Is Your Sales Approach Customer-Centric?

 Is Your Company Customer-Centric? [23:45m]: Play Now | Play in Popup | Download

BuilderRadio interviews David Giannetto, director of J.H. Cohn’s Enterprise Performance Management Practice and co-author of The Performance Power Grid.

Would you describe your organization as customer-centric, or product-centric?  In his book, The Performance Grid, co-authored with Anthony Zecca, David Giannetto asserts that most companies believe they are one, but are actually the other.  You guessed it,  most organizations, including building firms, tend to be more driven by the product and the process than they are by buyer’s desires and buying habits.

So, how does a company move from being product driven to being customer-centric?  In our interview with David Giannetto, he offers these steps:

Understand what the customer feels at their first impression. This relates to the curb appeal of your model, homes or community, and the feelings that customers associate with your product at first sight.

Learn to see your sales process through your customer’s eyes. “Picture yourself as a brand new customer approaching your organization for the first time.  Who is the person they have to interact with at that ‘first touch,’ and the process they have to go through to be qualified as a customer, to be introduced to your product or service, and all the steps that must take place before they’re actually a happy, paying customer for you?” asks Giannetto.

He also warns that, “It’s very easy for employees [or salesperson] to loose sight of the fact that it’s really the customer paying the bills.  Yet, management, especially at the top of the organization, is usually the furthest removed from the customer.”  For a company to be truly customer-centric, the entire organization needs to understand and stay focused on how it’s buyers view and engage – or fail to engage – in the selling process, and make adjustments to align the company’s processes with how it’s customer’s choose to shop and buy.

Creating employee awareness and understanding of customer’s buying habits, Giannetto admits, “is not always as easy as it sounds.”  After all, most functions in an organization are performed according to internal processes designed to streamline the efficiency of the organization.  He says that employees “get so caught up on solving problems and putting out fires… that it’s very, very difficult to get them to pick their heads up.  So, you almost have to create an environment where you’re directing and focusing them on the things that matter to the customer most…  Management’s job, then, is to figure out what the customer’s ‘critical path’ is, and then figure out how each different piece of the organization can affect it, and then they’ll know the things they have to focus that person on.”

Revenue and profits are both the results of being customer-centric.  But, companies often focus too much on the bottom line – cutting expenses to maximize profits.  By doing so, they sabotage the revenue stream, making it harder for customers to buy their products, instead of easier.  “One thing we’ve really proven, especially in the last decade, is that you can’t cut costs and reach the top of your market.  You might be able to run with the pack and realize a cost advantage…, but you can’t ‘rise and shine’ in your industry simply by cutting costs,” says Giannetto.  He sites manufacturing initiatives, such as ‘lean manufacturing’ and Six Sigma, as being great strategies for reducing cost and increasing a company’s performance, but reminds us that both of these strategies are product-centric, not customer-centric.  They focus on the production process, not the customer’s buying process.  They have their place as part of a customer-centric approach, not instead of it.

What if an organization implemented that kind of a formalized initiative to drive sales?  “There really isn’t a leading methodology designed to push revenues and create differentiation between organizations, and that’s what I believe the real answer is, not just cutting costs, but figuring out what differentiates you.”

One size does not fit all:  Segment your customers into buyer groups.
“When you try to appeal to a very broad customer base, you’re only going to [have] partial success.  You’ll win some of them, but you’ll lose a great deal.”  The answer is to segment sub-groups of buyers with, as he puts it, similar “critical paths, so that you get that group of people more successfully to become true customers, and then to become repeat customers over time.”

Great service and long-term follow up is customer-centric.  It also leads to higher customer retention, referral sales, an enhanced reputation, and word-of-mouth publicity.  Giannetto makes this observation:  “I think the housing industry suffers when it comes to customer retention and customer lifetime value because the buying patterns are so long.  If you’re going to buy a house, you’re probably going to stay in that house 4-6 years before you consider moving up into another house.  It’s very hard to keep in touch with that customer over the course of 4-6 years and then be properly positioned to sell them that next house.”

The bottom line is this:  The better we are at understanding the customers buying experience and adjusting every facet of our company to make that experience as pleasurable and easy as possible, the more sales we’ll make.  While that principle might apply to any industry, it certainly describes how builders can learn from and respond to buyers in a way that will increase revenue now and retain more customers for future sales.  Now, that’s customer-centric.

Review and order David’s book, The Power Performance Grid here.

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