It was Sam Walton who said:

“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”

Yet it’s surprising how many companies have evolved into organisations where the customer is the least important person in the organisational set-up.

And as Walton’s creation, WalMart, goes from strength to strength, one of its chief competitors, KMart, earlier this year slid into bankruptcy. The difference between the two? At the end of the day, ‘customer focus’. WalMart has over the decades been able to understand what its customers want and when, while KMart has had to depend on endless discounting and price wars to lure its clientele.

‘Customer Focus’ explained

All companies go through cycles of growth. Behind this cycle there is a deeper pattern which the graphic below shows, where the nature of this growth changes the company focus from the customer (entrepreneurial stage) through to the company (mature stage).

If a company lets this progression continue, then it will lapse into decline (the final stage).

‘Customer Focus’ seems a concept most companies would seem to want to maintain. Yet, to a greater or lesser degree, as they grow their focus does become more internal and, as a result, customer service and the customer offering suffers, in turn affecting sales, profitability and revenue growth.

Customer Focus impacts the Customer Experience

The key differentiator between companies is less and less in the product they sell, or the service they offer, but in the experience their customers receive.

If a company’s focus is internal, the chances are that the customer experience is either haphazard or neglected. This kills customer loyalty, and with it, sustainable long-term growth.

Companies may try to address this by creating processes, checklists and competencies, but these gambits usually exacerbate the situation. Processes themselves are inside-out (company driven) not outside-in (customer driven). The fact is that processes are a poor substitute for a heart.

Intangibles galore

This leads us to the realisation that much of the competitive differentiation between, say, service provider A and service provider B, boils down to whether you like the person serving you and the way he or she does so.

This difference is emotional, and, since emotions seem so slippery, so difficult to manage, companies try to ignore them or replace them with ‘rational’ measures that have no correlation on the desired emotional outcome (like processes for example). This is something like trying to hammer a nail with a screwdriver – it simply cannot work.

But these intangibles go on being intangible, and adding or subtracting vast amounts of money to or from a company’s top line. So what can companies do?

Experiences can be created

It’s interesting to note that experiences can be created, measured, and managed. Numerous companies globally are doing this right now. One thing these companies all have in common is that they are outside-in, not inside-out first. Their management teams have made a conscious effort to start with the customer experience and work backwards. Thus, in spite of reaching ‘maturity’ in the graphic above, they have been able to move their focus  where it belongs – with the customer.

How to get your customer experience started

If you would like to find out more about how to discover the source of differentiation your company offers in its customer experience, then participating in our one-day Customer Relationship Maximisation programme is a great way to start.

In it you will discover how your company is really connecting with your customers at all its touchpoints, which emotions typically evoke which kind of behaviours (such as customer stay, say and spend) at the moments of truth, and the elements of experience industry leaders are able to create.

You’ll not want to miss it!