It makes good business sense to create and maintain a customer-focused organisation. Gaining

new customers costs more than just keeping your old ones happy, and loyal customers generate

more income. TTeedd MMaarrrraa argues that companies should stop talking about becoming customer

focused and just do it

It is possible that the birthplace ofmeaningful organisational changebased upon customer focus was Cana-da during the mid-1980’s. Manyorganisations around that time

launched significant programmes fororganisational change around the cus-tomer. In fact, it was Dave McCamus, thenpresident of Xerox Canada, who set thetone and direction when he drew a dia-gram, in the presence of the group of exec-utives charged with transforming XeroxCanada to a truly customer-focused organ-isation (see figure 1).

What he proposed was a longer-termapproach to running the business. His phi-losophy was that customer and employeesatisfaction were inextricably linked andmore recent research has convincingly con-firmed this hypothesis. By taking care ofthe customers and employees, the share-holders will be taken care of as a result of

must look externally, focusing more andmore on gathering real-time informationabout customers and competition. Thevalue of the customer-contact functionsand the engagement processes (eg sales,delivery, technical support etc) whereorganisations interact with their customershave become critical success factors.

Research has shown that a one per centincrease in customer loyalty equates to anaverage nine per cent increase in overallorganisational profitability. It costs sixtimes as much to attract a new customer asto keep an existing one. Do you know howmany positive references your current cus-tomers give your organisation?

Organisations are waiting for a clearunderstanding of the requirements neces-sary for becoming customer focused. Inthat regard, a good starting point for iden-tifying these requirements is the Baldrige

the higher revenue, profitability and mar-ket share value being realised. So, what hashappened since the mid-1980s? Not agreat deal, disappointingly. The reality isthat there is more talk regarding customerfocus and its virtues than action. The resultis that in a survey done as recently as 2000by the EFQM regarding critical strategicissues facing organisations, senior execu-tives said that the number one issue facingthem was how to become more customerfocused. The reality is that when the goinggets tough, anything that has to do withthe customer (and staff for that matter)drops off the table or is put on the back-burner.

Focus on change

Focusing on the customer is the fastest,most positive way to create and sustainmeaningful change in an organisation.Today, to be truly successful, organisations

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creating customer focus

customer satisfaction

15

and excellence model criteria. Both ofthese best-in-class management systemscontain significant elements directly orindirectly related to the customer. In fact, ifall the customer-related components wereadded up, they could easily represent near-ly 500 points. In addition, both modelscontain customer focus as either a ‘corevalue’ or ‘concept of excellence’. Figure 2highlights at least some of the primary cus-tomer links within the excellence model.

The cat’s whiskers

What would you hope to find in a trulycustomer-focused organisation (see figure3)? You would first find a customer-focused culture in operation. Also anorganisation in which people at all levelshad a deep abiding belief in the impor-tance of the customer and where manage-ment at all levels were aligning theiractions and behaviour with their words bymaking the necessary investments, settingpriorities, engaging customers and allocat-ing resources which clearly communicateto all (customers and employees alike) theirresolve to satisfy customers.

This customer-focused culture would theninfluence the nature and content of theorganisation’s vision, business plan and keybusiness objectives. From the business plan

should then flow customer relationshipstrategies targeted to those customers youwant most. Companies must ask them-selves: ‘Where do we want our relationshipstrategies to have impact?’ It seems logicalthat this is where your organisationengages the customer. Research by Bain &Company indicates that it is not unusualfor organisations to lose 20 per cent oftheir customers annually if they do notpinpoint these customer-crucial areas.

Customer sensing processes can bethought of in much the same way aswhiskers on a cat. Without whiskers, catsbehave erratically and are unable to judgedistances effectively. It is the same withorganisations as often these ‘sensing’processes tend to be dysfunctional - notproviding the right information in a timelymanner. While there are potentially a num-ber of ‘sensing processes’ the followingshould be considered to be to be chiefamong them. They are:• an enquiry, problem and complaint

management process• a customer satisfaction/loyalty mea-

surement and management process -with the emphasis as much on ‘man-agement’ as ‘measurement’

• a customer contact process - call cen-tres, customer service or support oper-ations

The CRM bandwagon

CRM systems are too often viewed as aquick technological fix, but usually they donot live up to software provider’s promises.

The reality in many organisations is thattheir implementation of a CRM system hasabsolutely nothing to do with their inher-ent belief in the importance of the cus-tomer in a relationship sense - only aneconomic sense. Also, many of the organi-sations in which CRM systems have failedto reach their potential, lack any well-defined customer relationship strategies.The adage that ‘if you don’t know whereyou are going, any road will get you there’holds true here. The problem is that after

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customer satisfaction

Customer satisfaction

Employee satisfaction

Shareholder satisfaction

Figure 1. The leap of faith

those cases where the customer hasbeen dealing with a competitor

Next is the ‘new’ customer phase. ‘New’customers have unique needs which areoften not met by organisations. As a conse-quence, ‘new’ customers are forced to fol-low a trial and error method to find theeasiest way for them to get what they wantfrom you - particularly so in the business tobusiness environment. If the learning curvefor ‘new’ customers is too long and steep,they may go elsewhere. If they leave aftertwo years, an organisation will loosemoney on the deal. During this phase, thecustomer-sensing processes are critical formonitoring complaints, satisfaction andthe enquiries or requests for service -allowing a business to respond to thechanging needs of its customers, missedopportunities, product, service or processimprovements, or competitive challenges.

