Part of the appeal of customer-centricity is that it takes very little business acumen to grasp its core concept. Focus intensely on customers, align your products or services with their interests, and voila: a customer-centric culture is born. Simple, right? Not quite. Becoming a truly customer-centric organization is perhaps one of the most difficult transitions an organization can make, fraught with hidden obstacles and unanticipated challenges. Here are three potential roadblocks on the path to a customer-centric strategy, and how to get around them.

Failing to understand your most valuable customer A customer-centric strategy is only as good as its customers. You cant let the average customer dictate what you do, says Robert Duboff, CEO of Hawk Partners LLC and coauthor of the book Market Research Matters. Generally speaking, Duboff says, 20 percent of a company’s customer base generates 80 percent of its profits. Given that split, its imperative to put your most valuable customers at the heart of your approach.

Identifying those customers need not take exhaustive research and complicated measures. It can be a fairly straightforward process, as it is with the Net Promoter Score, or NPS, a metric developed by Bain & Co.s Fred Reichheld. As set forth in The Ultimate Question written by Reichheld and published by Harvard Business Press the NPS approach consists of one simple question: On a scale of one to 10, would you recommend us to your friends?

Based on the answer to that question, customers are segmented into three categories: promoters, who actively champion a particular product to their friends and colleagues; passives, who are lukewarm about the product; and detractors, the opposite of promoters. A given company’s score is simply the difference between its number of promoters and its number of detractors.

NPS has proven to be a powerful tool for such companies as General Electric Capital Solutions, which has used it not only to identify customers that are already valuable promoters but to gain insights into how it can convert detractors. For a business like GE Capital Solutions, which serves more than 1 million very diverse customers in many different industries, NPS helps us better understand what our customers are feeling and how we can improve their experience with us, says Stephen White, a spokesperson for GE Capital.

Failing to support your external customer-centric strategy with an internal customer-centric strategy Speaking of valuable customers, what about that most priceless customer of all your employee?

While most companies aren’t in the habit of regarding their employees as customers, those seeking to instill a customer-centric culture should rethink their stance, argues Elaine Berke, president of Westport, MAbased EBI Consulting, which specializes in helping organizations develop customer-centric strategies. Customer-centricity needs to come from the inside out, says Berke. Leadership must avoid a double standard that makes it OK for managers to argue with or demean staff while still being courteous and considerate to external customers.

Consider the case of the world-renowned Johns Hopkins University Hospital. In developing a comprehensive Service Excellence initiative aimed at boosting its level of patient care, the hospital included employee satisfaction as a core component of the program. The hospital conducted an extensive survey to gauge employee concerns that turned up such simple, actionable insights as making it a point to compliment co-workers and instituting criticism-free no negativity days.

Customer-centric organizations value and respect internal customers as much as external customers, says Berke. Like the old saying goes, If you’re not serving a customer, you’re serving someone who is.

Failure to identify the moment of truth Companies spend considerable time and resources developing metrics for processes, execution and other day-to-day functions but often overlook defining their moments of truth those points at which a customer interacts with a company’s product or service and forms an impression. Companies are usually very good at creating metrics around [such procedures as] production deliverables but have a much harder time knowing how to create and measure standards relating to the quality of customer service being delivered, Keith Bailey of Sterling Consulting Group says.

In defining a company’s moments of truth, Bailey suggests looking at three different angles quality of product, quality of procedures and quality of relationships. Taking a hotel as an example, the quality of the product would be the cleanliness and comfort of the rooms. The quality of procedures would be such factors as how it long it takes to check in or how long customers wait for room service. The quality of relationship would be the friendliness and helpfulness of the staff.

Considering each angle separately allows a company to isolate the negative moments of truth within each and develop a game plan for turning them into positive experiences. Procter & Gamble, for example, identified its moment of truth as that instant when a shopper picks up one of its products and decides whether or not to purchase its decision the customer makes in an average of six seconds. The company has overhauled its marketing with that insight in mind, creating a global First Moment of Truth business team designed to win over the customer in that moment.

There are as many different customer-centric approaches as there are customers, and each has its own unique challenges, but the road to a truly customer-centric strategy always begins with the same steps.

1) Know Your Call’s Goal

Before you even pick up the phone, you need to have a clear idea of your intention and goal for the call. Do you have a direction that you want your prospect to head in after speaking to you? If you do not have a vision for your call, you are unlikely to achieve the end result that you want.

2) Don’t Give It All Away Too Fast

This goal is simple. Do not give away all of your goods without knowing if the person will even take the time to look at them. If they want you to just send them the information so that they can get you off of the phone, don’t do it. Do some digging to see what their level of interest is, or if they’re just trying to get rid of you.

