6.0   News from Wisconsin

Joe Hilderbrandt and 'Sandie' Pendleton author a commentary for the Milwaukee Business Journal on Wisconsin's elected state leaders, who 'are starting to understand and aid the new Wisconsin economy'. But, they add, there is much more that needs to be done: http://www.nasvf.org/web/allpress.nsf/pages/9095

7.0   News from Illinois

A venture arm of the University of Illinois finished raising its first fund this week, a $20 million private pool to invest in high-tech start-ups around the state. Barbara Rose reports in the Chicago Tribune that the Illinois Emerging Technologies Fund is a milestone in efforts to boost the university's standing as a place where innovative ideas move from laboratories into the marketplace: http://www.nasvf.org/web/allpress.nsf/pages/9214

8.0  Building Customer Based Competitive Advantage

Successful organizations strive to attain and maintain competitive advantage. Where an organization chooses to pursue competitive advantage, is a key strategic decision. The most common organizational strategies today involve customer and market focus. Unfortunately, this is where execution of business strategy has been the most challenging. This article provides insight to the growing desire for customer focus and why early leadership in this area is so critical.

In concept, customer focus is nothing new. In reality, it is no longer a well maintained rolodex. For firms with overlapping markets, changing products and autonomous units, it is an improvement process bringing an organization closer to its potential. True customer focus creates the optimal framework for resource allocation.  It does so by providing an execution protocol based on real-time customer and market intelligence for:

·        identifying targets with confidence

·        capturing prospects earlier

·        acquiring customers more quickly

·        optimizing margins consistently

·        driving desired-customer retention

·        increasing lifetime value with loyalty

·        managing with fact based measures

Driving market or segment leadership demands an increasing awareness and alignment with the changing needs, options and performance expectations of customers. The target is not only difficult to see at times, it’s moving. All the while, customers are improving the rate and accuracy by which to measure and compare current performance to the alternatives. The result is a more efficient and effective marketplace demanding more predictable, sustainable relationships encompassing product, delivery and service. The growing performance gap is perceived to be a substantial operations hurdle by many organizations while the future market leaders see substantial opportunity.

Considering the potential benefit, it’s no surprise the market has been developing possible solutions. Customer relationship management (CRM) has been given the responsibility of capitalizing on the customer focused opportunity.  Unfortunately, CRM is synonymous with software so the decision needing to be made has been relatively simple…which CRM?

Organizations are customer focused by nature. People are relationship focused by nature. Leadership is management focused by nature. When viewed from each of these perspectives, customer relationship management seems like a simple concept provided by technology. In practice, these varying perspectives create much of the complexity and explain why the customer perspective is so often overlooked. In fact, most CRM deployments completely lack a customer or employee perspective.

Is customer focus worth the investment? Common sense tells us to listen to our customers and use the combined resources of the organization to first set and then slightly exceed expectations. The organizational benefit resides in shorter cycles of customer alignment creating fewer and less noticeable gaps for the competition to exploit. These cycles are improved within the processes supporting the customer touch points including sales, marketing, product/service planning, pricing, and customer service functions. More importantly, better alignment drives more fact based planning and more optimal resource allocation.  

Defining customer needs, expectations and options requires something most organizations find hard to do – ask the customer and be honest about what the answer might mean.

Most organizations have taken a run at CRM with a business case based on efficiency.  Some have been willing to accept the obvious value of collecting customer data as an asset. Very few, have been willing to drive value to the most challenging points across the demand chain where the customer, and employee, perspective is the most obvious. These points are the customer interaction points which hold the value and potential of the organization. Market leaders will emerge by tending to the value exchange defined by the customer and employee perspective.  All the while, the competition will most likely be absorbed by internal perspectives.

Is meaningful customer focus possible given limited resources?  It is a challenge considering the autonomy of business units and functions with few internal resources positioned to effectively facilitate.  There are many interdependent decisions needing to be made properly for lasting success. Many organizations are caught sitting on their hands having seen or experienced the failure of technology. It requires a much greater commitment to identify and create the organizational changes for optimal performance and only then, provide the enabling technology. The competitive advantage created by successful customer focused strategies is rooted in the support of the processes designed to optimize customer interaction points from strategic marketing to customer loyalty.

