Excerpt – Business: The Ultimate Resource. Getting Close to the Customer

Getting Close to Your Customers: Being aware of your customers’ wants, as well as how they perceive your business, helps you sell them more of what they need. Learn how to go about gathering that information in this excerpt from Business: The Ultimate Resource.

Business: The Ultimate Resource
Introduction by Daniel Goleman
Published by Perseus Publishing
August 2002; 0-7382-0242-8

Getting Close to the Customer

Definition
Getting close to the customer involves gathering facts and knowledge about your customers (current and potential) in order to develop an awareness of what customers want from you and how they perceive your organization and its products or services. This awareness in turn enables you to continuously strive to meet your customers’ demands and secure your organization’s long-term survival and profitability.

Advantages
Being close to your customers allows you to:

• respond to changes in demand and in the market;
• act on facts instead of hunches or intuition;
• develop products or services better tailored to your target market;
• achieve improved sales and increased profits.

Disadvantages
The advantages of being close to your customers far outweigh any disadvantages, but you should take the following factors into account:

• The better you try to get to know customers, the more you risk intruding on their privacy.
• If you ask a customer to reveal personal or valuable information, you’ll probably have to offer a reward or benefit in return.
• Customers may resist telling you personal information and may not always tell the truth.
• Surveys and research can be costly and time-consuming.

Action Checklist

1. Examine Your Organizational Culture
You are unlikely to get close to your customers unless the culture of your organization encourages such a relationship. Staff should be trained to think “customer first” — those who are not customer-focused can jeopardize the success of the organization by making inappropriate decisions, failing to respond to changing situations appropriately or quickly enough, or neglecting to serve customers in a way that promotes their loyalty.

If the culture in your organization does not support a customer-focused approach, implement a program of long-term culture change.

Remember that every section of your organization has customers. Staff in direct contact with external customers cannot provide effective service without the internal support of colleagues all along the chain. To encourage internal service departments to adopt an outward-looking customer focus, their operators might work for a week or two in the department they service.

Customer focus needs to pervade every level of the organization. How often do your key decision-makers and strategy formulators deal face to face with customers? A period on the front line would increase their awareness.

2. Identify Your Customers
Your customers are those who use the output of your work. They may be internal to your organization (for example, your personnel function has all employees as its customers) or external (members of the public, other businesses, or government or public bodies). In identifying customers, distinguish between purchasers, those who pay for your product (for example, the parent who buys the toy), and end users, those who actually use it (the child).

You will probably wish to compile a database of your customers so you can profile your customer base.

3. Profile Your Customers
A wide range of factors influences customer behavior and choices, for example:

• gender — particularly where the purchaser or end user is not the sole decision maker;
• age — different age ranges being more susceptible to targeting by some products than others;
• marital status — especially combined with other factors such as children and disposable income;
• home ownership — indicating specific needs and responsibilities that relate to buying patterns;
• location — urban consumers differing from rural ones, and regions differing culturally and economically;
• lifestyle — since all customers have individual activities, interests, and opinions.

These factors become more useful when they are analyzed in combination — for example, home ownership, age, and number of dependent children can indicate the likely amount of a customer’s disposable income.

Decide how to approach your customers to find out their basic characteristics. It may not be possible to ask every customer individually, but other fruitful approaches exist, for example:

• market research
• questionnaires
• user- or focus–group discussions
• customer audits
• attitude surveys

Take advantage of opportunities to meet business customers at their premises or at yours in a series of open houses or customer care programs or through membership of user groups, industry liaison meetings, or partnerships arising out of new product development.

4. Assess Your Customers’ Opinions and Attitudes
Organizations with an inaccurate perception of their customers’ needs most likely:

• make untested and unwarranted assumptions about what
• customers think;
• rely on weak anecdotal evidence;
• accord too much weight to atypical complaints.

If you don’t make the effort to find out what your customers think, you can be caught off balance when they go elsewhere. If you don’t know why they are going elsewhere, you can’t identify corrective actions. Besides factual information about your customers, find out:

• why customers buy your product or use your service;
• how they use it;
• what their opinion is of your product or service;
• why they choose your offering over the competition;
• what their experience is of your product or service in terms of performance and after-sales care.

Attitudes and opinions are hard to quantify, and many factors influence a decision to purchase or to remain loyal to a particular brand. Customers may be influenced as much or more by their impressions of service — courtesy, promptness, etc.– as by the quality of a product. Exploring these issues requires detailed research, and if you do not have adequate in-house expertise you may wish to use an external research agency.

Be sure to listen to your frontline staff, who are on the end of firsthand comments from customers about their satisfaction and dissatisfaction. Consider setting up a procedure for reporting this information.

Channels usually employed for customer service can also be used to solicit customers’ opinions by an open dialog that is meaningful to the customer. Such channels include customer charters, warranties, statements (and monitoring) of performance standards, open and willing acceptance of penalties for noncompliance, and refunds in cases of nonsatisfaction.

5. Act on Your Findings
Analyze the results of your research, interpret the data, and publicize your findings. Use your findings to identify where you need to take action to maintain your competitive advantage. Involve all staff in this process; encourage everyone to think “customer first.”

Paying attention to your customers’ needs is an ongoing process. Consider setting up a regular research project, introducing methods of soliciting customers’ suggestions and creating response mechanisms, or initiating procedures that constantly monitor your market.

6. Consider Using the Internet to Improve Customer Focus
The Internet is increasingly being used by customers to select items for purchase, specify designs, and submit comments and suggestions on products and services. Used judiciously, the Web permits an organization to get closer to its customers than ever before.

7. Give Feedback to Customers
Let your customers know that you value their needs and their ideas. This may mean publishing a revised mission statement reiterating your commitment to fulfilling their needs, or publicizing survey results and details of new products or product amendments made as a result of the research.

Feedback is not a onetime event. It needs to be a continuous process that informs customers of your organization’s response to suggestions, mistakes, and new ideas and that encourages further dialog.

Dos and Don’ts For Getting Close to the Customer

Do

• Think of ways to reward customers for sharing their likes and dislikes.
• Make sure your organizational culture encourages staff to think “customer first.”
• Integrate customer focus with other business activities — it should be a cross-departmental, cross-functional initiative.

Don’t

• Don’t make assumptions about what people think without testing them.
• Don’t rely on data from too small a sample of customers.
• Don’t react too hastily to vociferous complainers — see whether other customers feel the same way.

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 From Business: The Ultimate Resource Copyright 2002 – Bloomsbury Publishing Plc. All Rights Reserved. This [excerpt] may not be reproduced, copied or distributed in whole or in part, in any manner, or by any means, without the prior written permission of Perseus Publishing, Cambridge, MA.