3) Bad Telephone Etiquette

Good phone etiquette seems simple enough to achieve. However, when you are in a stressful situation, you might not even realize what you are doing. Do not chew gum, snack, or attempt to multi-task while you are making a call. Your prospect will be distracted by your poor manners and they may get the wrong impression of you.

4) Listen To Your Prospect

If you are struggling to get a read on your prospect, just listen to them. It is easy to monopolize a conversation without even knowing that you are doing it. To get the best insight into your prospect, listen to them. If you don’t, you are unlikely to be successful.

5) Don’t Make Your Fears Theirs

Although you might think that someone is pushing you off because they are busy at the moment does not mean that they don’t want to speak to you. Request a better time to reach them and then call them back at that time.

6) Not Asking Questions

There are certain things that you want to find out about a person to know whether or not you would even want to do business with them. So ask some questions. People love to discuss themselves, their families, and other areas of interest to them. People will respond more favorably to you if you show an interest in them.

7) Be Prepared

You would never dream of speaking to a room full of people without having prepared ahead of time. The phone is no different. You really need to take some time and go over what you have to say. Ask a friend or family member to do some role playing with you. There’s nothing worse than fumbling over your words when you are talking to a prospect.

Request What You Want

You need to give your prospect a call to action. You want them to follow up with what you’re telling them by having them do their own due diligence. By asking them to do something for you, you can then follow up with them and see what their own research turned up.

I have discovered, after much research in self-development and Life Coaching, 8 similar behaviours between the successful entrepreneurs and those making all the money. If these 8 action steps are followed daily and consecutively – there is no doubt in my mind that success will come your way!

REPLICATE YOUR ENTREPRENEURIAL HERO- Either find a local entrepreneur that you look up to, or even an international highly successful one like Richard Branson or Oprah Winfrey. Start to study them, not just their actions but their mindset as well. Read their Biographies, ask yourself – what do I believe their values and beliefs would be? What would their daily activities involve? If you can, organise with your local successful entrepreneur and ask them if you could have a coffee with them to learn from them. You will be surprised, most successful ones will be happy to share their success.

PICTURE – Olympic athletes visualise winning their race 100’s of times before actually doing it. What this does it creates a neural pathway in the mind of what it believes has happened, so when faced with the actual event, the mind can tell the rest of the body what it is supposed to do. Science has proven this increases chances of success, wealthy entrepreneurs do the same. Give it a try – visualise yourself as a successful entrepreneur – focus on what is happening around you, how you feel, what you say, how you hold yourself and what you hear. Do this daily, and it won’t be long until you find it a reality.

GOALS – Although these seem easy and not relevant – they actually are imperative to success. I mean you can’t get to a desired destination in a car, without first thinking of where you want to go. Success as an entrepreneur is the same, and the more specific you are with your goals, the higher chance you have of success. It is also a good idea to have short, medium and long term goals. When writing them down, don’t focus on HOW you are going to get there, that will come, just on where you want to go.

DAILY ACTIVITIES THAT PRODUCE PROFITS – Obvious, I know – but even I am guilty for being distracted by non-income producing activities! The best thing you can do is to sit down and write up the actual tasks that bring in money – whether it be marketing calls, placing an ad or even having a meeting with clients. Once you have your list of direct income making activities, do at least 1 -2 of them EVERYDAY.

EXPECTATION – Expect that you will be successful. This again helps the unconscious mind to replicate what it is hearing / seeing. If it has an expectation of being a success, then it will do everything it needs to to for fill this truth.

ATTITUDE OF GRATITUDE – Focusing on what you have, will only attract more to what you have. Focusing on what you don’t have, will attract more of the feeling of lack. Whenever you start feeling that you are focusing on being broke, or on not having enough – stop, and write down ten things you are grateful for. This will shift the energy that you are sending out and help you to re-focus. The more positive you are, you start to notice more positive things and attract more of what you want.

CONTINUAL GROWTH / PERSONAL DEVELOPMENT – This is very important – remember to never stop growing. All the successful entrepreneurs have open minds and are always learning. Watch Oprah – she is always learning something new on her show. And with those new Learnings she continues to grow her empire. “You will be the same person in five years as you are today except for the people you meet and the books you read.” Charles “Tremendous” Jones

COMMITMENT – Sometimes you may feel like you are going up a stream without a paddle – I have felt that often. I have even felt that sometimes I am actually going backwards. What I have realised though – is to never give up. Stay focused on your goals and stay committed. If you are determined, no matter what obstacle comes your way, you will ALWAYS find a way to continue towards your goal!

