Last week we looked at a programme of activities for the implementation of a plan. This week we take a different tack and look at the whole area of customer needs, and start by looking at products, their features and benefits.
In the exchange process which happens whenever an organisation and a customer carry out a transaction, the customer receives not just a tangible good or service but a way to solve a particular problem or fulfil a particular need. People do not need 5mm drill bits; what they really want is 5mm holes. The drill bits are merely one way of getting 5mm holes.
In fact, we could say that people do not really want 5mm holes: they probably want the means to attach something to a wall, and the holes are necessary to achieve this. People do not want washing machines for decoration, but because they want clean clothes and a washing machine is one way of obtaining them.
Taking clothes to a launderette is another way, as is taking them to a cleaning company. Whatever products they choose, people buy them in order to achieve something, not for their own intrinsic beauty or appeal.
Of course, people buy pictures, ornaments and other decorative items for their intrinsic appeal, but even these are often fulfilling other needs or desires, such as decorating a house to provide a particular environment or atmosphere. Other items may be bought as an investment, or because the purchaser feels they say something about him- or herself to friends and relations.
The academic Kotler has deﬁned a product as follows: "A product is anything that can be offered to a market to satisfy a want or need. Products that are marketed include physical goods, services, experiences, events, persons, places, properties, organisations, information and ideas."
This concurs with our idea that the reason for a product’s existence is to satisfy a want or a need, and also stresses that the term ‘product’ covers anything that is offered by an organisation in exchange for something that a customer has. This idea of exchange is apparent in the definition by Dibb et al.: "Everything's both favourable and unfavourable that is received in an exchange. It is a complexity of tangible and intangible attributes, including functional, social and psychological utilities or benefits."
Here we have the interesting view that customers might get something they do not want in the exchange. At a simple level, this might be because, for example, they buy a particular washing machine but use only three out of the 30 programmes available. There are 27 which are unnecessary or unwanted.
At a more complex level, the customer might buy a car which is sporty and fast and looks beautiful, but comes with a very small storage space. However, they are prepared to compromise because the benefits outweigh the disadvantages.
Dibb et al. emphasise that a product can be a combination of both tangible and intangible elements. If we accept that anything that is sold is actually solving a problem or satisfying a need, then any commodity, even a tangible one, will have some intangible benefits attached to it.
It is important to recognise that the nature of these intangible beneﬁts will depend on the perception of the customer. For example, one customer might describe an estate car as slow, heavy to handle, ugly and having high petrol consumption, whereas another would describe it as spacious, with lots of room for children and luggage, safe, comfortable and costing little to service.
This emphasises the importance of understanding who your customers are and what they want from your product, that is, what problem they are trying to solve. This definition also points out the complexity of a product and suggests that it is made up of a number of attributes.
Next week we will look in more detail at how we can identify the different attributes within a product and how to use this knowledge to develop a product which will be attractive to customers.
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Last week we looked at reviewing objectives and developing strategies. This week we continue to look at a programme of activities for the implementation of a plan.
On a smaller scale, there are lots of things that can be done to foster a customer orientation among staff:
The failure of many organisations to satisfy their customers rarely occurs because they did not know what they should have been doing, but because they never put it into practice.
Sometimes the gap between excellent plans and what actually happens is so great that the organisations themselves fail. The path to customer orientation is littered with the career hopes of managers who believed in it but never got round to doing much about it.
For the purpose of your personal action plan to improve customer satisfaction, what matters is that your approach to customer orientation is permanently built into your role and agenda.
We hope that one of the messages of this blog so far has been that you do not think about your customers only at some special occasion or annual planning stage, but that their needs are always in your mind, shaping your priorities and actions.
We have been deliberately positive about the difference you can make to customer satisfaction. We have considered the other orientations that customer orientation has to compete with in reality. We have provided you with a framework for a personal action plan to help you achieve increased customer satisfaction. We hope that you share this genuine belief that you can make a difference.
Last week we looked at an example of a manager trying to reduce the number of complaints about the financial reports their department produces monthly for managers throughout their organisation.
This week we look at reviewing objectives and developing strategies...
This is the point at which an organisation commits itself to achieving its objectives by developing appropriate strategies. (The four Cs framework may be useful here.)
This stage of the planning process flows directly from the SWOT analysis. Similarly, from the perspective of your personal action plan to improve customer satisfaction, what you do in the first three stages (see Figure 4.3) should help you clarify what it is appropriate and feasible to aim for. You may find you need to look again at your original objectives in the light of the audit and the SWOT analysis you have carried out.
This is not unusual. We will look at the programme of activities in a moment. However, sometimes it is difficult to see the distinction between objectives, strategies and the programme of activities.
You may come across a number of different names for a programme of activities: some people call it tactics, others call it plans. The choice of word is not important; what is important is the meaning attached to the words, and the stage in the planning process when these programmes or plans are put together.
It may be helpful to think of them in this way:
There is no point deciding on your means of transport (your programme of activities) before you have decided on your route (your strategy), and equally you need to know your destination (objective) before you can work out the route (strategy).
Each is important, but there is a sequence in their development. This does not mean that you cannot revise your strategy in the light of what is feasible in your plan; however, you should see that it is important to consider these in the order given here if your overall objective is to be achieved.
The following activity forms a central component of this session's aims. It builds on the three stages above and uses the four Cs framework to help you define the objectives you could set for improving customer satisfaction in your own organisation, and what strategies would help you achieve those objectives.
The programme of activities
The programme of activities sets out who will do what, when they will do it and how. Budgets, processes and structures need to match the programme of activities. Detailed programmes of activities form the important implementation part of a good plan.
