Surviving customers

In addition to assuring increased customer satisfaction and loyalty, a customer focused culture can contribute to the organisation’s innovation of products and services. Consequently, this will help secure a more sustainable future for the business.

What is customer focus?

ISO 9000 summarizes customer focus as follows: ‘Organisations depend on their customers and therefore should understand current and future customer needs, should meet customer requirements and strive to exceed customer expectations’.

To be customer-focused your organisation has to do a number of things first. The key areas include:

• adequate and effective identification of your customers
• adequate and effective identification and understanding of what your customers want, expect and need (now and in the future) 
• understanding of why your customers may need your products or service
• understanding of how your customers currently feel about your organisation

Who are your customers?

It is important to identify exactly who your customers are. What are their needs and expectations? How do they feel about your products or services? First and foremost, this requires a clear and careful definition of the term ‘customer’ itself. Once established, this needs to be regularly reviewed to capture any new data or categories.

ISO 9000 defines a customer as: the ‘organisation or person that receives a product’, where the product is the result of a process. This is very broad but helps to identify customers, both internally and externally. Give thought to the following:

• what are your organisation’s products or services?
• what are your organisation’s processes?
• who receives them or uses them?

By also considering who is affected by them or affects them, you can extend this process to identifying your stakeholders aswell.

In order to identify all customer categories, in addition to the above you need to consider several other factors:

• product development and lifetime – your customers may change as your product develops
• usage – consumers, secondary customers, etc
• locations - places you operate or sell your products or services
• competitors - who your competitors’ customers are
• complaints - who is complaining about an aspect of your product or service
• feedback - whose feedback affects your organisation and how

Market research, surveys, focus groups etc can help identify not just current but also future/potential customers as well as their expectations and needs.

What customers want, expect and need

Customer specifications

Depending on nature of your organisation and its customer categories, a customer may communicate their requirements through purchase orders, contracts, service level agreements, and any other written form of statement, verbal communication or any combination of these.

Identifying specifications is less challenging than identifying the customer’s needs, as the customer will voluntarily and naturally communicate their specifications to you. However, an effective communication system is needed to ensure that the organisation receives this input. Then a process must be in place to review it, examine your capabilities to meet any requirements, and effectively communicate this to the relevant personnel.

Customer expectations

Expectations are what the customers want but do not necessarily express or state for various reasons. In general the main reasons for this are:

• the customer believes that it is obvious. This will be something like an aspect of the product or service that is publicly known to be required, already provided by competitors, or historically provided to that customer already 
• the customer feels that they are outside of the scope of the product or service in question. This usually means either the aspects of the organisation’s behaviour or conduct, or the way a product is manufactured (ethical conduct and environmental impacts, for example) 
• the customer feels that the organisation does not have the capability to meet them (eg development of a product service to address further needs)

Remaining uninformed about customer expectations carries the risk of customer dissatisfaction and customer attrition. Organisations must therefore ensure they find this out and react accordingly. They need to question the customer, listen to the answers and respond effectively. After collating and reviewing these answers, the outcomes can be turned into organisation’s own goals for their products, services or conduct. Thus improving whatever you supply by ensuring you meet customer expectations.

Customer needs

Customer needs are essentially latent requirements that customers may not even know about themselves. However, once discovered and addressed, they can contribute to your innovation, continual improvement, customer retention and ultimately make for a more sustainable business.

Without researching and identifying customer needs, you will miss the chance to develop your products, services and conduct to meet them. Again, this brings with it a risk of customer dissatisfaction, attrition, and a non-sustainable business.

You must, therefore:

• think about the needs of your customers
• ask all relevant people
• listen to the answers
• analyse
• think about the possibilities and innovate
• and respond effectively.

Identifying customer needs and expectations

So, we’ve established that thinking about why your customers need what you supply will help identify some of their expectations and needs. There are, however, several other factors to consider:

• who are your customers?
• what is their product, service, or lifestyle?
• what are their values, visions and mission?
• why do these customers want or need your product or service? 
• what are the significant factors that affect your products, services or customer satisfaction?
• what discoveries and technological developments will affect your product or service or the demand for it?
• what environmental, social, economical and political issues will affect your product, service or the need for it?
• how will any new/revised laws and legislation affect your product, service or the need for it?  
• what impact on the customer and their business will there be if they are dissatisfied or with your product or service?

