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06/14/2011

(Part 1 of 2)

Listening To Your Customers Necessary For Significant Feedback

By George F. Brown, Jr.

In (the book) CoDestiny, we argue that the most successful business strategies are ones that build upon shared successes. If your strategy creates value for your customers, it opens the potential for your own firm to capture some of that value for its own shareholders. Unlike strategies that focus on winning a zero-sum game with your business partners, CoDestiny strategies have the potential for sustained contributions. But while the logic of such win-win strategies is compelling, identifying their elements and implementing them successfully is a challenge.

One of the tools that is critical to successful CoDestiny strategies is developing an effective and continuing flow of messages from the market, gaining insights from participants at every stage of the customer chain about their issues, challenges, priorities, and perspectives. While not the only element needed for successful strategy development, such customer-based insights are on the short list of critical ingredients.

Today, most businesses have implemented some formal programs through which they can listen to their customers, many going by names such as Voice of the Customer Program and others involving variants on the theme of customer satisfaction. Such programs can make a significant contribution to strategy development. In the paragraphs that follow, some insights that have emerged on this topic are provided as guidance for firms looking to either develop such programs or take existing ones to higher levels.

Research and experience suggest that there are three primary goals that can be achieved through a Voice of the Customer initiative. Clarity as to the goals of the program and about the ways in which it can connect to strategy development and implementation, provides focus to its design and execution.

The first of the three goals is the most critical in terms of its value and the most challenging in terms of its degree of difficulty. The goal is simple: gain customer inputs into your own strategy development process by learning of their perspectives on the future business environment and on their most pressing needs. This goal connects to many of the elements of any company�s strategic plan � gaining insights related to product innovation, identifying new services critical to customers, learning about trends at each and every stage of the customer chain, identifying new applications that customers are targeting, etc.

Success in gaining customer insights about the future business environment and new needs can enable a supplier to get ahead of opportunities and strengthen its value proposition in areas of vital importance to its customers. The key here is ensuring that Voice of the Customer interactions are forward looking. (And most approaches fail miserably in that regard, focusing on past performance instead.)

We�ve all had �Duh!� moments in our business experience � instances when an insight dawned upon us that was quite obvious, but had been overlooked. One of my Duh! moments (and I admit to many) occurred in a company I was running some time ago at a senior staff meeting when discussions turned to the major challenges we were facing in keeping up with customer service expectations as our customers rapidly expanded to one new global location after another.

The Duh! moment occurred when a colleague asked, �Have we ever asked our customers about their expansion plans?� We started to do so, and the problem never resurfaced. Some customers provided us a very solid five year plan, and none of them were without an answer. We just had to ask.

The lesson here is that thinking about what information you need to be effective in supporting your customers should be among the first questions you ask of them. If you translate all of the themes associated with future plans and the evolving business environment into what insights you need for the decisions your firm is contemplating, the potential for customer contributions is huge.

That doesn�t eliminate the need for some open-ended discussion about opportunities and challenges that you might be overlooking, but the starting point for a future discussion ought to be the arenas in which you need to be prepared to create shared successes along with your customers.

One other important lesson that is critical in gaining insights about the future involves paying attention to the entire customer chain. A firm�s customer chain is the path that leads from its suppliers all the way to the final users of its products. In business markets especially, customer chains can be complex and extend for many stages.

An electrical component manufacturer, for example, sold to integrators who in turn sold to distributors who sold to contractors who handled installations at end customer sites. The perspective about the future can vary at each and every stage of the customer chain, with implications that ripple backwards and forwards. Effective listening doesn�t stop with direct customers. It�s necessary to listen to all of the customers. And one trick that best-practice firms employ is asking customers at each stage of the customer chain what they would like to know about the other stages of the customer chain. Some remarkable insights have been gained by simply asking that question.

George F. Brown, Jr., is co-author with Atlee Valentine Pope of the book, CoDestiny: Overcome Your Growth Challenges by Helping Your Customers Overcome Theirs. He is also the CEO and cofounder of Blue Canyon Partners Inc., a strategy consulting firm working with leading business suppliers on growth strategy.

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