Many managers assume their products and services will be relevant tomorrow. But employees hide problems and markets change. These five questions will help you assess your vulnerability.
Most managers agree that achieving sustainable, organic profit growth requires delivering on a clear, precise customer promise; continuously improving on that promise; periodically innovating beyond the familiar; and supporting all of that with an organization open to new ideas and negative feedback.
But how can senior executives ensure that everyone in the organization grasps and supports the brand promise? How can managers create an open organization, so that rank-and-file employees are unabashed about sharing customer complaints with upper management?
Based on interactions with more than 150 senior managers and a wide-ranging review of pertinent case studies, marketing professors Patrick Barwise and Seán Meehan developed five questions managers can pose to help assess their organization’s ongoing ability to satisfy customers -- and thereby ensure that their products and services stay relevant.
No. 1: Can middle managers accurately describe your customer promise?
By asking middle managers this question, senior executives can gauge whether those further down in the hierarchy understand the customer promise. Encouraging middle managers to articulate the customer promise can also help senior executives learn how clear and explicit the customer promise really is. The more clear and explicit it is, the better it is.
For example, Procter & Gamble Co.’s Tide detergent promised to get clothes cleaner than any other product when it launched in 1946. This clear and explicit promise was -- and remains -- easy to state; it is not subject to misinterpretation by the customer. It is unambiguous. By contrast, “overnight delivery” implies delivery first thing. But to an office worker, it probably means 9 a.m., whereas to a construction site foreman it could mean 7 a.m.
No. 2: Can all members of your senior executive team name the three things that most undermine trust among your existing customers?
Since bad news tends to get filtered on its way up the hierarchy, there’s a danger top management won’t hear about the organization’s failures to deliver on its customer promise. The goal of this question is to transmit the voice of unhappy customers to the top of the company.
Yes, focusing on customer dissatisfaction -- which typically occurs when the company fails to deliver on its promise -- is hard, because it involves pointing fingers or revisiting bad decisions. But focusing on dissatisfaction also allows managers to uncover and act on the root causes. Why is this important? Because customer dissatisfaction undermines customer trust, which in turn diminishes the value of the brand.
No. 3: Is your brand really the best option for customers? Will it continue to be next month and next year?
When you believe in your marketing story or are in love with one of your brand’s distinct attributes, it’s easy to delude yourself into thinking you trump the competition. But do your customers agree? This question forces managers to confront the ego-bruising possibility that their competitors have better offerings.
How can you learn what your customers really think of you versus your competition? Procter & Gamble asks its executives to conduct hands-on customer research. About 70% of P&G managers have visited consumers in their homes to learn how its products (and those of its competitors) fit into their daily routines. Managers see with their own eyes what is good and bad, what is valued in a product and what is taken for granted.
No. 4: Have you embraced any novel ideas that have produced significant innovations beyond the familiar during the past year?
The first three questions force management to confront difficult internal issues. This one requires management to look beyond what’s familiar and ask: How can we meet genuine customer needs in new ways? The key is to frame the aim as “beyond the familiar” -- as opposed to “completely new to the world.” The innovations of Apple Inc. epitomize this aim. Throughout its history, Apple has focused on making technology accessible and attractive to the wider market -- in other words, its focus has not been on breakthrough functionality that only geeks will find useful.
To cite a few examples: The early Mac wasn’t the first computer with a graphical user interface. The iPhone wasn’t the first smartphone. There were plenty of MP3 players before the iPod, and iTunes wasn’t the first online music store. Yet Apple has gone on to dominate these markets because its main concern has been to meet customer needs -- and make sure the products are easy to use and attractive. Apple’s products are often “beyond the familiar” but they are seldom “completely new to the world.”
No. 5: Have frontline staff posed any uncomfortable questions or suggested any important improvements to your offering during the last three months?
In most manager-subordinate relationships, managers overestimate their openness to unwanted messages and underestimate the extent to which the power difference discourages subordinates from speaking up. This inhibits the flow of bad, albeit useful, news and discourages employees from presenting constructive criticism or confessing their own mistakes.
So if the answer to the above question is no, your company probably needs to work harder to encourage openness. A case in point: When Facebook Inc. CEO Sheryl Sandberg worked at Google Inc., she made a mistake that cost Google several million dollars. After she apologized to Google cofounder Larry Page, he told her: “I’m so glad you made this mistake.…I want to run a company where we are moving too quickly and doing too much, not being too cautious and doing too little. If we don’t have any of these mistakes, we’re just not taking enough risk.”
Of course, top management always says it wants frontline staff to take risks. But when a multimillion-dollar mistake draws praise from the CEO, frontline staff starts to believe it.
This article is adapted from “Is Your Company As Customer-Focused As You Think?,” by Patrick Barwise and Seán Meehan, which appeared in the Spring 2010 issue of MIT Sloan Management Review.