“You achieve customer satisfaction when you sell merchandise that doesn’t come back to a customer that does.” — Stanley Marcus, Chairman Emeritus of Niemann Marcus Co.
From over two decades of work with hundreds of organizations, we have found that customer and partner focus can be boiled down to three broad steps:
1. Identify Current Customers and Partners
This is clearly the starting point. But is takes a lot more thought and discussion then most management teams realize. We need to identify the various end users or customer segments we choose to serve. In today’s fast moving world, we can’t be everything to everybody. Segmenting our markets and customers is critical. We might divide them by demographics such as size, age groups, geography, income levels, buying patterns, frequency of doing business, and so on.
However, few organizations have also looked at their customers from a psychographics perspective. These are the values and attitudes that define our customers’ organization culture or personality type. This type of segmentation or analysis is especially useful in developing a composite profile of ideal customer segments. Not all customers are equal. Some are more profitable, easier to serve, better fit to our organization’s unique strengths, or are just more enjoyable to do business with. These are important considerations in deciding whom to target our customer acquisition and retention efforts toward.
2. Prioritize Expectations
In Top Performance, Zig Ziglar tells of an elderly couple celebrating their fiftieth wedding anniversary. After a long day of celebration and honors, they prepare to retire for the night. As they’ve always done, the husband prepared their bedtime snack of buttered toast, jam, and milk. When his wife sat down to the snack in front of her, she burst into tears. Concerned, her husband went to her, embraced her and asked what was wrong. She tearfully replied that after such a special day she hoped that he would have finally stopped giving her the end piece of bread. Shocked and surprised her husband replied, “But after all these years I thought you knew that I think that’s the best piece of all.”
So often the priorities we assume others have are projections of our own values and preferences. That can be deadly. We need to go beyond The Golden Rule. Instead, we need to serve people the way they — not we — want to be served. There might be a big difference. Since we’re seeing customer and partner expectations from inside our organization or management team, we can’t possibly have the same perspective as they do.
However detailed or complex we ultimately make it, there are four basics for uncovering and prioritizing expectations:
- Getting customers or partners together in focus groups is generally the most productive. But we can gather expectations through individual interviews as well.
- We can gather perceptions and expectations from competitors’ customers, people who’ve stopped doing business with us, and those who could but don’t use our products or services now.
- We should always start with a blank sheet of paper, never a preconceived list. This begins by asking our focus group to brainstorm the factors most important to them when using our products or services.
- Once we have a complete list, we need to get our focus group to rank or weight all the factors on the list. Generally about twenty percent of the service/quality features or services contribute up to eighty percent of the perceptions of good or bad service or quality (The Pareto Principle or 80/20 Rule).
3. Gap Analysis
The point of all your customer and partner research is to pinpoint and target areas for improvement. In step two, we learned what our current customers and partners, as well as the broader market consider to be the most important product, service, and support factors. Now we want to analyze and assess the gaps between their expectations and our performance. With these targets, we can aim our improvement efforts much more accurately to close the performance gaps. They also provide the basis for benchmarking our performance against other highly effective teams or organizations.
Performance gap analysis can be as narrow and as simple as the difference between the top priorities of a particular customer or partner and how well they perceive we are delivering on their preferences. Or they can be as broad as an entire market including our competitors’ customers and people who don’t use our type of products or services — yet.