What Happened to My Strategy? Part 2: Voice of the Customer

Before a strategic plan can be updated or created, there is a need to understand what has happened over the last few years and what needs to be done to position the company for growth.  Understanding the customer’s view of how markets, technology and attitudes have changed along with their new expectations is strategically important.   Suppliers need to know what their customers are thinking, now and in the future.   Even though your company has survived the economic downturn, the marketplace and its rules of engagement have changed.  Previous perceptions of long-term customers and what is required to get new ones are no longer valid. 

During the last few years, leadership teams have changed significantly, processes have been streamlined and layoffs have caused a significant loss of tribal knowledge.  It is possible that few of the senior leaders in place today were there 2-3 years ago.  This may also be true for your customers.  This requires a grass roots game plan that gets everyone on the same level of understanding of the marketplace and the customer’s perception of the company and its products. 

In order to better understand the marketplace, data gathering from existing customers is an essential activity for the creation of a go-forward strategy.  Many companies will conduct surveys that are generated and executed either internally or through an outside company.  The survey will include questions about customer satisfaction, maybe some questions about customer needs, and possibly, questions about the company versus its competition.  With today’s advanced survey tools such as Survey Monkey and others, there may be a temptation to utilize the internet to get feedback.  Although a productivity improvement and useful in many business situations, internet-based surveys have a low response rate and provide limited feedback.   Surveys of any kind only partially represent the customer’s perspective of your company and don’t provide understanding quickly.   The types of questions that you need answers to don’t easily lend themselves to surveys, requiring people who understand your company to get usable answers.  In the next section, we take a look at the types of questions a good strategy needs answers to.

1. What is the customer’s view of your company as a supplier?

As the economy tanked and significant structural changes were being made by both customers and suppliers, many processes and relationships were changed.  You need to understand how those changes have impacted the customer’s view of your company and its personnel.   This provides the people in your organization an opportunity to understand what they need to be doing differently to affect improved customer satisfaction.

2. What strengths differentiate your company?

Customers buy products from your company for a reason even though they have many choices.  It is critical to understand what those reasons are and to make sure that your business strategies emphasize them.

3. What strengths differentiate your competitors from you?

Just like the case above, customers buy products from your competitors for a reason.  They have made that choice because of loyalty, convenience, quality, technology, price, service, brand recognition, lead times or lower total cost.  Possibly it is because they don’t like the people who represent you.  It is critical for the company to understand what those reasons are and rank them in importance.   Failure to do so will significantly limit the success of any strategic plan that is developed.

  

4. What customer needs aren’t being serviced by you and your competitors?

Customers will tell you the good and the bad.  They are more likely to open up to you in person.  Even though they buy product from you and your competitors, every customer has some type of gripe about their current suppliers.  Asking a customer what he wants his current vendors to do better will yield a long list of things you need to do, either to keep the business or to take market share.

5. What are the biggest threats to your business with your customers?

The previous item focused on needs, but there are many threats to your business.  Competitors may be coming out with new products and systems.  There may be whole new technologies being developed outside the industry [which is where game changing products typically come from].  There may be significant changes in your customer’s approach to the market place.  You need to understand these.

6. Why did you leave us and what are your current suppliers doing better?

Sometimes the most useful information you can gather is through an understanding of why former customers left you.  If you can get them to speak with you, ex-customers often are the best source of helpful feedback regarding how you can improve.  The old adage “You can learn the most from your mistakes” holds very true here.  You may need to assure these sources that you will use the information to improve how you operate and engage customers, not to hound them into coming back to you (though, ultimately, you will want to attract many of them back).

7. What are your competitors doing going forward?

Customers usually don’t change vendors lightly.  It is a long process that requires careful thought and execution.  It is disruptive and time consuming.  As a result, you should ask your customers what new ideas, products, services or cost reductions have been proposed to them.  If they believe you will respond to the ideas your competitors have, they will be less likely to change vendors.  I have seen many companies gather valuable competitive intelligence from this question.

8. What new weaknesses have restructuring and lower R&D expenditures introduced into your  served markets?

Customers have been asking vendors to do more for a long time.  This has been accelerated over the last couple of years as customers have also been affected by restructuring and lower R&D and development budgets.   Your customers appreciate your willingness to help them make their jobs easier, more efficient and make them more successful.   If you identify what worries your customer most and deal with it, you will have a more loyal customer and can leverage that for incremental business.

9. What are the key elements of your customers’ strategic plans?   Consolidation of vendors? Off-shore supply?  Value and innovation?  Pricing? The cloud?

Every customer has a strategic plan.  In order to be a long term supplier and to gain market share, your company needs to understand the strategic needs of your customer.   They, too, are revamping their strategies.   Your company needs to be part of that and only good communications with your customers gives you a chance to participate.  Your strategy should include items that address the strategic needs of your customer, whether it be new systems, reporting, value improvements or innovation.

10. What customer needs are not being met by the company’s current portfolio of products and services?

Some of the most critical information for an effective strategic plan is where your product gaps are and the product gaps of your competitors.  Every company has product gaps and makes R&D expenditures to enhance their product offering.  When planning your strategy, every dollar expended needs to be on products and services that will yield significant results by giving your customers what they want.  Expenditures need to be focused first on products and services that will make a difference to your customers and provide a strategic advantage to your company.  Innovation is part of that, but innovation cannot be achieved if you don’t know what your customers are demanding from their suppliers.

Many companies will rely on sales people to get the answers to these 10 key questions.  They need to know the answers, but your senior team needs to be part of gathering that information.  A process where senior leaders are traveling with sales people to visit current and former customers during this data-gathering effort yields insightful information from the customer and your sales people.  It forges a stronger bond and is greatly appreciated by customers.  It also puts the direct answers from customers into the heads of the people who are responsible for crafting and executing the strategy for your business and helps you challenge and direct your organization’s change efforts with facts from the most important voices in the business.   A strategic plan that doesn’t have these elements is likely to miss out on the true needs of your marketplace.

About the Author:   Jim Gitney has over 30 years experience in world class companies.  He is the Founder and CEO of Group50™ Consulting. His latest endeavor is The Global Leaders [www.tgleaders.com].  His background includes running large operations consisting of thousands of people and multiple facilities both in the US and abroad.  Jim’s strength is working with boards, business owners and executives to develop business strategies that are focused on growth, improving productivity and significantly reducing cost.  Jim has lead 7 turnarounds during his career.  He works equally well in the board room and on the shop floor.  He learned his trade from companies such as GE, Black & Decker, Sunbeam and Rain Bird. 

About Group50 Consulting:  In its eighth year, Group50 Consulting has more than 30 consultants who have spent over 20 years of their careers in corporate America.  Our three consulting practices in Marketing/Sales, Manufacturing and Business Excellence are focused on speed, quality, cost, productivity and growth.  Group50 Consulting provides high level project resources that have experience in the issues that are keeping you up at night.  We provide consultants for individual projects, interim/part time executives and board members/advisors.  We guarantee our results.  Find out more at www.group50.com.  For a free consultation on how we can help, send a note to jgitney@group50.com, or call (909) 949-9083.

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