Inside looking out

Most insurance agencies and companies, probably most businesses, think they know what their customers think when in reality they don’t. They have stopped looking and listening to their outside world.

“Although most companies start out with a strong focus on customers, as the organization grows beyond a dozen members, people may stop looking outward and become preoccupied with internal processes,” says Craig Cochran, a regional manager at Georgia Tech’s Office of Economic Development and Technology Ventures, where he assists companies with quality improvement and lean techniques.

In his new book, “Becoming a Customer-Focused Organization” (Paton Press, 2006), Cochran explains that this corporate myopia is a natural phenomenon sparked by self-preservation. “Once someone becomes part of an organization, it’s only natural to want to remain part of it–at least, until something better comes along,” he explains. “The irony is that this inward orientation doesn’t ensure survival. In fact, it guarantees the opposite–irrelevance, obsolescence and death.”

Cochran stresses that a customer-centric philosophy isn’t just for Fortune 500 companies, but is of value to businesses, nonprofit even government agencies of all sizes.

As an example of the inward orientation companies adopt, Cochran says to look at how many companies approach customer feedback as an annual event–an Olympic survey of sorts –instead of treating it as an ongoing process.

“Companies shouldn’t try to invent new ways for collecting customer feedback,” Cochran says. “They already have countless customer interactions available to them, ranging from salespeople to technical reps. What’s important is to provide some structure to these interactions and share them with everyone in the organization.”

Weaving customer feedback into daily processes makes it easier to digest and easier to take action on, he adds.

Cochran says companies should pay attention to how they handle customer complaints. Smart companies cherish customer complaints. “Customers who complain are not nitpickers or looking for discounts, they’re committed to your organization,” Cochran says, noting that complaining requires time, effort and emotion. “Someone who isn’t committed to your company wouldn’t bother complaining.”

In most companies, senior management fixates on financial measures like sales and profits when they should also weigh metrics that track customer satisfaction.

“The leadership of an organization has no job more important than making sure everyone knows the importance of the customer,” Cochran says. “CEOs who want real job security should try to please customers, not shareholders.”

Well, maybe Cochran overstates his case. Any CEO who fails to please shareholders will soon be in the unemployment line. It is not an either/or situation. It includes educating shareholders about the value of focusing on the customer.