Principle 3: Customer Perception of Value (Item 6)
Providing what your customers value – now and in the future –
must be a key influence in your organization's direction, strategy and
action.
You must manage your customer contact to ensure the contact is made
easy for your customers.
Every organization to some extent manages its relationships with its
customers. However, in the past this relationship had most to do with
the convenience to the business and little to do with the providing
value to the customer. From the customer's perspective, the relationship
you form with your customers is part of the product or service. And
so is part of what the customers consider when they weigh the "value
for money" question.
In managing this relationship, you should consider customer access
– how you make certain customers have easy access to do business
with your business and to appropriate people for assistance when they
need help and when things go wrong. Do you make it easy for them to
contact you and use your business? Or, are you only available to do
business at times and places that are more convenient to you than to
your customers? Is your location good for your customers? Do you use
technology to overcome difficulties with location and time? Can your
customers contact you when they need to do so?
There is often confusion over the words `customer' or `client'. Many
businesses have `clients` rather than `customers'. Others have `buyers'.
This is just different terminology or semantics. If you deliver a product
or service to the person or organization, they are your customers and
you have to provide what they value.
You can call they whatever you like. However, a change of name might
help you achieve a change of thinking. If you have been treating them
as `inconveniences' that `stop you doing your real work', calling them
something else might help. But, unless you fully take on everything
that goes with Principle 3 and have everything about your organization
focused on providing what your `customers' value, just changing the
name you use will be just another useless fad.
Most products and services fit into a chain of products and services
used by a chain of customers. All the intermediate customers and the
end-user customer have different needs and perceptions of value. The
concepts of customers' perception of value apply to each of them. You
must meet the needs and fulfill the perceptions of value of all those
downstream from you.
Consider a retailing example. In a very simple chain, a manufacturer
sells to an importer who sells to a wholesaler who sells to a retailer
who uses a courier to deliver the refrigerator to the end-user. Each
intermediate organization in the distribution chain requires different
things from all the organizations up-stream. Each intermediate organization
will perceive value in a different way. Each will have different dissatisfiers.
The end-user pulls the chain along – by demanding the manufacture's
product for its reliability, features and everything else he or she
perceives is of value.
Most customers do not care about the distribution chain. It is not
included in their value index. However, it is in their dissatisfaction
index – if it does not work. Many companies completely forget that
their customers see the distribution/delivery process as part of the
product/service. The manufacturer must ensure the entire distribution
chain works well. It is a good idea to form alliances throughout this
chain.
Unfortunately, when most businesses think about their `value chain',
they think about `value' in terms of cost and from their own viewpoint,
ie "we machined this part or we added an instruction manual and
the product is clearly more valuable than the raw material". Such
`value-added' may have had little or no relationship with what their
customers `value'.
What of the public sector? The public sector needs taxpayers' money
to do their work. Think of it as the government agency being paid once
each year (in their budget allocation) for all the work they do for
their tax paying customers during the year. If the taxpaying customers
are not happy, the government agency will lose out in the competition
for the tax dollar. All government-funded departments are in competition
for the same tax dollars. Government-funded health is in competition
with the government-funded police force is in competition with the government-funded
education etc. The concept is the same. The mechanism is different and
has been obscured by the government agencies thinking they had a monopoly
and did not have any customers. They do.
Any government department, division, work unit or individual that does
not know who their customers are and is not working to add value to
that customer should be shut down. This may sound harsh, but taxpayer,
they are using your money.
Many government departments or parts of government departments behave
as though they do not have customers. [We found one part of a government
department that did not have any customers. Nothing they produced was
used by anyone else. What a waste of taxpayers money!]
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