Close to customers in all directions

Ask: Would you be willing to run your business in any way, in any language and currency, anytime, anywhere, to meet any customer's request?

Indeed, in today's society where success is the king and loser, this kind of management ability is no longer optional, it is related to the life and death of the enterprise. Thomas Siebel, chairman and CEO of Siebel Systems, thinks so. He said the 21st century is a "customer-centric" era. The power in the hands of customers is increasing, they can come and go as they please, and they may switch to the arms of competitors at some time. In this case, the old concept of "customer satisfaction" has been given a new meaning of the times: obtaining the highest customer satisfaction has become the key to business success.

Indeed, leading companies are looking beyond customer satisfaction in the original sense.

Because, while companies still compete on price, product quality and distribution, these factors alone are no longer enough to give companies a competitive advantage. Only those businesses that can consistently meet, and even anticipate, customer needs can win the head-to-head battle for customer loyalty. Chinese companies and companies in other countries face a similar situation: simply being "market-driven" is not enough. In order to gain a competitive advantage, in addition to producing according to the needs of the market, you must start developing long-lasting, strong relationships with your customers.

There is a term that vividly describes this relationship - "close to the customer". Just think, once you are close to someone and the two are intimate, how can you not know what they think, think and need? Maybe you know what he needs before he does! That's what being close to the customer is all about.

The term first appeared in the best-selling book "Principles of Market Leaders." According to the book's co-authors Michael Treacy and Fred Wiersema, businesses can create value for their customers in three ways:

Operational excellence (lowest total cost);

● product leadership (best product);

● close to the customer (best solution);

"Companies close to the customer do not produce according to the needs of the market , but from the specific needs of each customer." Trishy and Wilsma said, "These companies are very serious about understanding customers and the products and services they need. Build a strong relationship with them based on lifetime value."

Today's widening range of choices for customers has led companies around the world to focus increasingly on customer-friendly operating practices. Melinda Davis, founder and CEO of Next Group, said: "Customers prefer to have a smaller selection, so as not to be overwhelmed by the dazzling array of products. They want to find a trustworthy merchant, Save yourself the hassle of picking."

The foundation of being close to your customers is to make them trust you completely.

Take TVR, a famous British handmade supercar factory, as an example. The factory never advertises and has only one polished commander in the marketing department, but it is the third largest sports car manufacturer in the world, behind only Porsche and Ferrari. "We've got 1,300 orders for a new car that we've developed," said TVR's Ben Samuelson. "Nobody else has driven this model other than our company. We let our customers feel: TVR sports cars, not to be missed!"

Will customers order products they have never seen before? It's a fantasy! However, this is the power of customer trust.

What's the secret to TVR's success? How does it win the high trust of customers? Quite simply, everything is due to being close to the customer. What TVR does is make models that customers love. The company successfully organized owners to participate in a racing series and learned customer preferences from such events. The company's owner, Peter Wheeler, and the company's employees are fans of racing, further bringing customers closer. At the London Motor Show, TVR factory employees - not specially hired sales representatives - pitched products to the audience in front of their booth for a full two weeks. "You might think TVR's focus on the customer is a bit of a maverick, but it works!" says one industry watcher.

Examples cited in Wilsma's book include Black & Decker, a well-known power tool maker, and Nypro, a plastic mold maker. Black & Decker had marketing managers survey male heads of 50 households about how they used power tools. In this way, customers have the opportunity to face the business and express their needs and concerns. Nypro, on the other hand, identified its high-end customers through research, and then designed new business processes specifically for these customers, "sharing important information with customers, and building design and marketing teams to solve their specific problems."

Close The customer's company is concerned with more than just improving customer satisfaction. They regard it as their duty to improve the performance results of the client company, and establish a system directly related to the client in each department of the organization. In other words, staying close to the customer is not just the responsibility of the customer service or marketing department. The rest of the company - including R&D, production and even support - also has the customer's interests in mind.

The advantage of being close to the customer is that you can sell at a higher price than your competitors because it is too expensive for customers to choose other suppliers. The reward of being close to the customer is that the customer will treat you as a long-term reliable supplier and never give up.

Build a

Institutional Support System Close to Customers

Excellent leadership and the right attitude are very important, but these alone are not enough to really get close to customers.

Proximity to customers depends on the establishment of a good system to provide support for cultivating and maintaining close relationships with customers. First, determine the correct evaluation scale. Operations-oriented companies tend to use some process evaluation criteria, such as cycle time and efficiency. Product-oriented companies focus on product evaluation criteria, such as new product development and product quality.

Companies that are close to their customers have criteria for assessing customer retention - and this is the most critical. How many customers can the company retain in each period? Also, they evaluate customer share (customer share) - note, not market share (market share). To calculate customer share, first figure out how many transactions your company gets from a customer and divide by that customer's transactions with all suppliers.

