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What does customer focus really mean?

3/16/2015
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Dear Gemba Coach,

We’re discussing improving our customer focus, but we’ve realized we’re not quite sure what the phrase really means. Any pointers?

Oh dear. As I understand it, customer focus has two broad meanings. First, it means to put customers’ satisfaction first in all aspects of the company. Second, it also means to have a reactive customer service departments and a good customer relations program. Neither are easy.

I was recently at the gemba in the shipping area of a company that makes high-grade industrial equipment and asked the management team an obvious question: do you like your machines, and why? The reassuring part was that they all did. The scary part is that they all did for their own reasons: they liked engineering complex machinery. They were money makers. They had some challenging innovative components, etc.

Who is the customer of this machine, I asked, and what does he or she like about it? Silence. Although this management team felt they were customer focused in terms of analyzing demand and understanding what “customers” needed or wanted in general, they had never asked themselves what any particular customer would like (or dislike) about their purchase.

Customers use, or in Clayton Christensen’s terms, “hire” a product to do a job. They might like the product or service for its own sake, to some extent, but mostly they’ re trying to get on with doing something or other. The product or service only makes sense in the context of how the customer is trying to use it to produce what results. Consequently, customers tend to be sensitive to two main dimensions:

  • Performance – and this tends to be true of all customers alike. Better performance on the key functional dimensions is always better than less.
  • Annoyance – specific aspects of the product that generate hassles under  certain conditions, such as no light for a machine used outdoors at night or fragile parts that fail with rough use.

Walk the Customer Service Gemba

Every customer’s evaluation of a product or service is a trade-off between performance which tends to be generic and annoyance which is very context specific (price being a frequent annoyance item). High annoyance makes you vulnerable to switching, particularly if switching costs are low. One of the many effects of internet sales is that switching is now often just a click away and one moment of annoyance can easily sway the customer in trying your competitor’s offer – once they’ve done that once …

A large part of the problem is therefore to figure out just how much performance customers expect and what annoys them in which circumstances. Nothing replaces going to the gemba and visiting customers at work to see how they use products or services in real-life situations, but often it’s not so easy to actually go and see.

Which is why the second aspect of customer focus is so important: your customers service department is your best measuring device. Customer service has the central role of responding to any annoyance customers feel strongly enough to complain about. By studying every such complaint and asking the customer service personnel to simply ask “why?” we can learn a lot about how customers use products and what for.

Customer service’s importance is unfortunately underrated in many companies where it’s an isolated department, often hidden in the sales organization. Customer service needs to be brought back at the forefront and visited in the gemba walks. The customer service department is a living measure of both how we intend to treat customers (especially the unhappy ones) and what tweaks customers’ noses so that we can fix these features in the product, and engineer improvements in the next generation.

True Customer Focus

Beyond traditional customer service, web-based technologies have introduced a new dimension to customer focus. As the Lean Startup movement argues, beyond making gambles about what customers like and learning from whether they did press the like button or not, we can introduce a “measure” step: build-measure-learn. How can we build measuring customer preferences into our development cycle?

Like many others, the company I was having this conversation with has a huge installed base of machines at many different customers. Modern machines now accumulate data about their own performance, failures, parts change and so on, but nobody listens. In lean, one of the first issues for autonomation is to make sure that all machines on the line can  automatically shout out when tools need changing. Why not apply the same thinking to installed equipment at the customer?

And, more broadly, why not code algorithms to crunch the wads of existing data on how machines are used by customers and what their weak points are. A fresh approach to the data can allow us to blend both forms of customer focus and build a measuring step in the design cycle to make sure our new product responds to actual customer use and not our ideas of what customers should do with our product or service.

It often turns out that a more detailed approach to customer usage reveals much smaller niches than before. While an older generation of managers still dreams of the “one product takes all” that will beat the market and destroy the competition, younger entrepreneurs now know that customers don’t necessarily ask for frills or bells and whistles, but do look for basic requirement closer to their own use range, which means increased variety – not in the old sense of “mass customization,” but in the new sense of more smaller niches across the full range.

