Customers and their expectations

Helping clients deliver competitive advantage is one of lloydmasters enduring offers. We know customers are getting smarter – that's the underlying message found in numerous pieces of recent research – and what customers really want are suppliers who fully understand their market and have information that they can share about it. We also know they are becoming more demanding – the rise of procurement as a profession is driving sales people to have to behave in a different way and forcing them to build different and more complex relationships; as a result, selling is becoming much more of a science and less of an art, and organisations are having to constantly rethink customer strategies – both in terms of winning and retention. They are also having to better understand the capabilities they need. And of course this needs to be delivered against a backdrop of increasing cost-cutting in their own organisations.

A useful model, which can help an organisation focus on areas of improvement in terms of managing customers, is provided by Kano. Kano’s model was developed in the 1980s as a result of linking motivation and quality theories. Essentially the model leads us to consider three types of customer experience:

1. Basic – which relates to the quality of service expected, i.e., the must-haves. If the quality is not delivered, then dissatisfaction sets in
2. Performance – which relates to satisfaction received in proportion to the performance of the product
3. Excitement – which is what the customer receives when they discover an unexpected feature or benefit

The model can act as a simplistic diagnostic tool to assess which areas need improving and in which priority. To achieve sustainability of approach, however, it may be necessary to go further and define the capabilities that the organisation needs to have – both in terms of skills and competencies, as well as structure and processes. To deliver the customer service strategy, this capabilities blueprint can then be used as a measuring tool against existing reality, with the defined gap acting as the basis for a plan of action. Using capabilities in this way then ensures a long-term focus for customer service and for sales.

In 2000, a Gallup Survey of over 500 CEOs asked what delivered their most competitive advantage. While 46% stated product and service quality, 44% stated customer service. Such results suggest that regular reviews of how you can improve in this area are probably a necessity, not a luxury.