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Are You Properly Utilizing Your Company's Most Valuable Resource (Your Customers)?

Posted February 15, 2012 8:30 AM by rwalke8

Editor's Note: CR4 would like to thank Roger Walker of GEA Consulting for contributing this blog entry.

Typically good companies:

  • Say that they care about their customers, asking customers their opinion about their direction on current and on new or improved products.
  • Conduct customer satisfaction surveys and compile reports on the results.
  • Endeavor to resolve customer complaints as quickly and completely as possible.
  • Make customer satisfaction is a high priority.

What is wrong with this picture? It appears that you are doing all of the right things to keep your customers satisfied with your products and services.

The fact is that you can achieve 100% customer satisfaction and still have customers defect! The realistic definition of a satisfied customer is one who is satisfied with the product, price and service they receive and who will keep buying from you until something better comes along! All of a sudden, having a satisfied customer doesn't sound as secure as we once thought. What we are really seeking are "loyal" customers.

We can identify loyal customers as those who:

  1. Prefer to do business with you because of your ability to meet their unique needs better than anyone else and are willing to give you a large share of their business.
  2. Will give you a chance to correct a mistake because they trust you will do the right thing and they don't want to change from one who is perceived as a partner in their business
  3. And will actually recommend you to other customers

While the process of developing loyal customers and fully utilizing them as a valuable resource requires a change in perspective and processes, we can summarize the right approach as follows:

  1. Avoid listening to your customers on your personal radio station W.I.I.F.M. (What's In It For Me) which most companies do. Tune in to the customer's broadcast. Don't look for what you can get out of the relationship; rather learn what is important to them and what would make them very happy with the product, features and services you provide such that they prefer to do business with your company.
  2. Take time to learn more about your customer's business, their drivers, challenges, etc. so you can better understand why they use your product - for their reasons. Develop a new perspective on their needs so you can identify what you can do differently to improve the value you can deliver.
  3. Annually validate your relationships with your top customers, those 20% that provide 80% of your business. This goes beyond a satisfaction survey and involves discussing the details of why they do business with you, what they like about doing business with you and what they don't like about doing business with you. Also, take time to find out what they would like to do differently in working with you going forward. Getting the real answers to these questions will take some time and talent, as we have conditioned customers to think of us in the very narrow band of "product supplier" versus a potential partner who can help them resolve persistent problems and/or improve their profitability.

While these steps may sound like an obvious and subtle difference, few companies are able to implement a process to develop "loyal" customers. "People like doing business with people they trust." In addition to the above benefits delivered by loyal customers, they will also bring new opportunities to your firm to help them meet their needs in potentially new areas of business. And what you learn can greatly improve your products and services, create a competitive advantage with them and other customers, and could even foster the development of new, expanded products and services.

In reality, loyal customers are a company's most valuable resource.

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Guru

Join Date: Dec 2007
Location: Mumbai, India
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Good Answers: 25
#1

Re: Are You Properly Utilizing Your Company's Most Valuable Resource (Your Customers)?

02/16/2012 7:07 AM

Around 20 years back before I retired from an Indo German Material handling co., we had built a system under CRM. It was "Customer complaint cell" which included persons from sales/service, quality control,design and production dept.

All customer complaints and feed backs were fed in computer. Nature of complaints were codified, every month summary was made indicating model wise and component wise complaints. This statement was sent to Mg.Director. Ever month "Customer Complaints Meeting" was held under Quality Circle and repeatetive complaints were discussed.

Various options were discussed, even change in design of the components or change of supplier was discussed.Finally decisions were arrived after various trials and customers were informed accordingly. This helped us in enhancing quality of our products and retention of our customers.

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"Engineers should not look for jobs but should create jobs for others" by Dr.Radhakrishnan Ex President of India during my college graduation day
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#2
In reply to #1

Re: Are You Properly Utilizing Your Company's Most Valuable Resource (Your Customers)?

02/16/2012 9:54 AM

Your description of a "Customer Complaint Cell" is an excellent effort to achieve customer satisfaction and to benefit from customer input. However, it was too narrowly focused and was also unidirectional. By that I mean it was all about your products and driven from the customer to your company. While this will produce good results it will not produce loyal customers. The next step is to go beyond such a good system, to getting in the business heads of your top customers by visiting them to tour their facilities and to learn more about their products, needs, drivers, problems, etc. You need to see what else you may be able to do to help them, that goes beyond the current products or services you provide. Take the time to get into their shoes and you will be more effective and appreciated than you could with the good system you described. Be proud of what you have done, but we can stop there. Best of luck and happiness in your retirement and thank you for your comment.

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Guru

Join Date: Dec 2007
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#5
In reply to #1

Re: Are You Properly Utilizing Your Company's Most Valuable Resource (Your Customers)?

02/17/2012 7:06 AM

Thanks for your comments Sir. After my retirement I am now living and watching scenario like a "Night Owl".

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"Engineers should not look for jobs but should create jobs for others" by Dr.Radhakrishnan Ex President of India during my college graduation day
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#3

Re: Are You Properly Utilizing Your Company's Most Valuable Resource (Your Customers)?

02/16/2012 11:58 AM

One thing to remember is that we don't operate business in a static environment and that we need to be continually evaluating how we operate. What worked great six months ago may no longer be relevant to today.

The Plan, Do, Check, Adjust process (Launching A Leadership Revolution, Orrin Woodward, Chris Brady) needs to be ever present in order to meet the needs, wants and desires of the customer.

In order for a customer to "feel" their needs are being met is critical. I use the word "feel" because perception is reality. One of the ways you help customers "feel" they are cared about and their needs being met is through relationships; with sales, installers/delivery, service and accounting. I know of a large national elevator company who "didn't think that relationships were all that important" and let some people go who had a good amount of tenure with the company. They birthed new competition businesses that do see the value of relationship, and are subsequently losing a lot of business.

When people feel like they are being heard, cared about, needs met, for high value, etc. they will be "sticky/loyal". People want to feel like they are also part of something significant. There are some companies like Harley Davidson, John Deere, Apple, etc. that have accomplished that. There are other products that can provide equal/similar results for less money, but people are loyal to these companies and others like them. Those "sticky" customers also buy related items that aren't really necessary to their original purchase. Branding is hugely important. Customers who will return regularly are cheaper to retain than getting new customers.

Michael Dell spoke at a Detroit Business Seminar a few years ago and he said that between Content (products, website, advertising), Commerce (pricing, distribution) and Community (customers), the Community is the most critical aspect of business. If we can figure out how to attract, serve and keep the customer on a repeated basis over a long period of time the business will have a much better chance of thriving.

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One of the greatest discoveries a man makes, one of his great surprises, is to find he can do what he was afraid he couldn't do. Ford, Henry
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#4
In reply to #3

Re: Are You Properly Utilizing Your Company's Most Valuable Resource (Your Customers)?

02/16/2012 12:29 PM

I certainly agree with your comments. It takes acceptance from the top of the organization to invest in developing "sticky/loyal" customers. In all cases, the upfront cost to create the value needed is more than offset by increased business, problems avoided, customer retention and even happier employees. There needs to be a process that can be implemented and duplicated that facilitates such "sticky/loyal" relationships. The "Customer Development Process" needs to be integrated in all areas of a company to be effective and supported by a good and well utilized CRM system. It can and does work!

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