Workplace

Put the customer first


Creating a customer-centric company is easier said than done. It's a concept every business owner wants to grasp but often doesn't. And, unfortunately, in tough economic times if you aren't giving your customers the most for their money, they likely won't think twice about leaving you for your competitors.

Becoming a customer-centric company requires taking a long look at your company and understanding what motivates your customers to buy from you instead of from your competitors.

The value chain

Many companies base their operations on the value chain model that was popularized by Harvard Business School Professor Michael E. Porter in the mid-1980s. The value chain, which is a string of critical processes intended to help companies understand how to create and sustain a competitive advantage, describes how a product or service should travel through an organization's various value-adding activities (including inbound logistics, production, outbound logistics, marketing and sales, and services) and eventually be delivered to a happy customer.

The value chain tends to make sense to business owners because it is easy to place customers at the end of the process. But this mindset often weaves its way into every aspect of how a company manages itself and how business owners make decisions.

Using the value chain can create a situation in which a company's employees become focused solely on delivering products or services. Employees who follow a value-chain approach often are trained to think in terms of product and service development, delivery and value. Without even realizing it, your company quickly can become product-centric instead of customer-centric.

A company that focuses on consistency in execution and production but not on customers' specific needs rarely will succeed. Therefore, it is important you and your employees take the time to focus on your customers as individuals.

Customer-critical path

To stay viable in the business world, you must cut the value chain and establish a customer-critical path. Consider what new customers want when they approach your company for the first time. Ask yourself questions such as: What does the customer really need? Why did the customer choose to approach my company and not a competitor? Is the customer approaching just my company, or is the customer approaching my competitors, as well? What will set my company apart?

Once you start considering your customers' perspectives, natural customer groupings will begin to emerge. It is your job to strive to see things from the various perspectives of these natural customer groupings.

A good customer-critical path offers options for all your customers. You undoubtedly know that not all customers' needs are the same. A customer-critical path may need to begin in several places to meet the needs of several types of customers.

From this initial entry point, your organization can methodically travel the customer-critical path through each major step that these new customer segments must go through to become happy, paying customers.

This is a benefit of being customer-centric: There isn't one narrowly focused value chain confining your customers.

A customer-critical path allows you to easily adapt to your customers' different needs so your company can be useful to them for the long term.

Company transformation

Adopting a customer-critical path can transform many aspects of your company. It can allow you to better understand your customers and use more effective value propositions. This drives the bottom line in several ways—a stronger value proposition increases appeal, driving revenue. And better service and customer inter-action will improve your customers' experience and increase their loyalty, thereby driving customer lifetime value.

If your mission and vision statements say your company is customer-centric, follow up these statements with action. Properly craft a customer-critical path—it can provide a pleasant experience for your customers and profit for your company.

David F. Giannetto is director of Roseland, N.J.-based Cohn Consulting Group's Enterprise Performance Management Practice.

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