In the mature phase, there is often a needto bring new energy or excitement to therelationship with the customer. Here, find-

spending a considerable amount of moneyon a CRM system, organisations get downthe road and find themselves arriving at anundesirable destination - one where thecost/benefit is dramatically and negativelyout of balance. Further, the customer-sens-ing processes of many organisations areoften dysfunctional. They provide poorquality information regarding customerswhich is then utilised to drive poor deci-sions. In fact, the CRM system simplyaccelerates the use of poor information tomake poor decisions even faster.

There are four distinct phases in the rela-tionship with a customer. First is the‘attraction’ phase - identifying and attract-ing what the customers want most. Unfor-tunately many organisations fail tocapitalise on the opportunity of gainingtwo types of information during this phase.These are:• understanding the customers motiva-

tion for buying from an organisation aswell as their expectations

• gaining competitive intelligence in

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customer satisfaction

These are a few examples around which you can

assess your current practice and behaviour, relative

to those required for true customer focus. Rate your

organisation on a scale of one to five where one

equals ‘we don’t do that around here’ and five

equals, ‘we have a world-class approach to this

issue’. See how you compare:

• management’s actions and behaviours are

always consistent with their words regarding

the importance of customers

• customer and market data and information are

key to our policy and strategy formulation

• the skills and knowledge critical to building

and sustaining customer relationships have

been identified and training has been conduct-

ed for all of our customer-contact employees

• we rate our suppliers based upon the value

add which their input (eg materials, compo-

nents, information) provides to our customers

• our organisation has a comprehensive

approach for ensuring that customer require-

ments are translated into specifications for

new products and services

• our organisation has an accurate, realistic and

comprehensive overview of the total complaint

level (verbal and written) as received by all

areas and all functions within the organisation.

Our data indicates a steady decline in overall

complaint volume over the past three years

• we experience a level of turnover and absen-

teeism among our customer-contact personnel

that is so low, our organisation is considered

‘best-in-class’ in our industry

• management ensures that clear, complete dis-

closures of relevant information are provided

to customers and other stakeholders, such as

communities, on a regular basis

• we track supplier problems that impact our

customers and work with those suppliers to

prevent re-occurrence. There has been a

steady decline in these types of supplier prob-

lems over the past three years

Some questions to ask about your customer-

sensing processes:

• how good are your engagement processes?

• where are your people having difficulty satisfy-

ing the customers they interact with?

• where is the competition doing a better job?

• what are the basic needs and the wants

(those things the customers would really like

you to be doing that you are not) or ways of

adding value (providing a tangible or intangi-

ble benefit the customer recognises)?

• what are your internal process effectiveness

indicators saying?

• are you delivering service excellence across

the scope of your engagement processes?

Leadership

1c

Policy and strategy

2a, 2c

Product and service

design

5c

Customer relationships

5e

Customer results

6a, 6b

Design and

improvement of

processes

5a, 5b

People

3b, 3e

Partnerships and

resources

4a, 4e

Figure 2. A customer-focused organisation (EFQM)

Customer and market

knowledge

(CRM)

17Qualityworld

Ted Marra is president of Marra

Quality Inc, which focuses on

performance and relationship

excellence. He has worked with

over 100 companies helping with

organisational and cultural

change. He has been vice presi-

dent at Walker: CSM, president of consultancy, Care

Associates and of TARP Midwest. In these positions

he concentrated on the design, pilot testing and full

implementation of customer complaint manage-

ment processes.

ing ways to more effectively cross-sell orfine tune value proposition becomes a crit-ical success factor. The customer-sensingprocesses and a CRM system can workhand in hand. But there is no logic toimplementing a CRM system and thenforcing the dysfunctional customer-sensingprocesses to fit.

Finally, what most organisations should bestriving for is to create secure relationships.These are ones where the customers wouldnot even think of doing business else-

where. Even when tempted by the compe-tition, they remain loyal. Unfortunatelyproprietary research among a number oforganisations in Europe, indicate that thisgroup represents no more than ten per centof a company’s customer base. There willalways be some customers which willleave. The point is to minimise this depar-ture, particularly if these are the customersyou want most. Examine the reasons whycustomers leave and identify patterns ofevents which lead to defection. A systemwhich can detect ‘at risk’ customers will

allow a business to intervene and preservethe relationship. The longer the customerremains with you, the greater the revenueand profitability of that customer.

Customer focus? Easy to say, but morechallenging to do. First, understanding therequirements is a key. Then building a cus-tomer system which is sensitive to all thestages in the relationship life cycle withcustomers comes next. Avoid the urge tojump to a quick fix such as a CRM systembefore you have your relationship strate-gies well-defined and your customer-sens-ing processes functioning effectively

customer satisfaction

Customer focused culture

Vision, business plan and key business objectives

Customer relationship

strategies

CRM

Customer ‘sensing’

processCustomer

engagement

processes

• sales

• delivery

• service

• others

Customers

Figure 3. The customer system of an organisation FeedbackQQ