Brandt On Leadership -- Nine New Customer Rules

Dec. 21, 2004
If you want to play, you'd better know the score.

These days the most fundamental strategic questions for CEOs and senior executives aren't about technology or e-commerce or talent or stock price. They're about customers. As in, do you know where your customers are? Do you know what they want? Most importantly, do you even know who your customers are? These questions aren't as simple as they seem. Customers are playing by Nine New Customer Rules -- and, more than ever, they have the power to insist that you play by their rules:

  • No. 1: Customers automatically expect the highest level of service and value they receive from one vendor from all vendors. Customer expectations are leaping industry bounds as never before. Even if your entire industry is behind in providing e-commerce, for instance, if customers have a positive e-commerce experience in any industry remotely related to yours, they will wonder why you can't do the same.
  • No. 2: Customers want solutions, not products or services. They expect that you will know enough about them and their businesses that you can deliver a total solution package, of which your product or service may be just a small part.
  • No. 3: Customers expect integrated performance from your value chain. One of the worst customer-service responses is: "It's not our fault." Customers don't care which member of the value chain dropped the ball. What customers want is an answer and a solution from you. If you can't deliver total performance from your total value chain, they'll find somebody who can.
  • No. 4: Customers value information more highly than products or services. In a just-in-time environment, information about your shipment is often more valuable than the shipment itself -- because a missed shipment may shut your customer's operation down. Real-time information about your shipment gives your customer the power to schedule, to plan, and to deliver outstanding service to his customers.
  • No. 5: Customers expect your advice and assistance in running their businesses. Your customers are as lean and harried and overwhelmed as you are. Which means that any help you give -- whether by providing inventory management or marketing research assistance -- will separate you from your competition. Customers likely won't pay you for your consulting expertise, but they'll increasingly choose you (or other partners) on the basis of nonproduct value.
  • No. 6: Customers are everywhere, and expect you to be everywhere, too. As customers rationalize their supply chains and supplier relations, they increasingly look for suppliers that can serve their needs long-term, wherever those needs happen to be. Even small companies need to be planning for how they deliver products and services on a global basis, lest they lose opportunities to those who can.
  • No. 7: Customers are mobile and expect you to deliver product and information where they are. Your customers don't want to sit in front of a PC at work or at home any more than you do. They want to be out on the plant floor, out with their customers, or out on the golf course. How you deliver information to customers beyond the PC -- via the wireless Internet and mobile commerce -- will be one of the most important competitive differentiators of the next five years.
  • No. 8: Customers insist that your company be structured around their needs. Most of our companies are structured for our convenience in managing, rather than our customers' convenience. Forward-thinking companies are radically restructuring themselves into new business models that use technology to align all processes and workflow around specific customers.
  • No. 9: Customers expect prices to decline. As much as things change, some things remain depressingly the same. Customers want more of everything, but they still expect to pay less next year than they did this year. And even less the year after that. Constant innovation and increasing value propositions are the only ways to maintain prices and margins into the future. Not to mention your customer base. John R. Brandt, formerly editor-in-chief of IndustryWeek, is now editorial director of the Chief Executive Group, publishers of Chief Executive and dotCEO magazines.
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