Commentary on the Quest for Customer Focus

Commentary on The Quest for Customer Focus

Many companies have invested in CRM systems in their quest to get close to their customers. However, getting closer to customers requires not only technology and tools but also an organization-wide journey of learning new ways of thinking and acting. In the article, Gulati and Oldroyd illustrate a journey of four stages with the obstacles and essential changes along the way.

Authors explain that 17 diverse companies all took a very similar passage to their destination of becoming more customer-oriented. Customer-focused companies such as Continental Airlines and Royal Bank of Canada followed a meticulous four-step process begins with communal coordination, proceeds to next stages; serial coordination and symbiotic coordination, and complete with integral coordination. Communal coordination involves the creation of a central customer information repository. In the second stage, serial coordination from neutral centralized IT through analytical experts and on to the business units enables firms to draw assumptions from the accumulated customer information. The stage three, symbiotic coordination, requires shifting the focus to future behaviour of customers from past interactions. Lastly, at the integral coordination stage, companies focus on bringing a more sophisticated understanding of customers into all daily operations.

These companies recognize three essential concepts: learn about individual customers and their past, current and future needs and behaviours; this information is worthless if employees do not or cannot share it; and use this customer insight to design and deliver its products and services, and shape the organizational structure and strategy.

Successful customer-orientated companies like General Electric (GE) constantly endeavour to find new ways of managing the flow of information about their customers. Among other things, after collating and analyzing over a decade of customer information, GE created a method for forecasting the future demand to ensure items with long lead times and the most sought-after items are never out of stock, whilst reducing inventories for slow-moving products. As a result, the company has been able to send out 95 percent of its orders on time.

Customer-driven companies are evidently more successful. Therefore, today's salespeople must be strongly customer oriented. They need to be able to develop meaningful customer relationships focusing on customer benefits and needs. People may feel disadvantaged or unappreciated for their loyalty to the company. In some cases, sales firms are preoccupied with big customers and neglect revenue generating loyal customers. If companies aim to be truly customer orientated, they must focus on customers' needs and wants not just increasing shareholder value.

Salespeople should be given the necessary autonomy, latitude and resources to focus