For the purpose of your personal action plan to improve customer satisfaction, what matters is to take account of the fact that you cannot improve it completely on your own. You will need to talk to, work with and influence colleagues.
We can interpret this component of the plan to mean the process of deciding whom you will need to work with to achieve the objectives you set. An important aspect of this part of the process is helping to ensure that a customer orientation is developed. Organisations become responsive only when their front-line employees become responsive, as the following example shows:
Them and us
An architectural and design practice was worried about the number of companies that had terminated their work with the practice. So the managers organised two surveys. The first was of 36 staff working in 11 organisations which had stopped using the practice. The other was with the practice’s own 150 staff.
The results shocked the managers, who had clearly failed to foster a customer orientation in their staff. Staff perceptions of what the practice was good and bad at were completely at odds with the perceptions of the customers’ staff. The staff’s understanding of customers was poor partly because they rarely met them. This, combined with the managers’ practice of keeping the staff in the dark, contributed to an attitude of 'why should I care?' on the part of the employees.
Now, after a fundamental reassessment of management styles, the staff have been given the responsibility, the authority and, most important, the information they need to respond to the customers' problems. This has increased customer satisfaction and employee morale, and has led to increased business.
Last week we looked at the third stage of keeping in touch with your customers, namely responding to information.
This week we look at an example of a manager trying to reduce the number of complaints about the financial reports their department produces monthly for managers throughout their organisation.
The manager might do a SWOT analysis for the department. In this SWOT analysis we can see that the strengths and weaknesses relate to the department — those areas which are internal to the department and affect the way the tasks can be carried out.
The opportunities and threats relate to the wider organisation environment — those aspects which are external to the department. Again, the factors which are included here are those which are considered to have the greatest impact on the department's ability to achieve the objective of reducing the number of complaints.
Whenever a SWOT analysis is drawn up from an audit, it is important to make sure that the definition of what is internal and what is external is clear. For some people, internal will mean what happens within a department; for others it may be what happens within a unit or even within a whole organisation.
External factors will also vary from context to context. Sometimes they will include the environment outside an organisation, sometimes the environment outside a department but within its organisation.
There are two further things to note about a SWOT analysis before we move on to look at the next stages of the planning process.
Many organisations carry out a SWOT analysis but then do not use it in the development of strategies. In fact, an analysis can be crucial in the development of plans that are appropriate to the environment and feasible, given the current situation within a department.
Constant reference to the SWOT elements will lead to plans that can be implemented. It will also highlight areas where resources are available, and areas where extra resources are likely to be needed.
Organisations need to make and state certain assumptions about the future. These assumptions will be based on the information about their customers they have acquired, disseminated and responded to (Stages 1-3 discussed earlier).
The assumptions need to be realistic. For example, it would be no use if the manager of the finance department in the example above assumed that the organisational structure would stay the same, as the new Managing Director has informed him that there will be changes.
Assuming no change in this case is likely to invalidate any plans that the manager makes. Assumptions also need to be based clearly and explicitly on information available, so that others can understand the reasoning behind the development of any plans. Assumptions may also need to take into account the availability of resources in the future.
Next week we’ll look at reviewing objectives and developing strategies...
Last week we looked at disseminating information, and how dissemination works upwards, downwards and sideways. This week we look at the third stage - responding to information...
Stage 3: Responding to information
Making practical suggestions to colleagues and your own managers is an important way of responding to information. Another is to bring information about customers' experiences to any regular or special team meeting or briefing you may be responsible for, so that your team can consider together what this may mean for how they work.
This can be a particularly useful way of focusing on customer orientation if otherwise your meetings tend to be dominated by expositions of new senior management edicts or policies or the discussion of operational problems.
Finding out about your customers and the environment is time-consuming and you may feel that you are wasting time finding out rather than doing things. However, unless you spend this time, the things you do may not be the right things, or not the things that will make the most difference to the satisfaction of your customers.
So far, we have talked about being curious and finding out about customers, without providing any structure for this. One way of trying to ensure you have covered everything is to start with your department and consider the products it provides to customers, to employees, and to the organisation's structure, technology and systems.
You should then consider customers and all the contact points for them with your department. Being curious and finding out about customers should provide you with a view of the strengths and weaknesses of what you do. Looking more widely at your organisation should provide you with the context for your own department's activities.
It should also reveal what opportunities might be available, and the possible threats to your success. You may also need to consider what is happening outside your company in the wider environment.
For example, are there any changes to laws that might affect you, or changes in technology? Perhaps society is changing in the way it responds to your products or the demands it makes of your organisation. These areas also need to be considered.
The SWOT analysis
A SWOT analysis is the assessment of an organisation's or department's activities, and the strengths and weaknesses in them. The strengths are then matched to opportunities evident in the audit and the weaknesses to threats identified there.
A full SWOT analysis is a major strategic process requiring techniques beyond the scope of this session. However, it is still a useful tool for incorporating customer-oriented thinking into your management.
For the purpose of a manager trying to enhance customer satisfaction, the key is not to be ambitious when using SWOT. Whether you manage a team, a project, a department or a small business, SWOT is a proven framework for categorising your thinking about what is working (and what is not), and what is changing in the interface you have with your customers.
A danger with SWOT is that it encourages long lists of wishes and constraints that remain the same year after year. It is therefore important to focus on the areas that are within your control or that you can influence.
The framework can be particularly useful whenever you review and plan what you do as a manager. It could be an insightful part of preparing for team away-days, annual appraisals and target-setting processes.
Next week we’ll look at this in an example of a manager trying to reduce the number of complaints about the financial reports their department produces monthly for managers throughout their organisation...
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