“There is only one boss — the customer — and he or she can fire everybody in the company by sending his or her money somewhere else.” — Sam Walton
Sam Walton, founder of Wal-Mart, understood the power of the customer in today’s marketplace. Customers are becoming more powerful as they become increasingly more discriminating about where they purchase products and services.
If you want to keep your customers, I urge you to implement one basic business strategy: Focus on your market. This means taking customer focus to a higher level and having a company-wide strategy that is both customer-focused and market-focused.
Specifically, you need to understand your customers’ needs and wants better than your competitors do, and provide customers with superior products and services. To do this, you need to:
- Gather information about your customers and your marketplace.
- Communicate the information you collect to your managers and employees.
- Respond to what you’ve learned by responding to the markets’ needs.
Most companies perform these basic business activities, but few do so in a formal or systematic way.
Information your company needs to make strategic decisions includes more than just raw data on customer needs and wants. Most likely, you already gather a significant amount of customer information in meetings and discussions with customers and distributors, sales reports, databases, etc.
You should also study environmental factors like government regulation and policies, technological changes, competitors and their activities, and future industry trends. Sources include trade publications, industry events and your local network.
Intelligence gathering can be broad or specific, depending on your company and budget. The key is to gather information that is comprehensive, but also relevant and usable to your company.
Share What You Know
After you have what you’re looking for, what do you do with it?
The information you gather should be regularly compiled in a usable form and then shared with employees in various ways, from informal hallway meetings to a customer and market database.
Other information-sharing vehicles include:
- Periodic newsletters
- Management lunches
- Internal message postings
Intelligence needs to be communicated clearly, continuously and appropriately so that your staff can strategically respond to the needs of the market.
Increasing Market Focus
Responding to your market is the critical last step to being market focused. You can generate information and communicate it internally, but unless you respond to market needs, nothing will have been accomplished. Your company should be driven by an understanding of what your customers want, the knowledge of how to meet their needs, and delivery of the product or service they want.
Studies show that companies that link these activities together achieve greater levels of performance when compared to their competitors. A company that increases its market focus by 10 percent will see growth of between 17-20 percent in overall performance.
In other words, by being market-focused, you will provide superior value to your customers, which will result in improved performance for your organization.
Vistage associate Erica Olsen is principal of M3 Planning, based in Reno, Nevada.