives have responded. On a scale of 1 to 100, both their average and median “Customer Focus Quick Index” was 54. In other words, most of them are average in their degree of customer focus.

The results are not surprising. By definition, most people and most companies are average. It might be hard to accept, but odds are that you, most of your employees and your company are average. (To be fair, so are most writers of customer focus articles.)  Don’t kid yourself.

A closer examination of the assessment numbers reveals even more interesting insights. Question No. 1 asks, “To what extent is your company customer focused?” The average answer yielded a score of 69. This “perceived” score was 28 percent higher than the “real” score. Fully 81 percent of the respondents thought they were doing better than they actually were.

Further, when the “real” scores are graphed, even they do not yield the expected bell curve. Everything is skewed to the right, which indicates respondents overrated themselves on the other 24 questions as well. Did I mention to be careful about kidding yourself? (Follow the “Customer Focus” link at www.ypsgroup.com to take the self-assessment yourself.)

Getting above average or excellent ratings regarding customer focus requires a formal model. A four-component approach consisting of customer feedback, operational processes, employee programs and customer service standards modules is shown at right.

The customer feedback module
The customer feedback module consists of discovering, confirming and acknowledging customer needs and perceptions, then prioritizing and weighting them as they change over time. Consider using the questions contained in the Customer Focus Quick Index discussed above as a starting point for specific feedback you want to collect. Use three to five questions to get started.

How you collect the feedback is also important. A formal survey is best, conducted annually. Since many customers will not take the time to complete a formal survey, you’ll need to use the “habitual ask and collect” approach. In other words, as your sales reps and other employees interact with customers, have them ask the questions, maybe only one at a time. Over the course of a year, you can get a fairly complete and accurate picture.

Another excellent — and shockingly rare — technique is a customer advisory council. The idea is to bring together decision-makers from eight to 12 accounts once or twice a year, preferably at some neutral site. By throwing yourself at the mercy of the court, you will get not only very frank and unvarnished feedback, but also some great ideas — direct from your customers — on how to get better. By the way, think how much this exercise will broaden and deepen your relationship with each member of this group.

Another seldom-used feedback mechanism is the loss review. Every lost deal and every lost customer should be dealt with as if it were a plane crash. What happened? When? Why? What did we do? What didn’t we do? What could we have done differently? What actions will we take to avoid this type of situation in the future?

There is no better way to identify the gaps and flaws in your sales and support strategies — and your products and services themselves — than to conduct a formal, face-to-face meeting and ask these questions of everyone who had anything to do with the account or opportunity. You might want to include the customer as well.

The operational process module
The operational process module consists of defining, continuously improving and executing business processes to ensure effective sales, delivery and support of products and services by customer segment. In other words, what do you do, how do you do it and how can you do it better/cheaper/ faster? Talking about it is not enough. Until you formally define and document a process, you cannot measure its efficiency or effectiveness.

You need to create and maintain a “process knowledge mine” containing cross-functional flow charts and written descriptions of each key subprocess and activity. In a nutshell, you must create a “process engineering” culture. (See www.ypsgroup.com/the_process_of_spe.htm for an example of how to engineer a continuously improving sales process.)

Customer segmentation is another critical aspect of this module. Not all customers were created equal. You simply cannot afford to treat them all alike. Your large, loyal, strategic, profitable customers have earned the right to better treatment. You must treat them better, or your competitors will.

Different companies segment their accounts and prospects by different classifications. These could include but are not limited to industry, size, sales growth rate, their growth rate, profitability, what they buy, past history, future potential, location and strategic importance.

It is also a good idea to ask your customers to classify themselves. That way you enlist their help in figuring out how they can move up in importance in your hierarchy. You’ll be surprised at how effectively this last practice fosters intercompany teamwork and makes customers more reasonable and less demanding.

The employee module
The employee module requires that you assign knowledgeable employees to the proper jobs and equip them with the appropriate tools. The best starting point is to establish profiles for each job and each employee. (The McQuaig Institute and Profiles International provide good tools, examples and details of how to do this.) 

The idea behind profiling is quite simple: match people with jobs they are most likely to enjoy and do well. Identifying the various profiles is much easier than making the required changes to align people with jobs. The second step almost always requires people to make changes (often, significant ones).

Treat employees like customers by surveying them annually. Unlike customers, they are typically quite willing and anxious to complete an employee opinion survey. Even so, it is still necessary to execute the “habitual ask and collect” practice to ensure a full understanding of their issues and concerns. As with customers, be prepared to respond to and act on what they tell you.

Employee training may well be the most neglected aspect of American business. The need for it is obvious; the rationalizations for delaying it are legion. Start with formally defining the eight to 10 key skills required for each job. Rank each employee on a 1 to 5 scale for each skill. Set and follow through with a very hard-nosed expectation that everybody is at least a “3” (i.e., average) at each of the key skills. This does not sound hard. It isn’t. Just do it.

Follow a similar approach with regard to work tools. Identify the tools required. Put tool acquisition high on the priority list. Be continuously on the lookout for new and additional tools.

Performance and development planning makes up the final aspect of the employee module. There are many systems available. The key is to choose one and then follow it religiously. Each employee must have a written, agreed-upon set of performance criteria. Conduct informal quarterly and formal written annual reviews of performance against the criteria. These reviews should include formal identification of development requirements along with a written plan, with deadlines, to address them.

The customer service standards module
The customer service standards module consists of defining customer service and quality standards, then measuring and reporting against them. Obviously, it’s critical to use information gathered in the customer feedback module. A few commonly used standards include overall satisfaction, responsiveness, price, innovation, productivity, delivery, quality and knowledge.

It is also important to define different standards for the different customer segments. Remember, not all customers were created equal.

Prepare reports on a monthly basis and distribute them to everyone. This includes not only those within your organization, but also key customer personnel. Even if the numbers are not that great, reporting your performance sends a powerful message about how committed you are to improving customer service and satisfaction. It is also a good idea to include trending information, graphs and action plans for improvement with these reports.

Getting started
The best way to kick off a real customer focus program is by conducting a formal assessment. This includes gathering the perspectives of three key groups: your customers, your managers and your employees. (Once again, the “Quick Index” self-assessment at www.ypsgroup.com could be useful as you prepare your surveys.) 

With that information in hand, you can perform a “gap analysis” to determine where and how the three constituencies agree and disagree. Identifying these gaps is equivalent to identifying the key areas needing improvement. To ensure objectivity, seriously consider using an outside consultant for this assessment and gap analysis.

The next step is to choose the members of your customer focus team(s) and conduct a planning session. The output of this effort should include a prioritized list of initiatives, well-defined objectives for each and detailed action plans with due dates and responsibilities.

Now comes the actual work. No magic here, just implement and execute the customer focus plan(s) like any other business plan. Announce the effort, both internally and to customers, and get busy.

To keep things on track, conduct weekly customer focus team meetings to review progress, identify issues and inhibitors and appropriately adjust plans. Most companies find that widely distributed monthly (or at least quarterly) progress reports are useful both in keeping the team on track and as a sales tool. A formal, semi-annual review by top management ensures continued and proper focus.

It sounds easy. Well, maybe not. But in reality it isn’t that hard, either. The keys are listening to the customer, continuously improving all of your business processes, profiling and training employees, and measuring and reporting to the world your performance against standards for each key customer segment.

With the visible, long-term commitment of top management, your organization can implement and sustain real customer focus.

This article originally appeared in the May/June 2003 issue of Progressive Distributor. Copyright 2003.

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