Posted tagged ‘Customer’

Problems vs. Opportunities

December 21, 2009

The single greatest issue in addressing a client’s or colleague’s needs is understanding what we are trying to solve or manage in the first place. The reason this is so critical is because misunderstanding what the desired outcome is supposed to be typically results in the wrong solution.

Here’s a simple example. If we want to entertain ourselves and our friends on a Saturday night, we can ask what are the options? Once we add criteria or constraints, the choices narrow. For example, determining that we are on a budget of, say, less than $50 per person might eliminate tickets to a Broadway show. Deciding that we had to be back by 11 pm to relieve the babysitter might mean that we have to stay local.

What it all comes down to, in management speak, is clearly defining the problem. Solving the “right” problem usuall produces a subset of choices that will yield outcomes for which we would be happy.

Words, here though, are very important.

If one shifts from a problem definition to an opportunity definition, the options will become richer, the choices more exciting. And with that will come far greater and more robust ways of creating an outcome.

After all, wouldn’t it be more fun for you, your clients and colleagues to create an opportunity rather than solve a problem?

Types of Measures

February 20, 2009

There are three types of measures:

1. Activity measures

2. Output measures

3. Impact measures

Activity measures tells us how efficiently something was done. It answers questions such as:

  • How long does it take?
  • How productive is the department?
  • How many resources were used?

It focuses us on internal tasks, timing and resources but it is NOT about outcomes. As an example, profitability is an activity measure because it relates incoming revenue to internal operational costs. It measures the efficiency within which resources are utilized to produce income.

You’ll find activity measures are usually used with internal operations groups and frequently these are the measures used for multiple phases of processes

Output Measures emphasize the results of the work rather than the work activities themselves. Outputs tend to be physical products, services and communications that one group sends to another. These types of measures answers questions about what has been produced such as:

  • Does the product meet quality standards?
  • Was the product sent on time?
  • Was the product delivered on time?
  • Was the customer satisfied?

Output measures are about products NOT about production. They gauge quality, timeliness and evaluation by the CUSTOMER or USERS and therefore the measuring source is usually outside of the group producing the output.

Customer satisfaction is an output measure that requires obtaining feedback from outside the organization (this can be a customer internal or external to the organization.) Most output measures are using internal standards. These measures are useful when you are interested in whether the results meet certain standards.

My personal favorite is the last of our set and the one the President and our legislative leaders truly want to cause.

Impact measures ALWAYS require feedback or customer research to develop meaningful measures. So what is the difference between customer satisfaction measures and impact measures?

Customer satisfaction measures what the customer likes. Impact measures what the product does for the customer. It is all about value.

Impact measures answers questions such as:

  • Does the product make the customer more productive?
  • More successful?
  • Do the services make the customer more effective?
  • More influential?
  • Do the products help the customers reach their goals?

These measures require serious examination of the customer because there is no other way to get information about the customer’s productivity, success measures or goals without their input and evaluation.

Most important it shifts the focus to “What do you need from us to help you succeed on your own measures of success?” This type of measure alters relationships and makes what you achieve more valuable.

It makes you realize exactly what is the point of what we do.

Discovering the Benefits that We Provide to Our Customers

September 17, 2008

We believe that as good managers and leaders, you have a good feel for why your customers work with your company. There is a tremendous opportunity when creating a strategic plan to really tighten that perspective.

We naturally have a tendency to ascribe our own personal perspectives as to what a customer really values about a product. Put simply, this is the wrong way to evaluate the benefits of what your company provides.

The customer’s viewpoint is truly all that matters. To discover that perspective, you must do two things.  First, you must talk to your customers. Second, you must listen to them and hear what you don’t already know.

Your customers will tell you what works great about your product or service. They will tell you what your product or service does for them, how it works and what they find valuable about it. Listen to the small things that they are saying. Can you find a pattern? Can you group their answers into something important?

Ask approximately a dozen of your core customers and a few organizations that you would like to be customers, in each customer segment, a series of questions. Asking these questions results in finding out with certainty what is meaningful to them.

