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Customer focus defined

Customer focus refers to an organization’s orientation toward satisfying actual and prospective
customers’ needs

 Who the business’s customers are

 What those customers want
 When and how they want it
 What they’re willing to pay for the value they receive

It help us to

 Acquire customers.
 Retain and develop customers.
 Reduce costs.

From product focus to customer focus

 Technology. Rapid diffusion makes it easy for rivals to quickly copy product and service
 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:

 “Who are our target customers?”

 “What problems do our target customers have?”
 “Why do our customers buy from us and not from someone else?”
 “What else do they need from us?”

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.

Customers’ changing needs

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

Beyond tools and technology

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.

Get Feedback From Customers

 Your organization’s website.

 Social media.
 Market research.
 Focus groups.
 Customer service process.
 Follow-up satisfaction calls or surveys.

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

 Get out in the field. Send a small team to observe customers.

 Capture the data. Have team members capture data through silent observation and through
asking a few open-ended questions
 Analyze the data.

When market research is up close and personal, it can have a deep impact on corporate strategy.

Anticipate customer needs

 Understand your customers’ choices.

 Track customers’ experiences.
 Learn together with customers.
 Foresee customers’ future needs.

Innovations that may not benefit customers today could meet their needs tomorrow.

Identify your target customers

Successful businesses know exactly who their most profitable customers are—and they focus on
creating offerings to please them.

Evaluate customers on loyalty and profitability

Your target customers should be those who are both loyal and profitable.

 Time between a customer’s purchases

 Average profit that a customer generates

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

Category Loyalty strategy

True Friends  Don’t communicate too often, or they’ll ignore everything.
 Reward their loyalty with exclusive access to special events and high-quality,
limited-supply products.
Butterflies  For the short time they buy, get as much as you can from them with hard-sell offers.
 After their purchasing drops off, stop investing.
Barnacles  If you think they have more money to spend, offer them products or services
related to those they’ve already bought.
Strangers  Identify Early
 Invest nothing
Customer loyalty is no longer simply about repeat business. It’s also about the kind of influence your
customers have on your brand and your sales.

Mine your target customers

 What they want

 What they need
 What they will require in the future

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.

Deliver Additional Value

Connect feedback to action

Use information to take actions that deliver additional value to your target customers.

 Brainstorm. Heed the five rules of brainstorming:

o Defer judgment,
o Build on others’ ideas,
o Hold one conversation at a time,
o Stay focused on the topic, and
o Encourage even seemingly wild ideas.
 Narrow the field of solutions. Determine your criteria for choosing solutions. E.g
o What product or service functions are essential from our customers’ point of view, and
what are “nice to have”?
o What are our cost constraints?
o What are our size or shape constraints (for a product)?
o What are our time constraints for developing a new offering or feature?
o In what ways must the product or service be compatible with existing products or
 Develop prototypes.

Provide—don't just extract—value

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.

 Follow through on an intended purchase

 Buy the product or service repeatedly
 Recommend the offering to others

1. Help consumers navigate information sources.

2. Build trust. Enlist trustworthy product or service, Aggregate your advisers’ advice, and make it
easy for people to find and use it.
3. Make comparing options easy. Provide tools to help customers identify and weigh the product
or service features most relevant to them.

Some customers want to be teased

 Exclusivity.
 Entertainment

Make service a competitive advantage

1. Understand customer perceptions

a. Sequence. People prefer service encounters that improve quickly over time and that
end on a positive note.
b. Duration. People judge time differently, depending on the circumstances. When
mentally engaged, they don’t notice that time is passing. And when a pleasant
encounter is seen as having many stages, people perceive it as longer and more
c. Rationalization. When an encounter turns sour, people look for a single cause. They
conclude that deviations from rituals caused the problem. And they blame individual
employees, not systems.
2. Manage customer perceptions
a. Get bad experiences over with early. These include unpleasant news and long waits in
b. Finish strong. Remember that final impressions—not first ones—stay in customers’
memories. So make those last impressions positive.
c. Segment pleasure—and combine pain. Break pleasant experiences into multiple stages.
Blend unpleasant ones into a single stage.
d. Give customers choices. People feel happier and more comfortable when they believe
they have some control over an uncomfortable process.
e. Stick to rituals. Perform repetitive, familiar actions—such as sending handwritten
thank-you notes—especially during long-term, professional-service encounters.

A genuine and human approach to transactions is rare, but it can transform a business.

Build a Customer-Focused Team

Make customer focus everyone’s job

Customer focus is everyone’s job, no matter what role they play or where they work in the organization.

The Ripple effect of a Great Work Culture

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

 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.

Select for attitude, train for skills

Skills can be taught. But it’s hard to train someone to have the right attitude.

 Articulate the most important attributes of your best employees.

 Explain these attributes and qualities to job candidates. You’ll encourage them to self-select
into or out of a position.
 Consider a variety of creative recruiting techniques, such as involving customers in the
selection of new hires.
 Ask your best performers to suggest job candidates. Winners attract winners.

Invest in a mix of training

Offer a mix of training in both interpersonal and technical skills.

Provide tools and support

 Help your group better deliver the results customers want

 Improve the way work is carried out—for instance, by making processes more efficient
 Coordinate with the tools and systems used in other areas of the business

Allow latitude—within limits

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.

Empower Your Customer-Facing Employees

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.

 Change the organizational context

 Get rid of unnecessary work
 Streamline the process you do need
 Get real time data from front line
 Promote multilevel and multigenerational collaboration

Reward for results

 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.

1. Connect the front line to customer strategy

2. Teach people to think for themselves
3. Experiment to implement
4. Breakdown the hierarchy
5. Make in ongoing investment

Encourage employees to innovate

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
 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?”

Collaborate to improve the customer journey

1. Identify customer journeys

a. To be truly customer focused, different functions in an organization must work together
to identify—and improve—specific “journeys” that customers experience across
multiple touchpoints.
2. Adopt a collaboration mindset
a. By interacting with each other, either in person or on online platforms, they can bring
their diverse perspectives together to generate new ideas.