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The Customer-Focus Gaps

“We should be doing even more to focus on our customers.” This message came through clearly in the new American Management Association/Human Resource Institute “Customer Focus Survey 2006.” Specifically, many organizations should do more to communicate and integrate a customer focus throughout their operations, not just in the areas of sales or customer service.

The decision to dedicate a global survey to the issue of customer focus was driven by previous research that demonstrated the critical importance of the subject. In AMA/HRI’s “Leading into the Future” report, respondents identified “focus on the customer” as one of the top two drivers of leadership challenges. In AMA/HRI’s “The Ethical Enterprise” report, “customer trust and loyalty” were among the top three reasons noted for running a business in an ethical manner. Then, in AMA/HRI’s “The Quest for Innovation” report, customers figured predominantly again, being the top reason for pursuing innovation.

The newest global survey asked 972 respondents about the extent to which their companies engage in certain strategic actions and the extent to which they think their companies should be engaging in those actions. Respondents consistently thought they should be using customer-focus approaches more than they actually do.

One of the most significant and interesting gaps between what companies do and what they should do was in the area of “creating excitement among employees for our products and services.” This was ranked 21st out of 60 strategic actions in terms of what companies do, but it was ranked 9th in terms of what companies should do. Survey respondents apparently believe that such enthusiasm would translate into superior customer focus in their organizations.

Another area where companies might do more is in “being customer focused at all customer touch points, not just sales and customer service.” This received a 24th ranking in terms of what companies do but a 12th ranking in terms of what they should do, suggesting that organizations need to extend customer-focus values and actions more deeply into their operations. Customer focus should be a priority for everyone, not just sales, marketing and customer service.

The idea that companies should do more to integrate customer-focus values and practices throughout the organization is also evident in the area of “reinforcing customer awareness and respect throughout all levels of the organization,” which was ranked 27th in terms of what companies do but 17th in terms of what companies should be doing.

A fourth significant “do/should do” gap can be found in the area of “having a formal strategy to develop and maintain a customer focus.” This was ranked 25th in terms of what companies do but 13th in terms of what they should do. The implication is that the lack of a formal customer-focus strategy is hindering some companies’ attempts to create a customer-focus culture.

Although organizations could do more to increase their customer focus, the AMA/HRI survey indicates that certain customer-focus values are held pretty strongly in companies. The survey asked respondents both about the extent to which their companies hold certain beliefs and the perceived value of those beliefs and associated behaviors. It found, for example, that “keeping promises to customers” is a kind of cultural bedrock at many organizations. Not only did “keeping promises” receive the top ranking in terms of what companies are doing, but it is also seen as the belief that has the greatest importance to the companies.

On a scale of 1 to 5, where 1 equals very little and 5 equals very much, “keeping promises” received an average score of 4.02 in terms of what companies do and 4.55 in terms of how much respondents value it. This finding might be because companies want to do their utmost to protect their brand and reputation. Married to the Brand author William J. McEwen has noted that building brand loyalty begins with a company’s ability to keep its promises (Robison 2005).

By surveying respondents about their beliefs and the degree to which they value those beliefs, the AMA/HRI survey was also able to calculate what is termed a “Customer-Focus Score.” This score captures a respondent’s perception of how customer-focused his or her company is.

When Customer-Focus Scores were broken out by demographic groups, the AMA/HRI survey found that smaller firms tend to be much more customer-focused than very large organizations. Whether ranked by revenue or by number of employees, small firms score higher than do their larger counterparts. The survey also indicates, however, that global companies—with their high levels of integration—are more customer-focused than multinationals, which have national or regional operations that act independently. It appears that whatever its size, an organization that aligns and strengthens its customer-related strategies and values can magnify its customer focus.

You can read the complete report on the AMA/HRI “Customer-Focus Survey 2006” on AMA’s Website.

Documents used in the preparation of this article include:
Robison, J. “Can This Brand Marriage Be Saved?” "Gallup Management Journal," December 8, 2005.