That is where customer focus intersects lean and the drive to improve quality while increasing variety as well as reducing cost by eliminating waste. As Jim Womack and Dan Jones highlighted in Lean Solutions, true customer focus demands true flexibility to be able to solve customers’ problems completely, when they want it and how they want it, without wasting their time and without asking them to do more work.

5 Comments | Post a Comment
Daniel Breston March 16, 2015

Great post Michael and especially like the question about why your customer likes your machines.  In It questions such as this one will help answer the question: And we are doing this for whom? which hopefully will stop us doing wasteful activites.

Clark Harrison March 16, 2015

Hi Michael

Great article.

I especially like your comments about the wealth of knowledge within the Customer Service departments.  My view is that every business / every product has problems sometimes, and that customers accept that.  What separates good companies from bad is how those problems are handled. Good companies can turn a potentially unhappy customer into a delighted one. Bad companies can turn a potentially unhappy customer into a "terrorist" who not only actively avoids doing business with you again, but tells everyone else to do the same.  

I have long tried to have my service teams take a formal role in development and testing of new products - it is often amazing what they request that others don't think about at all.

 

Michael Balle March 18, 2015

Thanks guys,

Check out this talk from Pentland: there is a fun case about customer service integration in a bank:

https://www.youtube.com/watch?v=HMBl0ttu-Ow

Cheers!

Don Fitchett March 20, 2015

Part of the lean approach to customer focus is to constantly seek out unique perspectives like this article you shared. Our (bin95.com) unique perspective we offer here is our approach that 'everyone we communicate with is a customer'. Be it the typical 'someone who purchased from us', the person you work for is also a customer, the person who works for you is a customer, people you interact with online are a customers, etc. Now go out and constantly get to know your customer better. J

Another unique approach to customer focus we take is to always place what is best for our customer as main priority, even over profit. (Profit may come later and/or indirectly) Doing what is best for customer may not always appear to customer that  is what is best for them, if we cannot convince them of that. An example is sometimes we will get a customer who insist on only 2 days of PLC training for their maintenance and engineering. Being the experts in delivering the PLC training, we know that is only enough time for them to learn enough to be dangerous with false confidence. So if we cannot convince customer 3 days is absolute minimum, we do what is best for customer and decline delivering the training. (If we cannot train them properly, we preferred not to do it at all. Even though in that scenario of doing what is best for the customer in our expert opinion, cost us revenue and a possible future customer) 

Hope this offers some additional perspective to a customer focus approach.

Michael Webb April 1, 2015

Great article, especially the idea of expanding your understanding of what the customer wants and needs by studying customer service experiences and learning about the "job" your customer hired your product to do. 

One important point is that, customers sometimes need help to avoid being myopic in their thinking about the job they want your product to do. When they concentrate on the purchase price of a machine (visible cost) they can inadvertently drop the context of their overall production throughput (invisible cost), or, as Don Fitchett pointed out in the comments, they may wish to reduce training costs (visible) at the expense of the effectiveness of the training (invisible). 

Customer service can definitely help provide insight to the customer experience. However, the customer's problems must be understood in terms of the full systems context they exist in, just like your own company's problems. 

So, I would argue that a true customer focus sometimes also requires the ability to understand - and occasionally assist - the customer's executives in framing how they assess value. That is not limited to the experiences of the machine operators or engineers your customer service people may come in contact with. It also needs to include the way the customer thinks about their production operations (througput), how costs are evaluated, and sometimes even their sales and marketing departments (what is value added and what is waste to their customers). 

Getting these kinds of contexts defined and articulated is the province of professional marketing and selling. It can help the customer improve the framework they use in assessing value and making decisions. When done effectively, it can enable them to recognize value and waste they could not see before.

Perhaps this might also belong in your thoughts about customer focus. 

Michael Webb

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