For a business model to be successful, it should anticipate customer problems and be designed to specifically address customer needs. While it may seem obvious that every business should strive to anticipate customer needs, your organization should be deliberately designed to find ways to proactively solve their challenges.
After one company experienced early success in selling its mechanical equipment to business customers around the world, it considered what problems its customers might encounter with their new equipment. For example, how could questions from new customers be quickly resolved? Or what would happen if a software glitch or mechanical problem occurred outside of standard U.S. office hours? The company determined its competitive strategy would be to create customer experiences that would satisfy customer needs and build loyalty.
First, company leaders determined to simplify life for its customers by providing the highest possible level of technical support. Innovative systems were designed, and training was provided such that the company’s technicians could interface remotely with the computer systems controlling the operation of the equipment anywhere in the world. With that capability in place, the company then set up the necessary organizational capabilities to provide 24/7 technical support, with technicians available and able to immediately perform remote diagnostic testing of the equipment’s systems. As none of its competitors offered this level of day-and-night service, the company soon found itself with a huge network of loyal customers and experienced tremendous business growth, quickly becoming a global leader in its industry.
As I have seen with some clients, while strategies are being adapted for new marketplace realities, the organizational capabilities needed to achieve the strategies tend to lag. Ultimately, organizations must be well aligned and have capabilities in place to absorb certain complexities and simplify life for their customers. The ability to deliver differentiated offerings and to give customers what they need – before they know what they need – starts with a strategic opportunity and effective Alignment Leaders®.
Why looking ahead is so important
Often, customers are unwilling or unable to express what they need or why they are having a specific set of problems. While directly observing a customer’s activities may provide some insight, we are typically just seeing what is happening right in front of us, rather than understanding the root cause of the difficulty. If we truly want to be the best at solving customer problems, our organization will need to actively employ the necessary foresight to discover the cause of customers’ needs.
The online publication Marker noted that in 2012, the online travel giant Expedia found that 58 percent of its travel bookings resulted in a call to customer service for assistance. Expedia’s call center had been managed for efficiency and customer satisfaction and staffed with customer service representatives who had been trained to make each customer happy in the shortest amount of time (preferably less than two minutes). No one had really considered the fact that it might have been possible to prevent the need for customer assistance. Looking further upstream, Expedia leaders found that the No. 1 reason customers called was to get a copy of their itinerary. Further probing revealed that while some customers were experiencing simple user issues, Expedia’s website, in fact, did not provide an easy way for customers to retrieve their itineraries. With this information in hand, Expedia assembled a “war room” with the express purpose of developing the necessary website improvements that would eliminate the need for most customer calls.
Unfortunately, unlike Expedia, many companies struggle to deliver because they fail to change how they operate or become focused on making things easy for those inside the organization. It is more simple to focus on improving efficiencies and internal productivity requirements. However, that tends to create happy internal users but frustrated external customers.
Four ways to incorporate looking upstream into a successful business model
- In-Depth Research: What do your customers value in their interactions with your company? Identify needs by conducting in-depth research across your industry and by asking specific questions about customer problems. Gathering these details from your customers will allow you to understand who your customers are and their value points.
- Distinctive Delivery: Not all customer touch points are the same, and some value points have greater strategic value. Discerning which value points should be driven for efficiency and which ones should be driven for effectiveness is key. Once you understand what the customer wants or needs, ensure that you can deliver those services or products in a unique way.
- Organizational Alignment: Align your work activities, reward systems, metrics, culture, and structures to this strategy and operating model. This alignment approach is not a quick shuffling of the organization chart, but it is a thoughtful (and in some cases, ongoing) effort to holistically align the entire organization and the related processes, systems, structures, metrics, rewards, and talent.
- Innovation: Keeping an eye on future trends that are likely to influence your customers’ lives will help you anticipate what they are going to need – and prepare to offer it to them as soon as they need it. When your business model delivers the right innovation because you have correctly identified customer wants and needs, you will have more customers, sell more products and services, and generate a loyal following.
Every customer wants to be pleasantly surprised. Success in today’s marketplace requires a high level of understanding your target customers and meeting their wants and needs in distinctive ways. If you develop a strong, well-designed strategy first, then structure your organization accordingly, you will have a productive, efficient, aligned company that benefits employees and clients alike. As your organization better understands customer problems and is correctly aligned to meet their needs, you will achieve greater growth and profits and deeper loyalty.