Introduction to Customer Focus
This section aims to help you to obtain a full understanding of how you can gain a competitive advantage in your marketplace through a better understanding of the ways you can focus your business on your customers and their requirements.
Areas You Need to Understand
It is important to recognise that no single feature can ensure that your business will adequately satisfy all its customers’ needs. Customer focus is a combination of factors each complementing and contributing to the things that customers consider to be of value. These valued attributes can be discovered by answering the following questions:
· What makes a customer buy your products or services rather than those of your competition (order winners)?
· What attributes must your products or services possess in order to be considered for purchase by your customers (order qualifiers)?
· What services do you sell to your customers and how important are the services to the sales of your products and to your profitability?
· What after-market support do you offer and how important is it to the sales of your products and the profitability of your business?
· Are your customers satisfied with your performance? Have they told you so?
Achieving the Right Focus
These questions are relevant in varying degrees to all manufacturing businesses, and it is important that managers take responsibility for providing the resources that must to be allocated in order to achieve a superior performance at an acceptable cost to the business. If you want to achieve positive answers to these questions, you will need to have developed excellent internal and supply chain processes:
· Suppliers who support your commitment to delivering quality products on time
· Internal manufacturing processes and suppliers which provide only good quality products and components.
· A quality system that ensures only good products reach your customers
· Strong continuous improvement activities to ensure that your processes perform progressively better and provide ever more impressive products and services to your customers.
Perhaps the best place to begin is in fully understanding your customer’s requirements. Customers provide the source of money that flows through your business and into your supply chain. Without customers, businesses cannot survive, therefore managers must make time to understand the key buying factors their customers use when deciding where to place orders.
Companies that depend on price as their key order winning criteria will always be challenged by a company doing it cheaper. Ideally, you should build your business based on an appropriate combination of service, technology, quality and strong brands. Your task is to find ways of meeting these customer requirements at a price they are prepared to pay, while still generating sufficient margins to sustain the relationship.
Aftermarket support can provide access to additional revenue streams that in some industries are considerably more lucrative than the sale of original equipment. Many companies have recognised the benefits to be gained from supporting their aftermarket customers. An aftermarket business, however, is very different from one supplying new original equipment:
· The customer base tends to be larger
· In most instances different to your original equipment customers
· The key buying factors vary depending on the circumstances
· Lead times for placing orders are much shorter.
For these reasons, success in your aftermarket requires teams with different skill sets and personal motivation. This can be difficult to sustain alongside the manufacture of the original equipment and focus can be lost in both areas. Also, the trend for original equipment to be ever more reliable and to offer increased service intervals continues to erode the aftermarket business.
Customer satisfaction is very difficult to measure without involving a third party and needs to cover a spectrum of factors considered important by your customers. The standard areas of cost, quality and delivery are always relevant, but other attributes may be the real order-winners. For example:
· The way you communicate,
· The embedded technologies within your products
· Your approach to resolving any problems that may arise
· How problems are resolved.
Your goal must be to develop close relationships with your customers where they are prepared to tell you their real requirements from a supplier. Once these are known, however, you will need to make every effort to ensure that all reasonable customer expectations are met, as your customer will now have an expectation that you will do so. Any subsequent failures will be damaging. A continuous improvement programme can help you to stay ahead of the competition.
Delivering high quality products on time and in the correct numbers remains fundamental to sustaining customer focused businesses. The quality of your products is remembered long after the price is forgotten. The global automotive industry was transformed by ensuring that components could be made to specified tolerances using process-capable equipment, leading to new standards of reliability and trouble free service. These lessons on quality are slowly being assimilated by other industries, but the drive for perfection is a journey that takes many years of commitment from everyone in your company, working to implement continuous improvements that, when combined, make a significant contribution.
Many companies are focussing investment in their core competences, and purchasing non-strategic items from third party suppliers. These non-strategic items tend to be of lower value, but must still be of excellent quality in order to ensure the quality of the final product. While this can be a very effective approach, you should be aware that establishing the approach offers some significant challenges:
· First, you need to have a clear and accurate understanding of what your core competences are
· Then you need to ensure that your people are fully trained in these areas and your plant and equipment are process capable.
· And ensure that the suppliers of your non-strategic items are totally reliable in terms of quality and delivery.
Most companies take this approach, at least partially, in order to reduce component costs, but you need to sure that you have properly assessed all of the risks before making any changes.
In conclusion, though it is generally well known that it is much easier for you to retain an existing customer than to sell to new ones, many UK businesses still fail to recognise the important role their existing customers play in the determining their success. Remember that no business can survive without customers; they are the source of all of the money that flow through the supply chains. Take care that you understand what your customers want and make sure that they get it!