Listening to Your Customers

By George F. Brown Jr.

Successful business strategies build upon shared successes. When your strategy creates value for your customers, your firm also gains value.

Photo by Carl Dwyer | sxc.hu

One tool critical to such strategies is customer-based insight. Many businesses have some kind of Voice of the Customer program to gather insight from customers. There are three primary goals for such a program:

Gain customer input.

Learn the customer’s perspective on the future business environment and their most pressing needs. This brings insights about product innovation, critical services, trends, and more. These insights can help you get ahead of opportunities and strengthen your value. The key is to keep looking forward, rather than focusing on past performance.

We’ve all had “Duh!” moments—when an insight that should have been obvious was overlooked. One of my Duh! moments (and I admit to many) occurred in a company I was running some time ago, when we faced major challenges keeping up as our customers expanded globally. The Duh! moment came when a colleague asked, “Have we ever asked our customers about their expansion plans?” We started to do so, and the problem never resurfaced.

Effective listening doesn’t stop with direct customers. It’s necessary to listen to all of their customers. Pay attention to the entire customer chain: the path that leads from your customers all the way to the final users of their products. Perspectives vary at each stage, with implications that ripple backwards and forwards. Remarkable insights can be gained simply by asking customers at each stage what they would like to know about the other stages.

Learn what makes a best-in-class supplier.

Identify the metrics customers use to evaluate their suppliers, then develop internal action plans to meet those targets. Blue Canyon Partners identified three clusters where such metrics are concentrated: relationships between suppliers and customers, the suppliers’ ability to meet customers’ expectations, and suppliers’ ability to deliver high-value innovations.

Two things make this a challenge: First, while the three metrics clusters almost always apply, actions to be implemented differ from one customer to the next. Customize your program to gain insights about individual customers. Amalgamated data can yield an outcome that is right on average, but missing the mark with each individual customer.

Second, it takes insights from many people to get an overall picture. A customer’s perspective is shaped by the experiences of many people: designers, engineers, salespeople, and so on. Rarely does any individual know all the details relevant to every dimension of the supplier’s relationship with their company. It takes a lot of listening to understand what matters to a major customer, but that effort is required if a solid portrait is to be developed.

Fix what’s important to the customer.

Too often, this is the only goal addressed by the Voice of the Customer program. It is important, but is third in terms of long-term impact. It requires focusing on what can be improved along all the dimensions of customer interaction. There are three keys to doing this without focusing on the past:

First, topics should only be brought up after discussions about the future environment and the characteristics of best-in-class suppliers have been completed.

Second, distinguish between generic wishes for “better” and situations in which current performance is bad compared to competitors or a meaningful benchmark.

Third, learn whether customers will reward a supplier for improvements in metrics where they say they want “better.”

Select a few targets in which to invest management attention. Narrow the focus to action plans where improvement will provide a payoff. Learn what the customer would do differently if a certain change were made. If the answer is “nothing,” then the change should be reconsidered. On the other hand, if the customer can explain with clarity how the change would leave them better off, then the change has the potential to create value for both firms.

George F. Brown Jr., along with Atlee Valentine Pope, is the co-author of CoDestiny: Overcome Your Growth Challenges by Helping Your Customers Overcome Theirs, published by Greenleaf Book Group Press. Brown is also CEO and co-founder of Blue Canyon Partners Inc., a strategy consulting firm.

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