Getting close to the customer. (Checklist 156).

This checklist is aimed at managers at all levels and explores the steps and principles involved in assessing the needs of customers as the basis of any business operation. It focuses on how to find out the needs of customers but does not extend to suggesting ways of meeting those needs.

Management Standards

This checklist has relevance to the MSC National Occupational Standards for Management: Key Role A--Manage Activities.

Definition

Getting close to the customer involves gathering facts and knowledge about your customers (both current and potential), and turning these into an awareness of what customers want from you and how they perceive your organisation and your products and services. This awareness must then be acted on to ensure that you continually meet customer demands and ensure long-term survival and profitability.

Advantages of being close to your customers

Being close to your customers will enable you to:

* be more responsive to changes in demand and in the market

* act on facts rather than hunches or intuition

* develop a product or service better tailored to your target market

* achieve improved sales and increased profits.

Disadvantages of being close to your customers

The advantages far outweigh any disadvantages, but you should take the following factors into account:

* The better you try to get to know customers, the more you risk intruding on their privacy.

* If you are asking a customer to impart personal or valuable information, then you will probably have to offer a reward or benefit in return.

* Customers may resist telling you personal information, and may not always tell the truth.

* Surveys and research can be costly and time-consuming.

Action checklist

1. Examine the culture of your organisation

Closeness to your customers cannot occur successfully unless the culture of your organisation encourages such an attitude. All staff must think `customer first'--staff who are not customer focused in their work may jeopardise the success of the organisation by making inappropriate decisions, failing to respond to changing situations quickly enough or in the right way, or neglecting to serve customers in a way which encourages their loyalty.

If the culture in your organisation does not facilitate the right attitudes, you will need to embark on a programme of long-term culture change to make this possible.

Remember that every section of your organisation has customers. Staff in direct support of external customers cannot provide effective service unless they are supported internally by colleagues along the chain. To encourage internal service departments to adopt an outward-looking customer focus, their operators could work for a week or two in the department they service.

Remember that customer focus must pervade all levels of the organisation. How often do key decision makers and strategy formulators in your organisation deal face to face with customers? A period on the front line would increase their awareness.

2. Identify your customers

Your customers are those who use the output of your work. They may be internal to your organisation (for example, the personnel function will have all organisational employees as its customers), or external (members of the public, other businesses, or government or public bodies). When identifying customers, remember to distinguish between those who pay for your product (for example, the parent who buys the toy), and those who use the product (the child).

In order to get close to your customers you will need to know who they are, and you will probably wish to compile a database of them so that you can create a profile of your customer base. Bear in mind that any recording of an individual's personal details must comply with the requirements of the Data Protection Act 1984.

3. Profile your customers

A wide range of factors influences customer behaviour and choices, for example:

* gender--particularly where the purchaser or end user is not the sole decision maker

* age--with different age ranges being susceptible to targeting by some products more than others

* marital status--especially combined with other factors such as children and disposable income

* home ownership--indicates specific needs and responsibilities which relate to buying patterns

* location--urban consumers differ from rural ones and regions differ culturally and economically

* lifestyle--all customers have individual activities, interests and opinions.

These factors become more useful when information from them is used in combination--for example, home ownership, age and number of dependent children can indicate likely amount of disposable income.

Decide how to approach your customers to find out their basic characteristics. It will probably not be possible to ask every customer individually, but there are nonetheless many approaches to follow, including:

* market research

* questionnaires

* user- or focus-group discussions

* customer audits

* attitude surveys.

Take advantage of opportunities to meet business customers at their premises or at yours in a series of open days or customer care programmes, through partnership situations arising out of new product development, through membership of user groups or industry liaison meetings.

4. Assess your customers' opinions and attitudes

If organisations have an inaccurate perception of customer needs, it is probably a result of:

* assumptions about what customers should think, which might be shattered if tested

* weak anecdotal evidence, where too much importance is attached to single incidents

* atypical complaints, where the opinions of small numbers of highly articulate customers may be accorded too much weight.

If you don't make the effort to find out what customers think, you can be caught off-balance when they go elsewhere. If you don't know why they are going elsewhere, you won't know what alternative actions to take. In addition to finding out basic factual information about who your customers are, you need to establish:

* why customers buy your product or use your service

* how they use it

* what their opinion is of the product or service

* why they choose your offering over others in the market

* what their experience is of the product or service in terms of performance and after-sales care.

Remember that attitudes and opinions are difficult to quantify, and that many factors will influence a decision to purchase or to remain loyal to your brand. Customers may be influenced as much (or more) by their impressions of service--courtesy, promptness, etc--as by the quality of your product. Detailed research will be needed to explore these areas, and if you do not have adequate in-house expertise you may wish to use an external research agency.

Be sure to listen to your front line staff. They will pick up first-hand comments from customers about their satisfaction and dissatisfaction, and you could set up a procedure for reporting this type of information.

Channels usually employed for support and after-sales care can also be used for ascertaining customer opinions by keeping the dialogue open in ways that are meaningful to the customer. Such ways include customer charters, extended warranties, statements (and monitoring) of performance standards, open and willing acceptance of penalties for non-compliance, and return of money in the case of non-satisfaction.

5. Take action on your findings

Analyse the results of your research, interpret the data you have gathered and publicise the findings. Having interpreted your data, you must work out where action is needed to maintain competitive advantage. Make sure that all staff are involved in this process, as everyone must think `customer first'.

Ensure your attention to your customers' needs is long-term. For example, you could set up a regular research project or customer audit, introduce customer suggestion schemes with response mechanisms, or set up a scheme to constantly monitor your market.

6. Consider using the Internet to improve customer focus

The World Wide Web is an interactive medium which is being increasingly used to enable customers to select items for purchase, specify designs, and make comments and suggestions on products and services. The Web is beginning to offer an opportunity to change the traditional relationship between supplier and consumer, putting the consumer in the driving seat--instead of companies marketing to consumers, the Web enables consumers to invite suppliers to make offers for service. Used judiciously, the Web can permit an organisation to get closer to its customers than ever before.

Remember, however, that not all your customers and potential customers will have access to the Internet, so any plans involving use of the Web will have to be considered carefully.

7. Give feedback to customers

Let your customers know that you have taken on board their needs and their ideas. This may mean publishing a new mission statement reiterating your commitment to fulfilling their needs, or it may involve publication of survey results and details of new products or product amendments made as a result of the research.

Feedback is not a one-off event--it needs to be a continuous process, informing customers of reactions to suggestions, mistakes and new ideas, and encouraging further comment.

Dos and don'ts for getting close to the customer

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