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Customer focus refers to an organization’s orientation toward satisfying actual and prospective
customers’ needs
It help us to
Acquire customers.
Retain and develop customers.
Reduce costs.
Technology. Rapid diffusion makes it easy for rivals to quickly copy product and service
innovations.
Globalization. Global presence wipes out geographic advantages
Consumer power. Consumers have access to vast amounts of information about companies,
their offerings and prices, and their competitors. To remain viable in this environment, many
businesses end up offering steep discounts, only to be undercut by someone offering lower
prices—or even free products or services.
Intangibles. Customers often base their purchase decisions on intangible qualities, including a
company’s trustworthiness, values, service quality, reputation, and reliability.
Today’s Questions:
What is a customer?
Consumers. For business-to-consumer (B2C) companies, customers are individuals who buy
products or services.
Organizations. For business-to-business (B2B) companies, customers are other organizations.
Internal customers. These are individuals and groups that are served by other individuals or
groups in the same organization.
Regardless of whether they are individuals or organizations, customers’ needs are constantly changing.
To stay competitive, organizations need to continually gather data on their customers to understand
their shifting characteristics and requirements
Tools and technologies are not enough, kind of data in itself is not enough to sharpen an organization’s
customer focus. That’s because once you have insights into your customers, you need to use that
knowledge to deliver value to them.
Collecting data about your customers isn’t the end of the story. The key is to turn that data into added
value—for your customers and your organization.
Whether your customers are within or outside your organization, you need to know them to serve them
successfully. Use these strategies to find out what their challenges are and how you can help them by
providing even better offerings
Observe customers
When market research is up close and personal, it can have a deep impact on corporate strategy.
Innovations that may not benefit customers today could meet their needs tomorrow.
Successful businesses know exactly who their most profitable customers are—and they focus on
creating offerings to please them.
Your target customers should be those who are both loyal and profitable.
The fact is, not all loyal customers are profitable. And not all profitable customers are loyal.
Categorize customers
Category Profitability/ Loyalty Fit b/w your offerings & their needs Profit Potential
True Friends Profitable and loyal Good Highest
Butterflies Profitable but disloyal Good High
Barnacles Unprofitable but very loyal Limited Low
Strangers Neither profitable not loyal Little Lowest
With this knowledge, you can begin to personalize your offerings and your approach. You can also use
this information to acquire new customers who share characteristics with your target ones.
Loyalty is reciprocal.
Emotion first, behavior second.
Motivation matters.
Go for gratitude and loyalty will follow.
Use information to take actions that deliver additional value to your target customers.
1. Value-extraction tactics - These kinds of strategies can enrage customers. They may then retaliate
against a company with lawsuits, mass defections, and negative word of mouth.
a. Have rules – e.g Minimum balance
b. Make it hard – e.g hard rules to abide
c. Rely on contracts to prevent customers from defecting
2. Value-provision practices - To provide value to customers, adopt practices that are transparent—
and put their satisfaction first
a. Map customers’ activities before, during, and after they use your product or service.
b. Look for activities where customers could be provided with more value than what
they’re currently getting
c. Identify ways to provide the new value
d. Uncover customers’ pain points
i. What hidden costs do our customers incur as they buy or use our offerings?
ii. What hidden risks do our customers encounter in doing business with us?
iii. What hidden costs and risks are preventing potential customers from doing
business with us?
Your company can sharpen its competitive edge through service innovation. How? Transform
the way you deliver services, which services you provide, and who performs each task related to
a service.
Simplify customers’ choices - Many customers value simplicity in the purchase decision process.
Exclusivity.
Entertainment
A genuine and human approach to transactions is rare, but it can transform a business.
Customer focus is everyone’s job, no matter what role they play or where they work in the organization.
An organization’s culture powerfully shapes how people behave and how they do their work. Culture
can therefore be more important than strategy for sharpening your organization’s competitive edge.
Engage employees
To help build a customer-focused team, start “from the inside out”—by focusing first on engaging your
employees
Model how customers should be treated. That makes it easier for employees to know how to
serve customers properly.
Strengthen employees’ job satisfaction.
Improve employee loyalty. The longer employees stay with a company, the better they know
customers and understand how to serve them.
Skills can be taught. But it’s hard to train someone to have the right attitude.
Give employees the freedom to make quick decisions and recover decisively from missteps with
customers. When you show that you trust them to make the right decisions, their job satisfaction,
loyalty, and productivity increase.
Remove or alter processes or procedures that impede employees’ ability to make decisions.
Set limits in one of two ways. Clearly define what employees can and cannot do, or define a core
set of standards that employees must meet but give them the freedom to decide the details of
how to do so.
Make sure that the latitude and limits enable employees to meet customer needs—and deliver
the results and service value that customers want.
Determine whether you’ve given your employees enough latitude by asking them if they feel
micromanaged. Ask them what decisions they feel they could be making that they are not
allowed to make now.
To get the intelligence you need about what customers really want, give more power to the employees
who know them best: your frontline staff. These five tips can help.
Determine the customer-related goals you want employees to achieve. The more specific and
measurable, the better.
Align rewards with your organization’s mission and culture.
Look for creative ways to recognize individuals or groups.
Frontline Employees
To advance your company's mission, focus employees on winning customers' loyalty, not on analyzing
customer feedback metrics. Your frontline employees are your best source of customer knowledge and
creative ideas for serving customers better. This five-step process helps you tap their collective wisdom
to become a truly customer-centric organization.
Innovation is about creating new forms of value for customers—something that people throughout the
company can and should do.
With your team, brainstorm ways to help customers reduce costs, mitigate risks, save time, or
boost their own profits. Also explore ways to improve the quality of experiences customers have
with your company and its offerings.
Recognize employees who try new approaches to providing more value to customers—even if
those approaches aren’t perfect.
Give people time and, if possible, funding to experiment with ideas for easing customers’ pain
points.
Encourage employees to ask themselves, “What is the essential purpose of my role? What
outcome do I deliver that generates real value for customers? How can I better fulfill that
purpose or deliver that value?”