We recommend that you ask these four questions.

1)      What are your reasons for working with our company (what do you value about us) or what are your reasons for using our service or product? The answers to this question will tell you why the customer uses your product or service today.

2)      Where do you think your industry is heading? The answers to this question will provide you with the context regarding the issues that your customer will need to manage in the near term.

3)      How will you operate given the direction of the industry that you’ve just described? The answers to this question will tell you how your client needs to work in the future. It will begin to give you insight as to what you will need to provide in the future that will allow you to keep earning their business

4)      What will you expect from our company (or our product or service) in the future (what will make us indispensable to you)? The answers to this question will provide you with what your client sees that you will need to do to keep earning their business.

Undertaking this interview will produce substantial and wide-ranging benefits. You will:

  • Learn how to better express your value to the marketplace
  • Discover short-term opportunities to sell additional goods or services.
  • Be able to add and contribute to your clients’ strategies
  • Very naturally deepen your relationship with your customer as every customer wants to feel special and simply showing interest
  • Gain thee necessary business intelligence to accurately plot a future

The bottom line of this exercise is that you will find short-term and long-term opportunities and your clients will make you much smarter about your own business.

What are your customers really buying?

September 12, 2008

f you take a closer look at the list of areas for discussion when starting to craft a vision statement, you would notice that our list begins with “customers.”

So what are your customers really buying?

It seems like a simple enough question. Yet it is at the core of designing your marketing and strategy. It requires you to have an in-depth, pinpoint knowledge of what your customers think and feel they are purchasing rather than what you think you are selling. It is from the point-of-view of your customers only that the question is of any value.

Everyone says they have the best, most reliable, highest quality, most complete array of features at the lowest possible prices! No one is out there saying that his product is expensive, narrowly featured, of low quality, and only marginally useful! Since everyone makes the same claims, you can be certain that your customers are not reacting to the claims. Your customers must, in fact, be reacting to something else. Your customers are reacting to something personal.

McDonald’s is not selling hamburgers. Domino’s is not selling pizza. McDonald’s sells speed (fast food) but also fun and nutrition. Domino’s sells time. Your value becomes much clearer – once you’ve looked deeply at what your customers are buying. Yet, making that determination was not as easy as it seems in retrospect, or as you’re about to discover when you participate in this process.

You are about to engage in creating the benefit of your product or service expressed as your Unique Selling Proposition. That proposition should not be trivial. In fact, the more emotionally based or financially based these benefits are, the better. If you can get in both, you’ve hit a home run! Which emotions? Hope, fear, love, happiness, fitness, value. This is where you want to head.

Once you begin to think this way, it will alter how you represent what you do.

I had the privilege of hearing a presentation from two of the foremost business coaches, Jay Abraham and Chet Holmes. Jay and Chet had an interesting way of framing and expressing the work that one does so that its value is both clear and intriguing to the listener.

Imagine that you’re sitting on an airplane and the person next to you asks, “what do you do?” You say, “I do this.” (Sell donuts, clean carpets, etc.) While that is true, it is not what the product is to the buyer. The buyer only buys what the product does for him or her. You want to define what you’re doing in terms of teh best outcome in order to get the response, “Gee, how do you do that?”

You could be cleaning carpets when you sell that vacuum cleaner or perhaps what you really do is this, “I show people how to clean their houses in such a way that they have a perfectly healthy, dust free, microbe free environment.”

“Gee, how do you do that?”

Do you write software or do you “build solutions that change and uncomplicate people’s lives, creates possibilities for them to make them more money than they thought they could make, and allows them to spend more time with friends and family.”

“Gee, how do you do that?”

“I provide people with extraordinary vacations that they talk about for the rest of their lives.”

“Gee, how do you do that?”

If you just say, “I run a vacation resort,” or “I clean carpets,” or “I write software,” people will probably say, “That’s fine.” But, as Jay and Chet said, they’ll also probably wish they never asked and return to reading the airline magazine.


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