The temptation of letting technology attempt to provide our customer focus begins early.  There is a need for a database to hold the basic customer data assets including name, addresses, phone, assignment, market, etc…. Fortunately, centralized database initiatives done properly provide valuable insight to the current state and potentially critical gaps in basic customer intelligence. What derails an organization is the desire to take advantage of every feature, function and data point of the technology. Only by understanding the foundation of each organizations unique customer alignment will prioritization be effective.  In other words, when the capturing of data overshadows the need and purpose of customer and market intelligence, the organization will misallocate resources.

To make the prioritization of need and requirement successful, an organization must provide a framework to drive collaboration around common goals and objectives.  It is critical to facilitate the convergence of data, process and technology over time and across the many units and functions of an organization. Collaboration tools need to bridge those periods where organizational units have short-term goals and objectives differing from those that are customer focused in nature.  Often, an unbiased team is required to best facilitate consensus and provide cross industry best practice.

In addition to framework and collaboration efforts, the organizational attitude or culture must be carefully transitioned to support the shift in focus. By focusing on the individual’s role within current and future state customer focused processes, the vision becomes clear and real change happens more rapidly. By approaching customer focused initiative from the customer and employee perspectives first, the tide of resistance begins to reverse as employees demand the tools required to meet their customer focused objectives.

Make the decision to lead your markets with customer relationship based competitive advantage. Each market segment will have at least one organization choosing to lead with customer relationship excellence. You will recognize them by their ability to move quickly, reacting to the ever-increasing rate of change.  They will make informed market decisions earlier and see trends for opportunity sooner. They will enter similar geographic markets and expand with ease.  They will meet the needs of their competitors’ customers before the competition is aware of new needs. They will resolve customer issues before the incumbent is given a second chance. They will target the best customers and leave the less valuable to fill the void. Their marketing efforts will be precise and change quickly based on measured results. They will attract the best team. They won’t loose many customers while winning a larger percentage of the opportunities. In the end, they will become increasingly better over time by measuring value and optimizing each point across the demand chain.

Executing on customer focused strategies provides the best potential for sustainable competitive advantage today. Initiatives that create alignment with customers and markets to better allocate organizational resources create optimal performance and more loyal customers. Shorter customer alignment cycles drive natural convergence and foster an environment of continual improvement.  The result is ongoing competitive advantage.    
 

BenNevis, Inc.

BenNevis works with organizations to execute on the mission of customer based competitive advantage.  Specializing in driving business results by facilitating demand chain optimization – enabling clients to better identify, attract, retain and grow profitable customers. BenNevis | Building Customers™ is a proven approach to plan for and support ongoing customer focused initiatives; involving a combination of process, methodology, best practice and enabling technology.  To learn more about BenNevis, call (952) 473-9446 or visit www.bennevis.com.

As CEO of BenNevis Inc., Michael Paradis leads the organization to a vision of demand chain excellence for its clients.  BenNevis provides the catalyst for realizing competitive advantage through customer focused strategies and ongoing customer facing initiative success. Michael’s primary client facing role involves building the business case and maintaining a high level of quality on all client commitments. Michael has over a decade of experience building competitive advantage through customer focus.
 

Guest Writers for This Report

I have opened up the Monthly NetSuds Report to guest writers. If you have a passion for a topic, and you can write (at least no worse than me), send an email to me matt@netsuds.com.  You can even send copies of your work.  It needs to be on "com and .com" topics and can include entrepreneur/investor activities.  Good information from our service providers and vendors is also welcome so long as it is not a "commercial" for any one company or individual.

If you are aware of others who would like to receive the NetSuds Report, ask them to visit http://www.netsuds.net/mail.htm to subscribe or unsubscribe.

Please send your comments and feedback regarding this issue of the NetSuds Report to matt@netsuds.com.

Matt Noah

980 Lake Susan Hills Drive
Chanhassen, MN  55317

612.605.5252
fax:  612.677.3934
matt@netsuds.com

© 2000-2005 NetSuds.com™, Inc.  All Rights Reserved.