Equally important, they also assess customer performance: "How much has customer performance improved and how much has the problem been solved by using our company's products?"

Finally, close to the customer's The company measures the profitability of each customer. If you can't improve business performance, what's the use of being close to customers? They generally assess the customer's lifetime value and then calculate the costs that will be incurred during the customer's lifetime.

Shaping Organizational Structure and Corporate Culture

Reaching customers is easier said than done. In practice, most company functions can go wrong, including sales, marketing, manufacturing, finance, and human resources. At a minimum, the thought-action of the people in the product and customer departments must be coordinated.

Let's look at a thought-provoking negative case. Larry Farrell, an authority on entrepreneurship (see "The Four Spirits of Entrepreneurship" in our April 2004 issue), points out that the consequences for people in product and customer departments can be disastrous if they go their separate ways. , the most typical case is Xerox (Xerox). The company's Palo Alto Research Center (PARC) has been fruitful, opening up a large swathe of the computer industry. However, Xerox planted trees and others enjoyed the shade, but Xerox itself failed to seize the opportunities brought by these inventions. Among the products invented by PARC, personal computer, fax machine, laser printer, Ethernet office network, computer designed based on mouse, dot matrix screen display, etc., were further developed by competitors and successfully put into the market.

"Unbelievable, how could something like this happen?" Farrell said. "It's very simple, Xerox's product development and marketing departments are inseparable from each other." The staff are also young, energetic, smart and capable. But in Farrell's view, "the two departments simply don't match up, they don't have a common corporate culture, and they seem to be from different planets." As a result, people in the marketing department don't trust developers and their inventions, and where would they be? to promote them? Now Xerox has finally learned its lesson, there are people from the marketing department in the R&D center, and the R&D personnel are also sent to implement the project together with the marketing department.

Toyota has a similar organizational structure - its "customer-driven production system" is known around the world. Toyota's design, production, marketing and sales departments report to the same person in charge. In addition, in the Toyota production system, each model has a chief engineer who is responsible for design, production and marketing throughout the process.

Of course, leadership is also critical.

JetBlue CEO Dave Neeleman is a frequent subject of interviews in the financial media because he enjoys flying his company's flights, serving and talking to passengers. As the company grew, it was not easy for leaders to maintain direct contact with customers, but Rillerman did it. Norm Brodsky wrote in the American "Inc." magazine that through close contact with customers, "Lillerman obtained first-hand market information at the first time, In this way, you can discover market trends before your competitors. This is the biggest advantage of establishing direct contact with customers. The market is changing, technology is changing, and customers are looking forward to change. If you can always keep your hands on the pulse of the market, You'll be one step ahead of the competition. Otherwise, you're at risk of rigid thinking."

In addition to being personally connected to customers, Rillerman has created a customer-friendly corporate culture. His "leadership by example" inspired the managers and employees below. When seeing that the boss is not sitting firmly in the chair of the master, but goes down to the front line and has "intimate contact" with customers more than once, his subordinates will naturally follow suit.

Choose Customers, Build Networks

The old business adage says, "In order to win customers, you have to do more than your competitors." That's what leaders like Rillerman seem to do, and in fact they do more than that. The adage is true, but needs a slight twist: "To win the best customer, you have to pay more than your competitors."

Sounds like a no-brainer, but Siebel points out, Many businesses don't know how to identify the best customers. They typically analyze the revenue generated by each customer, but this approach is too pediatric to gain any advantage. Because the key metric is the customer's contribution to profit margins. However, this approach is more complex, requiring analysis of the turnover brought in by each customer and then maximizing the turnover of large customers.

But Siebel candidly points out that "not every customer is indispensable to a company." His advice is to target low-value customers or offer them new, more profitable alternatives. products, or remove them from the top customer list.

Once you've selected your target customers, you'll see them differently - you can network with them. In an interview with Fast Company magazine, digital technology expert John Sviokla said companies will increasingly see customers as members of an interconnected network. In other words, don't just listen to your customers, build a network with them.

Companies that treat their customers as network members have the opportunity to work with the best customers to design truly great products. Such examples are not uncommon. The next step is to produce products that continuously meet customer needs. "For example, without the customer saying anything, the company knows what model his washing machine is, if it's still under warranty, if it needs to be replaced, or if it's time to replace it," says Sviokla. > As is the case in a competitive industry, when customer satisfaction becomes a yardstick in the minds of everyone in the company, a strategy that is close to the customer becomes the magic weapon for the company to win.

The author, Jet Magsaysay, is a consultant for this publication. Translated by Liu Songjie.