Pathways — Volume 13, Number 1 — May 2001

 

Focus — The Loss of Customer Focus

 

For many years, most organizations have been committed to creating and delivering products and services that meet (or exceed) their customers’ needs.  Customer feedback is almost immediate in some industries.  For example, the fast food industry and the movie industry have monitoring systems in place that alert them quickly if revenue targets are being reached and when alternative strategies must be deployed.  These organizations learn immediately when they have satisfied their customers and when they have not satisfied them. 

 

Unfortunately, in some organizations the concept of customer first, customer-centric, and “the customer is always right” seems to have disappeared or at least lost its importance.  Some of these organizations are retrenching into more organization-centered patterns even when the consequences are staff who are unprepared to meet customer needs, competition that is taking away their customers, and customer satisfaction ratings that are reaching all time lows.

 

The trade journals are beginning to recognize and comment on this phenomenon.  They have alerted their subscribers to the problem.  Yet company after company continues to cut costs by cutting back on the number and quality of customer service personnel.  This often happens by organizations consolidating call centers (or the like) which can cause customers to have longer wait times to get answers to their questions or to have their problems addressed.  Few companies feel a need to change their basic view of being customer-oriented.  They have forgotten or do not realize that being customer-oriented is an organizational imperative.  Funds expended on it are not just an operating expense.  Instead, these funds represent an investment in the future of the business as a whole.

 

What has generated this retrenchment?  Is it that we have:

 

       Forgotten the primary reason that organizations exist — our customers?

       So much business that customers must just take their turn and wait?

       Come to view our customers as a “captive audience”?

       Allowed the rapid pace of change to drive the organization’s unsatisfactory response to satisfying customer wants and needs?

       Focused on short-term profitability rather than long-term success?

 

Different industries have different reasons for such behaviors but this trend is not positive in any circumstance.  In our At Issue section, we share a few thoughts about how to rejuvenate our organizations to regain an appropriate customer-oriented focus.

John C. Wills
President/CEO


At Issue — Regaining a Customer-Oriented Focus

 

There are two rules in successful organizations:

 

Rule One:            The customer is always right.

Rule Two:            If in doubt, reread rule number one.

 

Most organizations accept these rules.  They realize that failure to remain customer-oriented is not an option.  But, for a variety of reasons, organizations and their people need to remind themselves of these rules regularly.  Given the recent volume of articles in business journals and the press on this topic, now might be a good time to verify and communicate your own organization’s commitment to being customer-oriented.

 

What is needed for organizations to be customer-oriented?

 

1.     Determine what business(es) you want to be in.

2.     Identify the wants and needs of your targeted customers.

3.     Deliver products and services that exceed your customers’ expectations.

4.     Deliver outstanding customer service at all stages of contact with the customer.

 

This sounds simple.  It would seem that almost anyone could achieve success with such a simple model.  Then why do we see so many organizations failing to maintain successful customer-oriented initiatives?  Let’s look at a few examples:

Examples of Dissatisfied Customers

 

Health Maintenance Organizations (HMOs)

These organizations are the brunt of scorn, jokes, legislation, and even hate.  But why?  Everyone seems to have his or her own list of complaints and terrifying anecdotes.  Our analysis indicates that most of these complaints are due to the fact that these organizations have not been acting in a customer-oriented manner.  They tell their customers when, where, and how to receive their medical care … and sometimes even tell them that they can not have the care their physicians determine that they need.

Retail Internet Sites

New organizations started with great ideas and even established customer-oriented Web sites that entertained the idea of a simplified way of doing business.  These Web sites were particularly useful during the product identification and selection processes.  Unfortunately, other aspects of the customer experience, such as the fulfillment process, were not as well thought out.  The result is unhappy customers who order products but do not receive them on time and/or cannot get anyone at the organization to answer their questions by email or phone.

Airlines

Long lines, late flights, cancelled flights, misinformation, lost baggage, etc. … the list of irritations seems to go on indefinitely.  How did an industry that we all have become so dependent upon become so insensitive to its customers?  Or have they just decided that they have a captive audience and/or that they have so much business that they can just ignore their customers?  Or have the airlines decided to be sensitive only to their “first class” and “business class” customers?  

Hotels

My room is too hot, my bed is too short, my room smells of smoke, etc. What choices do we have anymore?  Even with affinity programs that encourage travelers to use the same hotels and hotel chains over and over again, why can't they get the reservation right and the room configuration matched to the customer’s profile?

Equipment suppliers

Where is my system?  Why won’t it work?  What do I need to do to get it working?  The questions never stop, but the answers are so hard to secure.  After waiting for what seems like hours on “help” lines, we talk with people who lack the capability to address even our most basic needs.  What they give us is a headache and a case number.  That case number allows us to escalate the issue to another person who seldom understands the problem and then to another and another and ….  We are so relieved when we finally get our equipment to perform properly we vow to never go through that process again … at least not with the same supplier.

