Understanding Your Customers

What are your customers telling you, or not telling you, everyday? They are sending signals to you and others around them daily. Are you picking up the signs? It is not easy to understand what customers want or need. It requires continuous pulsing to stay in touch and to be responsive.

Over the years we have come to find that there are many ways to approach defining the customer experience and perspective. There are some very complex scientific polling methods that can be based on a relational (exec to exec) or transactional (where the rubber meets the road) surveys. These can become great institutions where accountability is about administering surveys and then negotiating results. Not as action oriented as it may appear at first glance.

We, at ASIL, try to have our clients focus on some simple questions to start.

* How many new customers are you adding?

Do you know what is it that has them coming to you? Do you know what products or services they are buying? Knowing why customers are coming to your business makes a difference in how you position your investments and disinvestments.

* How many existing customers are you losing and why?

Are you losing customers from a particular segment of your customer population? Are they strategic customers? Is it a quality issue with your products and services? Is it because of cost, ease of use, or some other reason? Knowing what customers are choosing competitive alternatives, and why, is a critical factor in any customer management process.

* Why are your continuing customers staying with you?

Don’t rest on your laurels and assume today’s customers are tomorrow’s customers. Stratify your customer landscape and survey various segments to understand why they are choosing to do business with you. Choice is ever present in today’s connected world and you must be proactive to keep your customers. It costs less to keep a customer than secure a new one.

* Do your existing customers promote your business?

Word of mouth is a powerful tool in driving customer attraction and retention. If your customers are delighted enough to be telling their associates about your business then it’s important to know why.

* Are you making profit on the customers?

The bottom line in any business is to make profit. If you are not profiting from your business then you will not have the staying power to last. Gain the insight to know how your products and services are contributing to the bottom line. Knowing this will serve both you and your customers.

It all comes down to reading the simple signs and then taking meaningful actions that can deliver the results to satisfy your customers.

contributed by Warren White and Peter Pazmany
Co-authors of "Driving Complex Change"

Spotlight: The Hunt for Information

The race is running to get the information needed to make sound business decisions to beat the competition, satisfy the customer and pay the shareholder. Everyday we see people whose sole purpose in life is to run this race and provide information to those that need it now. Guess what? That applies to all of us in one way or another.

There can be many barriers to obtaining timely, accurate, and complete information. In fact, a lack of timeliness, accuracy and/or completeness are the tripple threat to useful information. Anyone of these can single handedly wipe out a good idea or decision.

If you look at our paperless society (laugh) you will find that we are now able to store more data than ever before. Many times data is confused as being information. The majority of the data captured by companies will never be viewed in any meaningful way. In addition, the small amount of data that is viewed will typically be well after the fact of occurrence.

I recently reviewed ten different Executive management reports that were intended to provide the big picture. Each one was a fine product. They were all rich with data. Yet none of them could capture the critical few elements needed to succeed. Instead there were pages and pages of stuff that flat out will not be read. It seems that the quest to be all complete routinely generates throw away work.

We all understand that this is not a perfect world, so make a concerted effort to define and select the critical few vs the many. Balance the needs and understand the risks for trading off on the big three (timeliness, accuracy, and completeness). Remember to pace yourself. How is your race going?

contributed by Peter Pazmany

Industry Trends

Implement an Incentive Program – Align Employee Performance to Business Goals

Aberdeen surveyed 206 companies in order to measure the impact of incentive compensation programs. A key driver for 88% of the companies to implement such programs - the need to align employee behavior and performance to business goals. The study also found that Best in Class companies were three times more likely to invest in the technology for an Incentive Compensation Management (ICM) application. These companies achieved better business benefit in terms of revenue growth and profitability, and reduction in overall staff turnover. Aberdeen makes the following recommendations based upon the findings from this study:

• Implement a balanced scorecard goal-setting and measurement system for executing the company’s strategy.
• Implement a structured performance management process to give workers feedback on their performance against goals and standards.
• Implement a robust ICM application and use it to plan and track incentive programs.
• With an ICM application implemented, allow workers to go online immediately after work performance to learn whether they qualify for a bonus, and to determine the financial impact of their compensation.

contributed by Deborah LeBaker

Barry Bonds, Hall of Fame or Hall of Shame?

Every day we read and hear more about Barry Bonds’ pursuit of Hank Aaron’s all time home run record. Hank Aaron and the Baseball Commissioner have already stated that they will not be at the game when it happens. It is interesting because if you remember, the Roger Maris family was on hand when Mark McGuire broke the single season home run record. It was a great day for baseball, the fans and the country. Much like when Cal Ripkin Jr. broke Lou Gehrig’s consecutive games played record. And here, Barry Bonds is about to break one of the great all time records in baseball, and many people are distancing themselves.

Think of your business experiences and see if you recall a situation where management or others distanced themselves so as not to be associated with something or someone in question? We have all seen what this can do to an organization. There is always a question as to where you stand, second guessing on decisions, hesitation to make a move, and going along with the gang mentality. While these situations may benefit an individual or even a few, it usually impacts a team negatively. It is a classic win /lose scenario and people will be forced to choose sides.

We recommend that you suspend judgment and keep an open mind. This will be tough to do, especially when you are surrounded by so many powerful forces.

As far as Barry is concerned, he still had to hit 95 mph fastballs out of the park. He had to stand tall in the batters box as the pitchers tried brush him off the plate. He had fewer good balls to hit because pitchers would try to pitch around him. When he does break the record, I’ll be celebrating his accomplishment. But then I am a Giants fan.

Sound off and let me know what you think. E-mail me at msingleton@asil-inc.com with your comments. Batter up!