Factors that can affect products and services can include:

• product or service quality
• accessibility: suitable operating hours, suitable and accessible location
• effective communication system – eg internet, telephone, fax, letter
• availability of product or service 
• availability of staff for enquiries, feedback, meetings
• timeliness
• credibility 
• reputation
• staff attitude
• price
• consistency
• legal and regulatory requirements
• organisation values - social, environmental and economical.

Learning from complaints and compliments

Complaints

Customer complaints are unsolicited feedback. If handled effectively, these are a valuable learning tool and an opportunity to identify your performance and possibly some customer expectations or needs. 

Organisations clearly benefit from having a complaints policy. This will be an effective, structured approach with clear and measurable objectives for capturing complaints and responding to them.

Compliments

Most organisations do not think to treat compliments in the same structured way as they do complaints. This is somewhat shortsighted, as compliments can be used as a powerful learning tool. They provide:

• better understanding of customers’ expectations and possible needs 
• a free measurement of performance 
• identification of good practice
• an opportunity to promote the organisation where possible and appropriate
• an opportunity to thank and motivate staff

Creating a customer-focused culture

Culture is based on values, traits, patterns, competences and behaviour.

To create a customer focused culture, you need to ensure the:

• clear definition and commitment to the organisation’s values, strategy, policies and objectives with respect to its customers
• design of processes in accordance with these values and behaviour
• effective communication of these throughout the organisation
• evaluation of the effectiveness of both the communication and the training 
• recruitment of customer-focused individuals with similar values

There will be barriers to change, but like any culture change programme there are several issues to be considered:

• top management commitment and leading by example
• effective and clear planning 
• adequate and effective communication
• suitable and effective training
• monitoring and measurement
• recognition of achievements and communication of results

Customer satisfaction

Customer satisfaction as defined in ISO 9000 is: the customer’s perception of the degree to which the customer’s requirements have been fulfilled.

Organisations need to think about how they will understand this perception. There are several ways to find out, and they do not all involve asking the customer directly. There are several sources that can provide information on the organisation’s customers’ perception, such as ongoing relationships and repeat orders, sales and benchmarking against competitors, brand name, reputation, and so on.

The combination of all these sources of information can help build a more accurate and reliable picture of what the perceptions are.

In summary, the steps to take include:

• identifying all sources of information and which ones to use
• planning the methodologies and allocating the resources for gathering the information
• obtaining the information 
• review and analysis of the information
• response to the customer
• review and monitoring of actions
• communication of results, internal and external

Factors to consider for using the information:

• provision of adequate resource for timely review, response to customer, analysis and actions 
• ensuring reliability and accuracy of results – is there a need for statistical techniques?
• if sampling, consider sample size and type
• communication of results to relevant personnel
• communication of actions/results to the customer (as appropriate)
• taking corrective and preventative actions, including results in manage¬ment review and using them for con¬tinual improvement

Also bear in mind that a customer-focused organisation: 

• understands the importance of customers and views customer focus as an integral part of its management system
• identifies and understands who its customers are, both internally and externally
• researches and determines what its customers want, expect and need, currently and in future 
• establishes values, policies and objectives that address its customer requirements
• ensures effective internal communication of values, policies, objectives, customer requirements, and the importance of the customer to its personnel
• develops strategies to meet its customer requirements
• develops and implements the necessary operational processes and controls to deliver them
• provides necessary and adequate resources to deliver them
• monitors and measures the results and outcomes
• proactively seeks information on customer perception and feedback, and responds to them effectively (listens to the ‘voice’ of the customer)
• ensures effective internal communication of the results and outcomes
• acts on the results and outcomes, reviews and continually improves

Customer complaints

An effective customer complaint process should ensure that guidance is provided on how complaints are captured and also the responsibilities and method for:

• receipt and recording the complaint
• communication to relevant personnel
• response to customer and resolution 
• follow-up to ensure customer satisfaction 
• investigation of root causes and actions
• measuring the effectiveness of actions
• analysing the complaints and identifying trends

It is recommended that the process is:

• piloted to ensure suitability and adequacy for intended purpose
• communicated to relevant personnel and training provided on its requirements
• easy for customers to use
• monitored and measured to find out whether it works (eg decrease in customer complaints, no repeated complaints, increase in customer satisfaction etc)

Customer satisfaction surveys

Factors to consider if obtaining information through customer satisfaction surveys:

• who in the organisation should be asking the customer?
• who in the customer organisation should be asked?
• what questions should be asked?
• what format will the survey have? (writ¬ten, interview, etc)
• when should the survey take place? 
• what timeframe should it be completed within?
• how to ensure that customers will take part in the survey?
• do we have the necessary resources for the above?