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What They Want: Ten Myths About Your Customers

To become customer centered and customer preferred, a firm must change its orientation and design its business capabilities, infrastructure, and measures of success from the outside-in by using the customers' perspective. There are several real issues to overcome to do that.
This chapter is from the book

To become customer centered and customer preferred, a firm must change its orientation and design its business capabilities, infrastructure, and measures of success from the outside-in by using the customers' perspective. There are several real issues to overcome to do that. The first is that a firm's current beliefs about its customers tend to drive its policies, decision making, and not only what its employees do with customers, but also what they don't do. This becomes so embedded that firms practice this without realizing it, and it results in great resistance to new ideas about customers when the old ideas are so heavily ingrained.

The automobile company, for example, did not want to hear that customers were more interested in their coffee cup holders than other attributes of the vehicle. "We build cars for driving, not for drinking coffee" was a typical example of how a mindset about customers can filter out and resist hearing ideas or concepts that do not match prior conceptions about customers.

Retail Bank: Let's Ask the Customers

At one of the largest, most successful banks in North America, I sat in the board room with a direct-report to the CEO and a group of other senior executives. They were in a quandary because tens of millions of dollars had been expended on telephone contact centers, yet the volume of calls was growing at such a rate that the capacity of that relatively new equipment would be exceeded in a year or so.

"Who's going to tell him?" asked one executive, referring to their CEO. No one made eye contact. Some examined the ceiling tiles, while other execs scrutinized their feet, apparently concerned that some shoelaces might be loose and in need of tying.

The silence grew heavy. Ultimately, as an outsider, I felt it was okay to fill the void and speak.

"I don't understand the problem," I said. "Didn't you say that if a customer comes into your bank it costs X to handle the interaction, but if they call your contact center it reduces your cost by 90 percent?"

The executives looked back at me. One nodded in the affirmative.

"Then, isn't it a good thing that volumes are growing, because the more you can change customer behavior by providing a desirable, less-costly access channel, the more profit you will make? Don't you eventually want all customer contact to be conducted through lowcost channels, rather than via high-cost brick-and-mortar branches?"

Yes, they agreed, but they still had missed their forecast regarding when the current equipment would no longer handle the volume.

So I suggested that they come up with new reasons for volume to increase on the systems, such as things that weren't being done by the bank back at the time of the forecasts and when they bought the equipment. "Tie the equipment to initiatives that will add profit to the bank and that will be valid, positive reasons the equipment will need to be expanded. Make the additional capacity a good thing, linked to new, added revenue and not merely another unplanned expenditure."

"For example," I continued, "what about using the call center equipment for outbound calls to generate revenue? And what about doing cross-sell with the inbound customers who call you? Both of these would add additional volume and warrant expansion of the system, yet would be financially justified. In fact it would advance your current strategy to migrate customer interactions as much as possible to lower cost channels."

"Out of the question," said a senior manager.

"Why?" I asked.

"Because customers hate to be called at home," he said, referring to my suggestion that their call center equipment be levered as a revenue generator, rather than simply to handle inbound service calls.

"And customers who have called in to us on a service topic don't want us trying to sell them something," offered another executive, referring to my suggestion of cross-sell during a customer service call.

"Always?" I asked, incredulously.

"Always," came the chorus.

And based upon that customer myth, a major firm had invested tens of millions in call center equipment, but only used it as an expense item, to handle inbound customer inquiries as inexpensively as possible. Their belief in their knowledge of what customers want and don't want had caused them not to lever the equipment for other revenue-generating uses—and to never question that decision.

"That is a hypothesis," I said, and then wrote their beliefs on the boardroom flipchart:

  1. Customers do not want to be contacted by telephone. Always.

  2. Customers do not want to receive another offer during a call they initiated. Always.

"Let's test these. Let's ask your customers," I challenged.

A few weeks later, the bank had a new set of customer-focused initiatives based on actual feedback from their customers. A customer vision had been developed, outside-in, of an ideal bank and of the ideal customer experiences during touchpoint interactions with such a bank's telephone contact center. The customer-defined vision caused such excitement that within a week it appeared on a plaque on the wall behind the desk of the CEO, who also directed that it be placed in the elevators of their headquarters. One element of that vision was the customers' view of how the bank could provide great benefit to them by contacting them at home (under certain circumstances, which the customers would highly value). Another was their vision of how an offer of a product during a service conversation (cross-sell) would not only be appropriate, but actually appreciated.

Securing an actionable, outside-in vision of your business from your customer can enable you to stay up with newly emerging needs and wants and to overcome the myths you currently have that impact your effectiveness. I have seen the above phenomenon many, many times. Think about the extent to which you may have similar mistaken beliefs about customers that are impacting your business.

What are your beliefs about your customers—what they want, what they don't want—that drive your business practices and product or process designs? Perhaps these were once valid, but have now changed. Why not ask the customer?

What do you argue about among yourselves as a management team? Is there one group or executive within your organization who believes your customers want/don't want something while another group or executive strongly disagrees? Why not ask the customer directly?

These are all things that beg market research, in order to overcome your mistaken or outdated beliefs. Although there is no substitute for research with your actual customers, to help you get started, we will next look at a few customer myths.

Figure 8.1Figure 8.1. Ten common myths about your customers.

Myth 1: Our customers want the lowest price—period.

A powerful concept to remember is that your product or service offering is rarely a commodity that can only be differentiated by price. The fact is that the savvy business can differentiate even a roll of steel, arguably one of the most rock-solid examples of a commodity. The traditional way to compete with a commodity is to lower your cost of manufacturing, and then lower the price to drive additional sales and "make it up on volume."

Consider how to attract and retain customers on a value proposition other than price: What about their purchasing process? Their accounts payable process? The service they receive? The value-added expert advice that can be given to help the customer better use that product? In many cases these can be leveraged to provide great value to differentiate a firm or product and can often warrant your higher price, although your competitors offer a lower price.

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