Is your business organisation-centric or customer-centric?
This was the question put to us at the end of a very challenging first day of a workshop I attended this week on Design Integration hosted by QUT and QMI.
Now most of us would say of course we are customer focused – we look after our customers and provide good customer service.
A customer-centric business seeks to understand their clients; to understand their problems and challenges; to know how and when they like to interact with us for example.
I found this concept challenging my assumptions as to how well I really did know my clients.
In their book “How Companies Win” Kash & Calhoun explain how the economy has moved from being supply driven to now being demand driven.
Up until about five to ten years ago you could do well in business by focusing only on what you supplied to customers, at a quality and price they expected.
Now focusing only on what you supply will most likely lead to you going broke.
Kash & Calhoun cite the example of McDonalds.
Its recipe for success from 1954 till 2002 was to open more stores.
The more stores they opened the more profitable they were.
Then in 2002 McDonalds made its first loss in 50 years.
Looking into this they realised they had stopped looking at what customers really wanted and how their needs and wants had changed and were changing.
Since understanding their customers McDonald’s turned a loss to a profit and from 2004 to 2009 they increased their sales by 42% and doubled their net profit from $2.3 billion to $4.5 billion.
Most of us in business are aware that to make a good profit we need to have a competitive advantage.
Unless we truly understand our clients even down to an emotional level it will be very difficult to deliver the clients solutions they greatly appreciate and value.
It is only when we can provide them this sort of value do we have a competitive advantage that is truly different.
A local business in listening to their customers found that it is most important for their customers to have their expensive machinery back operational as quickly as possible.
A possible solution which they adopted was to provide 24/7 service.
A breakdown costs their customer dearly and by providing this service they have developed a strong customer loyalty and are able to charge a premium.
An example from the workshop is Kimberly-Clark’s Huggies Pull Up nappies.
Prior to Pull Ups there was not much differentiation in the nappy market.
What Huggies did was to engage with the mothers of small children and discovered that the mothers’ biggest challenge was getting their tiny tots toilet trained.
Huggies came up with the Pull Up which enabled the child to keep a nappy on while slowly learning to be toilet trained.
By listening to their customer and discovering their real problem Huggies were able to outstrip their competition.
To prosper in these challenging times it is imperative that we become better at engaging with and listening to our customers and their problems and adapting our products and services around providing economic solutions to the client.
Peter Ambrosiussen is the principal of Ambrosiussen Accountants & Advisors and certified Gazelles International Coach www.ambrosiussen.com.au
View LinkedIn Profile – http://www.linkedin.com/pub/peter-ambrosiussen/29/171/a24
Published by Toowoomba Chronicle www.thechronicle.com.au on Saturday 1 December 2012