Understanding Your Customers

Steve Williams, The Right Approach Consulting LLC | 04-16-2018

Introduction

Understanding your customers may seem like a no-brainer, but conversations with company leaders across various industries the past five years have demonstrated to me just how difficult this can be in practice.

ISO Can Help

One of the newest requirements to both ISO 2015 and AS9100 2016 is expanding the whole concept of who is a customer. The traditional definition of a customer is an organization that pays us for our product. The new requirement is to define the interested parties to the business, and to identify their needs.

Interested parties are defined as any party who has an interest in how your company performs. This includes traditional customers, but also adds parties such as owners/stakeholders, employees, suppliers, banks, and the community. Only parties that have an interest in how your company performs and impact the QMS need be examined, although this should be a very short list. As I preach to my clients, a “B” can be functionally swapped out for the “Q” in QMS, as it is actually a business management system for the entirety of the organization.

How can this help? Excellent question, because any requirement comes with the expectation that something must be done. A simple analysis at the next management review meeting will suffice, using a tool such as my Interested Parties Worksheet (Figure 1). Refreshing this activity then becomes an annual exercise.

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Figure 1: Interested Parties worksheet.  

What do customers want?

What customers want is very simple. They want the core product or service of your business to meet their needs and expectations. If you are a PCB manufacturer, they want a board that works, delivered on time, at a fair value for their money. So, if wanting stuff that works, when you need it, is not an unreasonable expectation, then why are consistently high marks for customer satisfaction so difficult to reach and maintain?

Because customers expect these things, they are called order qualifiers, or in other words, the price of admission. Satisfying these core areas will not create loyal customers or cause them to tell others how good you are. However, if you don’t meet these basic objectives, they most certainly will tell anyone who will listen how bad you are.

Order winners, the things that will drive loyalty, additional business, and turn customers into your best sales people, are the little extras—things that most companies fail to either realize, or don’t place as much value on. The following are a list of things that your customers really want that will turn them into fans for life!

Customers want:

 

 

Internal Customers

This list of what customers want applies just as much to internal customers as it does to external ones. Internal customers are the most overlooked and underappreciated group of interested parties of all. Internal customers can be found in every function of the company: the customer service representative that hands off the new order to their production customer, the drilling department that provides panels to their plating customer, or the quality department that services a plant full of customers.

Every single person in an organization is both a supplier and a customer. Understanding the needs of internal customers is just as important as understanding the needs of your paying customers. How you treat your internal customers will have the same positive or negative impact on your relationship as with your external customers.

Perception is Reality

Whether measuring satisfaction to your internal or external customers, you have to look in the mirror and ask yourself, “Am I measuring my performance accurately?” (Figure 2) How many times do we see a company promoting itself as being a world-class manufacturer of widgets, or as having been voted best-inclass in customer service? Who voted? Again, the “truth in advertising” dilemma. What often happens is a Dilbert cartoon in the making; a group of senior managers get together and declare, “You know, we do a pretty respectable job in our business; let’s begin marketing ourselves as world-class.”

I recently had this very discussion with some friends regarding customer service at automotive dealerships. During checkout after some recent mechanical work, the agent told me that

I would be receiving a call from the customer service department with a quick phone survey regarding my experience. He then said to me, “The questions will be on a 1−5 scale, and if I receive anything less than a 5 on a question I’ll catch hell from my boss, so I would really appreciate 5s across the board.” One thing is for sure: whether you give the kid all 5s or subconsciously rate him harsher than you should, the survey is tainted. Makes you question all the customer service awards hanging on the showroom walls!

What is value?

In understanding our customers, one of the first questions that needs to be answered is “what are we providing that is of value to our customers?” And the first mistake that organizations make is trying to answer this question themselves. This question can only be answered by the customer (remember the whole perception is reality thing?) and any answer that is not directly correlated to customer input will not improve your ability to satisfy the customer. Understanding a customer’s needs goes far beyond product and features; it includes a variety of subjective attributes such as service levels, key customer satisfaction drivers, and the degree of perceived value from your core business activities.

Organizations spend a great deal of money in time and resources on strategic planning to develop the short- and long-term goals that will guide the company going forward. It never ceases to amaze me how often these goals and plans are developed without any input from the customer base. Most senior-level planning sessions are bottom-line focused, with most of the discussions being focused around revenues, balance sheet results, head-count, forecast, etc. Make no mistake: I fully appreciate the need for a bottom-line mentality at the senior management level, but equal time needs to be granted for the underlying foundation that directly affects these numbers: customer satisfaction.

When the discussion does turn self-reflective, questions like “What do we make?”, “What market are we in?” and “Who are our customers?” are staples of American management strategic planning sessions. Missing are questions like “How do our customers see us?”, “What products and markets do our customers want us to be in?”, “What do our customers think we do well, and more importantly, not do well?”, and “What about our internal customers?”

These are the questions that need to be not only answered, but acted upon on a regular basis for an organization to be able to achieve a quantum leap in their level of customer satisfaction.

Sage Advice

Many companies tend to become complacent over time, especially if they are at the top of their game. I remember having a rather animated conversation many years ago with my good friend Will Rogers about the challenges of understanding and meeting customer needs. My friend Will always had a way of breaking down a complicated situation into its most basic form, and we were discussing the false sense of security many companies have about how happy they feel their customers are. And in his typical, plainspoken way, I think Will hit the nail on the head when he told me, “Steve, if you’re ridin’ ahead of the herd, look back every now and then to make sure it’s still there.”

Steve Williams is the president of The Right Approach Consulting LLC. To read past columns, or to contact Williams, click here.

To read the February 2018 issue of PCB007 Magazine, click here.