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Adjusting the Picture on Customer Focus


Last updated 8/5/2010

At first glance, “big picture thinking” and “customer focus” would seem to be mutually exclusive terms. After all, the first phrase connotes a farsighted, panoramic view of business, while the second implies an intense, laser-beam-like concentration on the customer. Yet as revealed in Magnifying Customer Focus: A Study of Current Trends and Future Possibilities 2006-2016, a global study commissioned by American Management Association and conducted by The Human Resource Institute, the terms are not only compatible, they are inseparable.

The study finds that customer focus is a top strategic concern for many businesses today and is ranked as one of the most important needs concerning issues ranging from leadership challenges to ethical behavior and innovation. Yet it also reveals that there is a wide disparity between what activities companies practice when it comes to customer focus and what they should be practicing.

The study asked respondents to rank a variety of strategic actions in each of five areas–environment/culture, communications, HR practices, measurement and organizational practices–in terms of what their companies are doing now and then to rank those same actions in terms of what their companies should be doing. Here is a closer look at the results for each of the five areas.

In environment/culture, “having the support of top management” ranked number one in both the “should-do” and “doing-it-now” categories. On the surface this would appear to be a heartening result – leadership is doing what it should be doing.

But that good news is undercut by the number two should-do action: “having leaders set the example with customer-focused behaviors.” This is only number four in the doing-it-now category, meaning that while leadership may nominally support customer focus, it is not necessarily supporting it with its actions. Perhaps that helps explain why “including customers in our corporate value statements” ranked number two in the doing-it-now category but only number six in the should-do category; mission statements are all well and good, but it’s action that counts.

In the communications area, Magnifying Customer Focus finds that companies are falling short of communicating the customer focus message internally. Respondents ranked the action of “having an internal plan in place to communicate customer insights” number four in the should-do category, but only number seven in the doing-it-now category, suggesting that many companies are missing this crucial component. It’s important to note that this doesn’t simply mean leadership handing down memos. It means employees at all levels of the organization must share their perspective and facilitate feedback from the customer so the company can get a true picture of the state of its customer service.

Companies are placing too much emphasis on market share as an indicator of customer satisfaction, according to respondents’ results in the area of measurement. “Regularly measuring market share” ranked third in the doing-it-now category, but eighth in the should-do category, strongly suggesting that respondents believe this particular metric is of little value when it comes to gauging customer satisfaction. Bain & Co.’s Fred Reichheld has gone even further in questioning the relevance of market share as a reliable measurement of customer satisfaction. Reichheld maintains that although companies may capture market share and generate considerable revenue from dissatisfied customers, it is actually more costly than profitable in the long run to do so.

When it comes to HR, “expecting employees to anticipate customer needs” ranked number one in the doing-it-now category and number three in the should-do category. It seems that while the respondents believe this strategic action is important enough to be included in the top three of actions that should be taken, it is not the overall most important action. That distinction belongs to “providing customer-oriented employee training,” an action that ranked number one in the should-do category and number three in the doing-it-now category, a surprising result considering the number of customer service training programs currently in place. The takeaway from this seems to be that while companies may think that they’re addressing customer service training needs, they are in reality falling far short.

While the organizational practices area is a broadly defined subgroup with substantial overlap with the other four areas, it did produce some interesting results of its own. For example, “responding to demands for customization and personalization” ranked eighth in the doing-it-now category but ranked only twentieth in the should-do category. Customization and personalization have been hot topics lately, with many proclaiming them the next big thing, but clearly the survey respondents consider them overrated as a customer focus issue.

Conversely, the tactic of “being customer-focused at all customer touch points, not just sales and customer service” ranked fourth in the should-do category and twelfth in the doing-it-now category, revealing a large disparity between its perceived importance and the extent to which it’s executed.

That point—an urgent reminder that customer focus needs to be instilled throughout the organization and not isolated in one or two departments—serves well to sum up the entire survey. Click here to download the full survey and to listen to a webcast featuring AMA CEO Ed Reilly, Jay Jamrog, Executive Director of HRI and Strativity Group president Lior Arussy discussing the survey results.