The customer is the king - or queen, if you will. We all know this, but many of us forget it when it comes to developing and executing strategy in practice.
It's on the first page of the business handbook. Yet it's sometimes forgotten when companies are developing and executing strategy: the needs of the customer.
It's strange, really. Because every business or business leader I know knows that the customer's needs, experience and satisfaction determine the future of the business. So why do we sometimes forget the customer perspective?
In my experience, there are several explanations.
- Firstly, it's rarely about sloppiness. Quite the opposite, in fact. A lack of customer focus often occurs because executives, entrepreneurs or business owners get so caught up in their great product that they forget to ask if everything about that product is in demand.
- Secondly, it's about the company not knowing enough about the customer and not involving the customer in the company's development. This means that the company's development is based on assumptions, hunches or anecdotal references that are not rooted in the customer.
- Thirdly, some companies want to sell a product created from a need that the customer didn't even know they had. Here it can be particularly difficult to hit the bulls eye, because you have to know the customer better than they know themselves. And at the same time have an eye for future needs and global trends.
Whatever the reason, a lack of customer focus in the strategy is always a huge risk for any business.
Three concrete tips
Like all strategy work, customer-centric strategy work is about structure. If we work chaotically, the result will be chaotic.
Remember, it's your customers who will determine the future of your business.
Sanne Markwall
My top three tips for stronger customer focus are therefore quite simple:
- First: Involve your customers, start gathering knowledge - and keep doing it. Assess what your customers' needs are today and two to three years ahead. What parameters do they base their choices on - and what would they do if they were sitting in your chair? I've seen a number of business leaders exclaim: "We can't involve customers that much." Yes, you can - and customers are more than happy to help. After all, customers benefit from your company becoming even better.
- Second, map your company's customer segments based on size, types, margins, revenue, loyalty and product types. Do customers demand standard products, customized products or specialized products? It can be tempting to make assumptions here. But take the time to gather and use data. Basing your future on assumptions is often like peeing your pants in freezing temperatures.
- Third: Kill your darlings. If no or very few customers see the value in your unique product, it's not the customers who are wrong or have a problem. It's you! It makes better business sense to adjust or discontinue a product than to waste time and money on stubbornness. It can be difficult because it might be the company's spiritual lifeblood at stake. But that's what it takes. Because remember, it's your customers who will determine the future of your business.
This column was published in Jyllands-Posten business and FINANCE on February 20, 2024.
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Frode Dale
Ceo
Bollerup Jensen A/S
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