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Four Pillars of Customer Focus
We operate in a fast-paced world where change seems to be a daily occurrence and competitors (known and unknown) are ready and capable to win over even a business-to-business company’s most loyal client. Learning how to effectively focus on customer needs and wants has become a top priority for business-to-business companies.
One phrase that has become mainstream in today’s business environment is customer focus. We at Blue Canyon define customer focus as an organization-wide approach to conducting business such that the primary criteria for decision making is improving the value provided to current and potential customers. To be truly customer-focused, however, we believe there are four pillars that companies must have:
- Mutual benefit
- A relationship advantage
- Customer experience
The premise behind mutual benefit is creating value for customers who will in turn reward you for that value. This can be done by providing a product, service, or solution that allows your customer to command a price increase from its customers, increase market share, or lower costs. We once worked with a global security solutions provider who operated in a very complex, multi-stakeholder environment to identify areas along the customer chain where they could provide greater value. After a thorough evaluation of the client’s entire customer chain, the team was able to design new channel structures that would allow the supplier to deliver greater value along the entire customer chain and improve relationships with market participants.
Different offers vary in importance to different customers. It is up to the supplier to prioritize investments accordingly. Choosing begins with segmentation, which is the foundation of a successful growth strategy that delivers top- and bottom-line results. Companies can survive without good segmentation, but they rarely thrive. Some telltale signs we see most often around ineffective segmentation are non-responsive, indistinct, or unidentifiable segments, segments defined by customer characteristics versus customer needs/purchase behaviors, and one-dimensional segmentation.
An effective segmentation strategy requires an in-depth examination of your market with a focus on listening to and learning from direct, intermediary, and end customers.
A Relationship Advantage
Over several decades of working with business-to-business companies, we’ve collected numerous examples to prove that when all things area equal in terms of price, service, and product, the company with the relationship advantage always wins. Therefore, it behooves companies to promote relationship behaviors that matter. It can be a tie-breaker.
Assess your relationship along three areas—trust, execution, and collaboration—to evaluate how strategic your customer relationships are. Without any of these, you most likely are viewed by your clients as a vendor and have a transactional relationship. If you have trust without execution and collaboration, chances are that you are a preferred supplier that meets promises, but lack the breadth or depth to be a top-tier or best-in-class supplier that exceeds promises and shares in successes. It is only when you have all three (trust, execution, and collaboration), that you are viewed as a best-in-class supplier, which includes joint planning, linked goals, and aligned priorities.
We view customer experience as being a part of customer focus. This is the most critical pillar, because it involves the entire organization. It is a shift in organizational mindset from a functional business model (i.e., R&D/product development, marketing, sales, operations/supply chain, customer services, etc.) to a customer experience business model (discover, evaluation, purchase, access, use, etc.)
A shift in the mindset of the entire organization, not just any one function, is critical to being successful as a customer-centric organization. It’s not just sales and marketing. Rather, in many cases, support functions, such as legal, IT, and finance can help resolve issues quickly so customers can view the supplier as customer-centric.
Building a customer-centric culture is hard, transformative work that doesn’t happen overnight. It may even increase cost-to-serve pressures, which will dictate choices that have to be made. However, customer focus and, ultimately, accelerated growth is attainable when you focus on the pillars that can support your customer focus initiative.