A thorough understanding of the above 8 behaviours, and making them regular habits will only increase your chance of success ten-fold. Enjoy the experience and journey you take in achieving your goals. Don’t forget to reward your successes and learn from the setbacks, success is on the cards – good luck!

Posted by: Paul Stanford

Reclaiming VAT on your business mileage

You must have been living in a deep underground cave for the past year if you haven’t noticed the soaring cost of fuel. Cleary this is something that will hurt any of us that are running small businesses and need to run vehicles for whatever reason.

OK so this is nothing that you didn’t know already. But how many of you reclaim business mileage? Well if you do and you are VAT registered then did you also know that you are entitled to reclaim the VAT on the fuel element of the mileage allowance?

Let’s be clear this has nothing to do with fuel scale charges. How it works is something like this. Let’s say you claim 40 ppm for each business mile you do. A certain amount of this 40p is for the fuel element (the remainder being for servicing, road tax, insurance etc) and this varies depending upon the engine size and fuel type that your vehicle uses. For example for my car the fuel amount is 13p. Therefore I am able to reclaim approx. 2ppm of that as the VAT element (13/47*7=2).

OK this might not sound like much but if you are doing 10,000 miles per year and run a fleet of 20 company cars then the figures add up. Plus as one large retailer would put it “every little helps”

For further details see http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm and make sure you are getting your share of your VAT back on fuel.

Paul Stanford is a Director of 4Momentum http://www.4momentum.co.uk. 4Momentum provides business advisory services to small businesses, charities and social enterprises primarily in Sussex. Services include advice on starting a business, growing and transforming a business and selling a business. Clients typically contract 4Momentum for short periods of an hour to long term consultancy over many months for advice on subjects such as mentoring, business planning, sales and marketing advice, bidding for contracts, raising finance and general business advice. Paul is approved by the UK Government to deliver business advice on their behalf through Business Link and is a member of the Institute of Business Consultants. Visit his blog at http://www.paulstanford.co.uk/blog

Copyright 2008 Paul Stanford

Posted by: Paul Stanford

Sussex Food and Drink Awards 2008/9

If you have a business in Sussex that provides local Food & Drink, then you should encourage your customers to vote for you in the Sussex Food and Drink Awards. The competition is open to Sussex Farmers Markets as well as producers, growers, restaurants and shops that promote their fare.

Your customers can vote for you online at www.sussexfoodawards.com The deadline for votes is 17^th October 2008

Awards judging – A shortlist for each award will be drawn up from the nominations with the highest number of votes in their category and will be considered as finalist. The judges will then verify the finalist against set criteria for each award category. The winners will be announced at a glittering awards dinner on Thursday 29^th January 2009.

For further details please visit www.sussexfoodawards.com

Paul Stanford is a Director of 4Momentum http://www.4momentum.co.uk. 4Momentum provides business advisory services to small businesses, charities and social enterprises primarily in Sussex. Services include advice on starting a business, growing and transforming a business and selling a business. Clients typically contract 4Momentum for short periods of an hour to long term consultancy over many months for advice on subjects such as mentoring, business planning, sales and marketing advice, bidding for contracts, raising finance and general business advice. Paul is approved by the UK Government to deliver business advice on their behalf through Business Link and is a member of the Institute of Business Consultants. Visit his blog at http://www.paulstanford.co.uk/blog

Copyright 2008 Paul Stanford

Posted by: Paul Stanford

Grants for Recycling Equipment

From September 2008, businesses operating in the South East of England will be eligible to enter a competition to obtain a grant to help fund the capital cost of recycling equipment enabling them to do more recycling.

The next Invest in Recycling grant competition will be announced in September 2008. The competition will be for capital grants for businesses to purchase equipment to create financial value from waste streams and divert material from landfill. The grants can cover up to 50% of the costs for new equipment up to a maximum grant value of £134,000.

The primary focus for support will be equipment addressing the Construction and Demolition waste industry but other areas which will be considered for support are:

• Food Waste (non-agricultural)
• Waste Wood
• Innovative Reprocessing and Recycling Solutions

For more details see http://www.envirobusiness.co.uk/invest-in-recycling.html

Paul Stanford is a Director of 4Momentum http://www.4momentum.co.uk. 4Momentum provides business advisory services to small businesses, charities and social enterprises primarily in Sussex. Services include advice on starting a business, growing and transforming a business and selling a business. Clients typically contract 4Momentum for short periods of an hour to long term consultancy over many months for advice on subjects such as mentoring, business planning, sales and marketing advice, bidding for contracts, raising finance and general business advice. Paul is approved by the UK Government to deliver business advice on their behalf through Business Link and is a member of the Institute of Business Consultants. Visit his blog at http://www.paulstanford.co.uk/blog

Copyright 2008 Paul Stanford

Posted by: Paul Stanford

Advertising your business and lessons in how not to sell

I was prompted to write about this subject today as I spent an hour of my time that I could ill afford with a journalist trying to sell me advertising space over the phone. So I thought I would try and share my lessons with you all.

