“So in the end, we must master our knowledge of who are the target customers, who and what influences them, and how to create highly satisfying customer experiences.” – Philip Kotler

We have been looking deeper into the five questions that Peter Drucker would ask you today if he sat down with you to talk about the organization you lead.

Those questions are:

– What is our mission (or purpose)?

– Who is our customer (core customer)?

– What does the customer value?

– What are our results?

– What is our plan?

In our last installment, we learned about primary and secondary customers. Our primary customers are those customers that we are made to serve. We deliver outstanding value to them and we can do it profitably (if we are a for-profit). 

Our secondary customers are everyone else we have to keep happy to meet our goals (shareholders, employees, board members, secondary customers, communities, governments, etc.).

This week, we will focus on what our customers value.

The question – What satisfies our customers’ needs, wants and aspirations? – is so complicated that it can only be answered by the customers themselves.

The first rule of determining what customers value is this: There are no irrational customers. I know. You can tell me about a lot of irrational customers. But, this is true. Customers almost always behave rationally in terms of their own realities and their situation. They may appear irrational to us, but in the context of their realities and their situation, they are behaving perfectly rationally!

Peter Drucker was known for personally calling a random sample of 50 of his students who graduated 10 years earlier to ask how the school supported their lives. He asked what the school should do better, what they should keep doing and what they should stop doing – and he made these calls to a new sample of students every year.

Too often we assume we know what the customer values but fail to ask. When we do ask, we often fail to dig beneath the surface level answer to find the greater need.

Innovation comes from understanding the deeper level needs of your primary customers. Apple’s customers did not know they needed an iPhone because it didn’t exist. The iPhone was created to meet a need or desire that Apple discovered was waiting to be met.

Revolutionary companies meet customer needs in ways that were never before imagined. Look at companies like Airbnb and Uber. They met a customer need when and how the customer wanted it met.

How can you do the same in your industry?

How To Listen Profitably

Once you decide to listen to your customer, you need to create a plan to do so profitably. Here are the steps to follow:

1. Determine who your primary/core customer is.

Look through your client list. Rank them on three factors. Joy (how much you enjoy working with them); Profit (how profitably you serve them); and Value (how much they value what you do for them). Assign a 1 to 5 score to each factor and sort them from highest to lowest.

Now, look at the customers that received the most points. What commonalities do they share? Think about age, geography, industry, etc. These are the people you serve best. This is who we want to hear from first.

2. Ask the Net Promoter Score (NPS)

The NPS asks this simple question: “How likely are you to recommend this service/product to your friends and family members?” The second question of the survey is “Why?”

Do whatever it takes to get answers from your most important customers. You can try email. The NPS is very effective in email surveys because it is brief. If you use email, give customers the ability to be anonymous (in case they really have some negative things to say), but ask them to identify themselves so you can follow up.

Then follow up. Ask deeper questions and listen well. Take lots of notes. Keep all the notes in some form of customer database so you will never lose these insights. Knowing what was said three years back shows a customer that you care.

After you have the initial results, you can move to focus groups, more individual conversations, whatever works best for you and your customers. Just meet them where they are at and let them know how important serving them well is to you and your organization.

3. Change

This is the hardest part. Once we have feedback, we must act on it and tell the customers who took their precious time to give us their input how we are using their feedback to get better.

Acting on it could mean redesigning processes, it could lead to creating new products or service lines. Acting on what you learned will lead to happier, more engaged customers. Happier, engaged customers lead to happier, more engaged employees who will do a better job satisfying your customers.

Making customers happier leads to happier employees who will make customers even happier. It is a beautiful thing!

Curt Fowler is president of Fowler & Company and director at Fowler, Holley, Rambo & Stalvey. He is dedicated to helping leaders build great organizations and better lives for themselves and the people they lead.

Curt and the team at FHRS help leaders build great companies through Fractional CFO, strategy, tax and accounting services.

To help you on your journey we’ve created some great, free resources. Check them out at www.valuesdrivenresults.com/resource-library/ or give us a call at (229) 244-1559. We’d love to help you in any way we can.