Deep Customer Understanding - Do You Really Know Them?

tophdimgs.com

Customers can be hostile antagonists or a strenuous protagonists. They love you when they love you but can turn venomous when feel mistreated. Partnering with customers is an important mindset to assume, but partnering comes from the basis of mutual power and mutual respect. Similar to the adage “peace through strength”, companies need to find their own strength in the relationship in order to create a partnership environment with core customers. This "strength" comes from knowing your customer better than they know themselves.

Depending on the history of your business, strength starts with aligning your performance to customer needs such as delivery, quality, cost downs, and innovation. Too many companies either don’t measure their performance as seen through the eyes of the customer, or they only measure quality and delivery – Core Performance.

Core Performance is simply the entry fee for maintaining business with customers where overall supplier performance has become, more and more, the focus. It is amazing how many suppliers fail at this basic requirement and even more amazing that certain customers allow the supplier to remain in the supply base. In industries that have smaller and more regional suppliers, being patient with suppliers is a requirement. Today’s dog supplier may become tomorrow’s god supplier. Supply Chain Leaders with this mindset will be more successful than the traditional rigid ones. Even in sophisticated, well supplied industries, such as the automotive supplier group, customers must have the long view to create and nurture up-and-coming suppliers to keep competitiveness alive.

Establishing stability in the operational performance to meet this Core Performance requirement takes time and systems. Stability of machine, man, method, and materials usually takes more time than possibly the patience quotient of demanding customers.  While Lean activities help resolve Core Performance issues, more is needed to stabilize and enhance customer relationships.

The entire organization needs to be tuned-in to customers at all levels. The ‘call to action’ is to build a system that drives the voice of the customer into the fabric of your operating model to transform customer perceptions, company performance, and company culture – all oriented to serving ALL the needs of each customer.

What your company needs is a way to measure several dimensions of customer perception and hold honest and meaningful problem solving activities to change and improve perceptions. These dimensions may have some similarities among companies like quality and delivery, but other dimensions should be tailored to your unique business and your strategy. Expanding your customer insights through measuring important dimensions of your relationship can be a game changer in building new business at better profitability.

Some examples of these dimensions:

• Launch: Behind quality and delivery, customers arguably would rank effective launch as the most important element of a supplier. Disrupting a new product introduction due to mismanagement of your value stream is a major impact. How do you measure your launch effectiveness? How transparent are your customers’ insights into your system to observe the launch? Measure and enhance this dimension. Do you measure launch PPM?
• Pricing: Is your customer satisfied with your pricing? Even though they may have accepted it “for now,” a long term dissatisfaction with pricing will lead to business losses. What are you doing to bring new value or reduce cost to provide deeper satisfaction on this core dimension?
• Internal Cost: Are your costs in line with what your quote provided? Just as important to customer pricing satisfaction, shareholder dissatisfaction with your current state of costs, especially in launch can create rifts between customer and the company. Relentless focus on getting your costs in line is a never-ending pursuit, but hitting your baseline is a shareholder expectation.
• Organizational Alignment: Is your entire organization aligned with your customer organization? Do you strategically measure relationships from sales through operations through executives? Deep Customer Understanding (DCU) comes from deliberate relationship building at all levels. Sales training for non-sales professionals for effective customer communications techniques is critical for effective relationship building. Finding methods to share the voice of the customer through these levels, provides a stop to surprises in customer satisfaction. If the only relationship is between a sales person on the purchasing person, you risk surprises and business losses. Be strategic and create expectations for all customer interaction associates. Use Social Media to build your connections to key executives in all aspects of the business. A “strategic customer road-map” identifying target relationships across all dimensions of the business is needed.
• RFQ: Are we getting new opportunities for quoting new business? If we aren’t, why not and what does this mean about our long term relationship?

Status and Trends of DCU Scorecard System:
Use mechanisms to capture all the dimensions through visual standards. In the matrix concept here, stars and circles with colors provide a quick glance at current status and the current trend in that status. Nothing stays the same and customer perceptions are constantly changing. Your ability to respond quickly and effectively will put you much further ahead of your competition.

Candid Accountability:
Lastly, you need to create a safe forum for all your associates to share what they have learned from their interactions with customers. These interaction points should be cross functional and help at least monthly to stay on the pulse of the customer.

Big surprises in customer relationships rarely happen all-of-a-sudden. Usually it starts small and gains momentum. The momentum is usually borne and engendered in lack of customer interaction and responsiveness. Use the forums for these open discussions to air issues and solve problems bringing the force of the organization around prioritization and problem solving.

A side benefit from using this DCU approach is in getting important POSITIVE news from customers. These positive comments from critical customers should be shared with all your company associates providing further “reasons to believe” in the business.

Take action now! Convert your company's focus into a DCU Organization. Deep Customer Understanding is a key dimension to gaining a competitive advantage