MarketIntellibitsTM                    
February 28,  2006
Volume II   Issue 4

How’s your Focus?
by Jack Miller


Today’s cameras are quite sophisticated.  You can set your camera on
automatic, point and shoot, and get pretty good results. Somehow the
camera sets the exposure and focus. It focuses on what is in the center of
the picture, so if what you’re really interested in is not exactly in the center,
it might be out of focus.

Is your business on “automatic”? Are “pretty good results” what you’re
getting?  Is that good enough?  What’s in the center of your picture? Is your
business out of focus?

Recently, someone asked me this question: “Just about all companies  says
that they’re customer focused, but how can you tell who really means it?”

To stretch our analogy with the camera, he was asking how you can tell if
the customer is in the center of the picture, that is, if a company is customer
centric.

Why does it matter? Customer centricty leads to customer satisfaction, and
that leads to loyalty. And customer loyalty leads to profitability. Studies have
shown that high customer  retention correlates with higher than average
profitability. The obvious  explanation for this is that if you’re losing
customers, you’re losing business. The less obvious explanation is that it
costs less to keep a customer than it does to get a new one.  

As my friend said, most companies claim to be customer centric.  However,
a lot of sales people might claim the opposite, citing non-competitive prices,
inadequate service, and quality problems. Their managers might disagree
and  argue that the company really is very competitive, but the sales people
don’t know how to sell. So how can you get the real answer?

I’ve  seen tests that companies can take to find out if they are customer
centric, and these tests  talk about how often senior management sees
customers, or how much authority the head of customer service has.
Interesting, but this sort of thing hardly tells the whole story.

I’ve also read anecdotes about whether employees are able to look at things
from the customer’s point of view, or whether they look at it from their own
point of view or the company’s  point of view. This is even more interesting,
and reminds me of a recent experience I had in a supermarket when the cut
of meat I wanted was not available. There was a butcher window, but there
was no one there. I finally got the attention of someone working in the back,
but he gave me the feeling that I was interrupting him, that he had a job to
do, and here I was, interfering with his work. “The butcher is on break,” he
said. “You’ll have to come back.” “I’m not going to come back,” I muttered
as I stormed off. Are all employees trained to look at things from the
customer’s point of view?

Again, these things are interesting but only a start. You also need to
measure customer satisfaction. We’ve talked about customer satisfaction
before (
http://www.mktintell.com/Oct312005.html), but suffice it to say that
measuring customer satisfaction is not as simple as finding out if customers
are satisfied. You also need to understand why they are or are not satisfied,  
how you stand versus the competition, and what you need to improve.  This
can be done through properly designed market research.

And then you need to measure loyalty and retention. Do you measure
customer retention? And how do you define “the customer”? You sell paper
to a merchant, and the merchant sells paper to a printer. You can probably  
measure retention at the merchant level, but what about the printer level?
How about individual jobs? How about individual merchant reps? And how
do you compare with the competition?

Your own data is probably not sufficient, but  loyalty can also be measured
through market research which probes attitudes re loyalty and intentions
regarding repurchase.

So, my friend asked a simple question, and an important one, but one which
many companies cannot answer either for themselves or their competition.

For more on this topic,  click:
http://www.mktintell.com/Mar152005.html, or
simply Google “customer focus” and “customer centric”.

Better yet, make it easy on yourself, and just call Jack Miller at 203 925 0326,
or email Jack Miller at
jack.miller@market-intell.com



About Jack Miller                                       Email Jack Miller

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