Does the attribute that made you different and better in 2000 still make you different and better next year and beyond?
These last six months, I have been busy doing Customer Feedback Surveys for clients, anxious to measure their performance from their customers' perspective, both in absolute - and competitive terms. Being long-term clients enabled us to track satisfaction levels from one survey to the next and reassess their competitive position.
These surveys have yielded some highly significant results - here is a small selection.
- The Market Split
In the space of eighteen months, one company's market has split into three segments. My client used to own the whole market. Despite the continuation of customer satisfaction levels of a very high order, my client is faced with some key strategic decisions. Making the right ones will have a major impact on the company's future. But it is debating the options with highly accurate data at its disposal.
- Drop What You Can't Service
Feedback from a previous survey indicated that this company really struggled to satisfy the needs of one segment of the market. My client's business model was simply not appropriate to meeting the needs of the customers in this segment. Wisely, it withdrew from this segment and focused its resources on others. The latest survey confirmed the correctness of this decision but also identified and quantified a continuing problem in execution that my client thought had been rectified.
- The Competition's Catching Up
No change in customer satisfaction levels - but major changes in my client's competitive position. It used to enjoy a competitive advantage in the quality of the service provided and in its quality of customer support. My client hasn't got worse - but its competitors have got better. They have realised that if they are to compete with my client, they need to improve their own performance - and they have done this. It just proves the axiom that it's easier to get to the top than it is to stay there. So what does my client do now? That's the $64,000 question.
- The Competition's Up To Scratch
Another client's very sophisticated IT system gave it an important competitive advantage. The latest survey showed that that advantage is under attack. The question asked in the survey was whether the quality of my client's IT systems were better, same or worse than those of the competitors that the respondent was using. "Quality" was defined as "IT systems that make life easier for you". At least one of my client's competitors has a more user friendly system. It's not remotely as sophisticated as my client's but it has one major thing going for it. It doesn't require double entry.
The one common denominator in the feedback is that the business environment in all cases has been subject to significant change - whether it's the impact of the GFC on demand, changes to the hierarchy of customer needs, market fragmentation or new competitors - both direct and indirect.
There is a continuous need to monitor and measure the progress on the implementation of the strategic plan to see what's working and what's not. If the objectives of the plan are not being achieved, then the cause of failure must lie in one of two areas:
- Either the execution is not up to scratch, or
- One - or all - of the assumptions on which the plan was founded no longer hold true
Frequently, of course, it's a combination of both. It's my experience, however, that the majority of companies look to deficiencies in execution rather than any in the plan itself and thus embark on a program to treat the symptoms rather than investigate the causes. As Pogo - the comic character created by cartoonist and animator Walt Kelly once said - "having lost sight of our objective, we redoubled our efforts!"