Companies may think they’ve tuned into customers when, in reality, they’re self-absorbed.
“Although most companies start out with a strong focus on customers, as the organization grows beyond a dozen members, people may stop looking outward and become preoccupied with internal processes,” says Craig Cochran, a region manager at Georgia Tech’s Enterprise Innovation Institute, where he assists companies with quality improvement and lean techniques.
In his new book, “Becoming a Customer-Focused Organization” (Paton Press, 2006), Cochran explains that this corporate myopia is a natural phenomenon sparked by self-preservation.
“Once someone becomes part of an organization, it’s only natural to want to remain part of it – at least, until something better comes along,” he explains. “The irony is that this inward orientation doesn’t ensure survival. In fact, it guarantees the opposite—irrelevance, obsolescence and death.”
In contrast to other books on the topic, Cochran takes a global approach to being customer-focused, covering everything from management systems to complaint resolution. A customer-centric philosophy isn’t just for Fortune 500 companies, he stresses: “All organizations have customers, including government agencies and nonprofit groups.”
In search of feedback: A good example of the inward orientation at work is how many companies approach customer feedback as an annual event – an Olympic survey of sorts – instead of treating it as an ongoing process.
“Companies shouldn’t try to invent new ways for collecting customer feedback,” Cochran says. “They already have countless customer interactions available to them, ranging from salespeople to technical reps. What’s important is to provide some structure to these interactions and share them with everyone in the organization.”
Weaving customer feedback into daily processes makes it easier to digest and easier to take action on, he adds.
Embrace complaints: Another measure of an organization’s true focus is how it handles customer complaints. Most companies treat complaints not as red alerts but as something they’ll get around to eventually. Managers even argue about how to categorize complaints, whether it was a bona fide beef or merely a comment.
Smart companies cherish customer complaints. “Customers who complain are not nitpickers or looking for discounts, they’re committed to your organization,” Cochran says, noting that complaining requires time, effort and emotion. “Someone who isn’t committed to your company wouldn’t bother complaining.”
Customer-centric organizations make it easy to complain. They use toll-free numbers and complaint desks staffed by knowledgeable people who don’t give scripted answers. They apologize for any inconvenience suffered by customers and thank them for bringing the problem to the company’s attention.
Perhaps most important, customer-focused organizations make sure they get back to customers. “Unless you let someone know what action has been taken, the customer is never going to perceive a difference,” Cochran says. “You’ve got to close the loop. If the customer isn’t aware of the fix, then the remedy doesn’t exist.”
Leading indicators: A customer-centric company tracks customer satisfaction and loyalty metrics at the highest levels of management instead of relegating them to the customer-service department.
In most companies, however, senior management fixates on financial measures like sales and profits. “But these are historical metrics of what happened in the past,” Cochran points out. “In contrast, customer-satisfaction and loyalty are leading measures that indicate what will happen in the future, so they’re more valuable to the organization.”
Bottom line, if a company isn’t concentrating on its customers, the blame belongs to the boss. “The leadership of an organization has no job more important than making sure everyone knows the importance of the customer,” Cochran says. “CEOs who want real job security should try to please customers, not shareholders.”
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