Others

Write your own list here.  Everyone has too much to complain about these days.  It has become the exception rather than the rule that the customer feels their expectations are being met, much less exceeded.

 

As customers ourselves, we have all experienced many of these disturbing situations.  We are continually on the receiving end of organizations whose customer support personnel are not demonstrating customer-oriented behavior.  But does it apply to our own organizations?

 

What are our customers saying about our organizations and what can we do to improve their attitudes about us?  Do we really wish to be seen by our customers in the ways described?  How can we make sure that our customers do not view us as the enemy?  Or, if they do see us as the enemy how can we change their perception of how our organization is dealing with them and get them to value our customer/supplier relationship?

 


An Action Plan to Become Customer-Oriented

 

We recommend a coordinated plan for positioning (or repositioning) your organization as customer-oriented:

 

1.     Establish your strategy

Define the ideal customer-oriented strategy for your organization

2.     Establish measures

Identify measures that will signify progress toward goals

3.     Assess current position

Find out how your customers currently view you

4.     Identify gaps

Identify differences between strategy and current position

5.     Identify projects

Develop programs to achieve customer oriented strategy

6.     Implement the initiative

Execute the projects, measure results, and adjust approach as needed

Let's look at each of these in detail:

Establish Your Strategy

We have talked about various reasons for establishing a customer-oriented strategy.  To be successful this strategy must be a shared strategy throughout the entire organization.  This means developing it, communicating it top-to-bottom, and requiring top management to provide unbending leadership.  In fact, at every opportunity top management must continue to reinforce the importance of the initiative and establish this strategy as key to the future success of the business as a whole.

Establish Measures

Define the success factors and key measures that will help tell you whether you are reaching your goals.  Remember that customers verbalize satisfaction only occasionally.  Instead, they express their satisfaction in the form of referrals and repeat business, which are excellent positive measures.  Dissatisfaction can be difficult to detect unless you are reading between the lines and monitoring dissatisfaction measures such as cancelled orders, complaint calls, employee turnover, hostile web sites, and the like.  Reductions in these dissatisfaction measures can be indicators of improving customer relations.  Look for both leading indicators (for example, decreased customer complaints and improved employee moral) and lagging indicators (such as increased revenue and increased customer satisfaction ratings) that will help you throughout the implementation of the strategy. 


Assess Current Position

Use your measures to carry out a thorough assessment of the current perceptions of your customers and prospects.  Then establish measurement baseline statistics.  Carefully select the people who are conducting this assessment to make sure they do not filter the results because they are afraid that the truth might make them look bad or because they are not interested in seeing the strategy succeed.

Identify Gaps

Systematically determine what is of greatest concern to your customers and what you as an organization can (and are willing) to do about it.  Typically you might see such gaps as these:

 

       Processes are not aligned to provide appropriate levels of customer service.

       Processes are not designed to “recover” when customer problems are missed or human error results in an unhappy, and soon to be former customer.

       Customer contact personnel are unclear on the organization’s expectations for providing appropriate levels of customer service.

       Customer contact personnel lack the knowledge and skills to adequately answer the customer’s questions or meet their needs.

       Organizational reward systems do not adequately differentiate between the customer contact personnel that provide excellent customer service and those that do not.

       Adequate tools do not exist to support personnel tasked with customer interface.

Identify Projects

Each gap might require some action by the organization to achieve your strategy.  Typically, the organization defines a series of projects that will become the backbone of its implementation effort.  These projects are normally a combination of projects that impact customers and employees directly and indirectly.  For customers it might involve targeted contact, new support efforts, and advertising, to mention just a few.  For employees it might involve new reward systems, training, mentoring, and improved feedback systems, also mentioning just a few.

Implement the Initiative

Implementation is more than just executing the projects.  Obviously, the projects must be successfully completed.  Then progress toward the goal must be measured by watching both leading and lagging measures.  Schedule regular reviews to ensure that adjustments can be made throughout the implementation to maximize results.

 


Being customer-oriented and staying customer-oriented is challenging but it delivers a big payoff to organizations that maintain the required commitment:

 

1.     Improved customer satisfaction results in lower customer support costs.

2.     Loyal customers lead to increased repeat business which means more revenue.

3.     Delighted customers provide referrals that lead to new business with lower sales costs.

 

The challenge of being customer-oriented is great but the cost of failure is too high.  Organizations need to make every possible effort to establish customer satisfaction as a key organizational goal.  They need to implement their initiative to be customer-oriented over and over again as long as the organization is viable.

 

John C. Wills
President/CEO

 

 

 

 

Quote:

 

Being customer-oriented delivers a big payoff to organizations that maintain the required commitment.