Magnifying Customer Focus

By American Management Association

"In today’s hyperkinetic global marketplace, it is easy to forget about the central importance of our customers. With the entire world as our sales region, there is a seemingly endless supply of new customers. Under such frenetic conditions, it’s tempting to treat them as a commodity. Someone will come along to replace the ones we lost, right? Among other facts this global study shows that 75% of respondents believe their company is “good” or “very good” at keeping promises to customers, but only 50% feel they create an emotional connection with their customers. Download the entire report for free today."  

Customer focus is now at the very heart of many organizations. No longer considered just an external entity to be served, customers have found their way into mission statements, innovation efforts, performance measures, reward programs and virtually every aspect of business operations.

In this report, the AMA/HRI team examines what’s driving customer focus, how companies can create a customer-focused culture and what’s likely to change over the next 10 years. Basing its findings on an extensive review of the literature, a series of interviews, and a major global survey, the study identifies today’s most widely practiced customer-focus strategies and imagines how the most successful companies of the future will serve their customers.

The decision to dedicate a comprehensive study to the issue of customer focus was a natural one. It is a topic that has surfaced too often to ignore. In AMA/HRI’s Leading into the Future report in 2005, respondents identified “focus on the customer” as one of the top two drivers of leadership challenges. In AMA/HRI’s The Ethical Enterprise report in 2005, “customer trust and loyalty” was among the top three reasons noted for running a business in an ethical manner. Then, in AMA/HRI’s The Quest for Innovation report in 2006, customers figured predominantly again, being the top reason for pursuing innovation. Customer satisfaction was even rated the top way of measuring creativity and innovation.

Keeping the customer loyal and satisfied could have far-reaching implications for the economy. “Customer dissatisfaction with the quality of goods and services offered in the marketplace is more than a nuisance,” cautions Professor Claes Fornell, director of the National Quality Research Center at the University of Michigan. “The U.S. economy is heavily dependent on increases in consumer spending. Such increases are hard to come by when consumers become less satisfied” (ACSI, 2005).

Customer service and satisfaction is, of course, an issue that knows no geographic boundaries. Globalization, technological advances and a rise in offshoring all contribute to placing products, services and customers just about anywhere. Tackling the complexities of understanding and engaging customers around the world is a tall order for today’s organizations, and the AMA/HRI study brought to light just how challenging it is.

Following is a quick review of some of the Customer Focus Survey 2006 findings:

  • Leadership support is key to customer focus. In fact, it’s the single most widely held strategic action that companies take—and that they should take—to develop and maintain such a focus.
  • Keeping promises to customers is a bedrock belief. It’s not only the most widely held belief among survey respondents; it’s the one with the greatest perceived value.
  • The demands of customers and end-users top the list of factors driving organizations to be customer-focused today. The need to be innovative is another important factor noted—one expected to become even more important over the next decade.
  • Among the top ways that organizations develop and maintain customer focus is through regularly contacting key customers, including customers in corporate value statements, staying aware of competition and quickly resolving complaints.
  • As a rule, global respondents believe that they should be taking customerfocused strategic actions to a greater extent than they actually do.
  • When it comes to communication issues about customers, organizations appear to be better at “the talk” (spreading word of the importance of customers throughout the company) than they are at “the walk” (actually sharing customer data).
  • Customers themselves, and their satisfaction, their feedback and their complaints, are the most widely used methods for determining the impact of a firm’s customer focus program. These are even more widely used than measures such as revenue and market share.
  • A combination of time pressures, budget constraints and fuzzy thinking presents organizations with some of the toughest barriers to attaining higher levels of customer focus.
  • Expecting employees to anticipate customer needs is the most extensively used HR practice, but providing customer-oriented training is the topranked HR practice in terms of what organizations should be doing.
  • Somewhat surprisingly, neither the extent of usage nor the perceived value of certain customer-related technologies was particularly high.
  • Top leaders tend to hold a stronger belief that their companies are customerfocused than do lower-level managers, and general managers tend to hold a stronger belief than do those working in sales, marketing and R&D.
  • Organizations operating in only one country tend to see themselves as more customer-focused than do multinational and global firms.
  • For global or multinational organizations, the ability to meet local requirements and competitive factors are the top international customer-focus issues. 

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