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Hear Your Customers

NZ Business, February 1998

Theo Muller


When we talk about customers we think of buying and selling situations. Buying goods in a shop, dining out in a restaurant, filling our car up with petrol, buying an insurance policy or having alterations done to the house, makes us a customer. So does visiting a doctor, having a will prepared by the lawyers or making a telephone call. We may use different words like patient or client, but it is all the same - nothing new so far.

What does take a bit of getting used to is when the City Council refers to its ratepayers as customers, as does the IRD or the Department of Courts. The Collections Department of the Department of Courts is responsible to collect overdue fines. A parking ticket for instance if not paid (after several reminders) by due date, is handed to the Collections Department for... collection.

That makes the offender a customer! An interesting concept though not readily understood or accepted. The very essence of being a customer implies choice. As a customer we have choice where we put our business. The IRD, Collections Department or City Council are not in a position to give us, the customer, a great deal of choice when it comes to paying taxes, fines or rates. Yet they take a customerised approach to their business. The General Manager of the Collections Department talks enthusiastically about his customers and his strategic plan is strongly customer focused. This would not have been the case ten years ago or even less. "You taketh as it cometh", as the adage of that era.


What has happened?

The developed world has experienced a culture change. manufacturers and service providers can no longer seek a sustained competitive advantage in the product or service they provide. As product development takes place with the speed of lightning, the most any product supplier or service provider can hope for in terms of achieving a competitive advantage, is no more than six months before being caught up by his competitors.

Everywhere, manufacturers and service providers are overhauling traditional marketing strategies in order to develop a sustainable competitive advantage. Product or service quality on its own is no longer good enough. If you cannot deliver a high quality standard, you will not be in business. As Professor Nick van der Walt, Chair in International Business at Massey University, Albany Campus states "... very high standards of professional quality are merely a driving licence' for being in the market. On its own quality is not a competitive advantage".

In other words, mere customer satisfaction - the minimum accepted standard - is no longer enough. Customer Delight is where it is at these days. Or, as Ken Blanchard puts it, you must turn your customers into "raving fans".

The concept of exceeding customer expectations is catching on fast in New Zealand and often in places where it is least expected. For example, the IRD will never succeed in turning tax payers into 'raving fans', but it can still become a customerised organisation.

As a tax payer in your relationship with the IRD, you are also likely to be a customer in many other relationships with product and service providers. It is these product and service providers who are 'spoiling you rotten' with personal attention and ever improving levels of service. This has made you a very discerning individual un-afraid of exercising choice. You have high expectations of service. You expect to be treated with courteousy, efficiency and professionalism whether the provider is Telecom, your doctor or your lawyer. You expect product and service providers to go the extra mile whether they are private companies or local or central government departments.

There are many instances of government departments taking a customerised approach. For example, Housing New Zealand's customer focus programme includes six-monthly surveys of its customers. These surveys are designed to solicit the views and preferences of customers on Housing New Zealand's interaction and service provision. They also measure whether features, amenities and maintenance of rental properties meet customers' needs. Housing New Zealand looks at its business through the customer's eyes.

The successful adoption of a customerised business approach depends on three key elements. First there has to be commitment from the senior management to adopt a customer focused marketing strategy. If the top of the organisation does not get fully behind the idea it simply will not happen. The CEO is the inspirer and motivator. He/she promotes the customer with evangelical zest and enthusiasm.

Second there is a need to take stock and find out what customers really think of your organisation - measure your performance and your competitors' performance. Establish benchmarks and develop strategies to improve on those benchmarks. Establish measurable Key Performance Indicators (KPI's) and set goals to improve on these. For instance measure the number of customer complaints received by your organisation and then set out to improve on the numbers. Measure customer satisfaction and customer loyalty. Customer centred organisations do regular customer satisfaction surveys which give them the tools to align their services with customer expectations.

Third but not least important, cultivate customer focused employees. In today's economic environment firms and organisations increasingly adopt a relationship marketing strategy (as distinct from transactional marketing). In relationship marketing the customer interface is much broader involving a large number of what Christian Grönroos calls 'part time marketers': "A successfully implemented interactive marketing performance requires that all parts of the firm (or organisation) are involved in taking care of customers".

In other words, it is not just the sales person's responsibility or front-line personnel to be customer focused, EVERYBODY within the organisation is customer focused. They have to be committed, prepared and informed and motivated to perform as (part time) marketers. "Only committed and informed people perform" (Jan Carlzon -SAS).

In order to succeed there is a need to train all employees in the customerised culture.

Employee training leads to employee empowerment. This may well require a cultural repositioning of the organisation. Housing New Zealand undertook such a repositioning in 1996. Principal features of the cultural repositioning included an emphasis on individual accountability and empowerment (you see it, you hear it, you own it), a holistic view of operations instead of functional segmentation, a focus on leadership, the alignment of personal and corporate values and a clear commitment to customer service.

Housing New Zealand introduced the "Balanced Score Card" as a strategic management system. It translates Housing New Zealand's mission, vision and strategy into a comprehensive set of performance measures across four balanced perspectives:


  • The shareholders perspective
  • Customers perspective
  • Housing New Zealand's internal business processes
  • Housing New Zealand's commitment as a learning organisation


Whilst the "Balanced Scorecard" retains financial management as a critical summary of performance, it also highlights the more general and integrated set of measurements which link customers, internal processors, staff and system performance to the achievement of social objectives and long-term shareholder value enhancement.

Customerisation is not just a new fad. It is a very deliberate strategy for growth and longevity. Even though Grönroos sees Relationship Marketing as "still an exotic phenomena on the outskirts of the marketing map", its effect on the way business is done is likely to be profound.

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