OK this journalist had rang me to sell me some advertising space. He didn’t check what authority I had to make decisions or whether it was a convenient time for me to talk. First alarm bell ringing in my head – why would a journalist be ringing me to sell me advertising space if his publication was as popular as he said it was?

Next alarm bell – I explained I would not be able to make a decision today as I wanted to carry out some research into his publication. He told me that I had to make a decision today as someone else had pulled out and they were going to print. He told me he couldn’t send me a copy as it was too expensive. How anyone can expect someone to part with their cash without being able to touch and feel the publication is beyond me.

Third alarm bell. The price was quoted as X£s. When I told him I couldn’t make a decision today the price immediately dropped – yet I had already told him that the price wasn’t the issue. The issue was that I needed to research his publication and his company. Plus I needed to make sure that I would have the resources available within my company to cope with any increase in demand for 4Momentum’s services as a result of me placing an advert in his publication. To which he then replied it wouldn’t produce a lot of work immediately….having previously informed me how much additional work advertising in his publication would bring 4 Momentum.

Fourth alarm bell. He continued to talk and talk and talk and talk….he wasn’t listening to what I was saying and I got so fed up with this guy that in the end I said I must go because I have to attend a meeting (which was the truth) and that I would contact him again after I had the chance to do some more research and planning. I repeated this four times and I told him that I would have to go and that I would put the phone down on him if he didn’t stop.  So after my final warning I did exactly that.

So the lessons are – when buying advertising don’t agree to anything that you haven’t had the time to research and are completely comfortable with.

And when selling make sure that you listen to your client, know what authority they have, check to see if now is a convenient time to talk, listen to his objections, give him the opportunity to research your goods/services, don’t assume the reason for him not buying is because of price and don’t overstay your welcome with his time.

Ask yourself, given my experience today,  am I likely to want to do business with this company in the future? You bet I won’t be.

Paul Stanford is a Director of 4Momentum http://www.4momentum.co.uk. 4Momentum provides business advisory services to small businesses, charities and social enterprises primarily in Sussex. Services include advice on starting a business, growing and transforming a business and selling a business. Clients typically contract 4Momentum for short periods of an hour to long term consultancy over many months for advice on subjects such as mentoring, business planning, sales and marketing advice, bidding for contracts, raising finance and general business advice. Paul is approved by the UK Government to deliver business advice on their behalf through Business Link and is a member of the Institute of Business Consultants. Visit his blog at http://www.paulstanford.co.uk/blog

Copyright 2008 Paul Stanford

Posted by: Paul Stanford

The Olympics and Business Opportunities

Yes unless you have been living under a stone for the past months then you will be aware that the Olympics is currently being held in Beijing. Well it’s not the Beijing Olympics that I am writing about but the forthcoming London Olympics.

As I am sure you know London will be hosting the next Olympics after Beijing to be held in 2012. So what does this mean for you and your business? Well whilst there will be business opportunities directly connected with the Olympics there will also be so-called supply chain opportunities not only during the London Olympics but running up to the Olympics from as early as right now!

It is anticipated that there will be a large influx of people supporting the Olympics as well as those directly involved in the games themselves. There will be many visitors from all over the world and across the UK there are various designated Olympic training camps. Visitors to the UK will need additional accommodation, will want to buy souvenirs, will need to eat and drink and will want to buy many other products and services from us here in the UK. Remember this is not just an opportunity for businesses in London – but for those across the whole of the UK.

So how can your business get involved? Well you need to register (its free) at the official Olympics website www.london2012.org.uk and follow the link that says “get involved”.  There are also volunteering opportunities and there is a Cultural Olympiad which you may also be interested in. So do yourselves a favour and register for free. It costs you nothing and you never know it could turn out to provide highly lucrative opportunities for your business.

One thing is sure – if you don’t register then you will certainly miss out.

Paul Stanford is a Director of 4Momentum http://www.4momentum.co.uk. 4Momentum provides business advisory services to small businesses, charities and social enterprises primarily in Sussex. Services include advice on starting a business, growing and transforming a business and selling a business. Clients typically contract 4Momentum for short periods of an hour to long term consultancy over many months for advice on subjects such as mentoring, business planning, sales and marketing advice, bidding for contracts, raising finance and general business advice. Paul is approved by the UK Government to deliver business advice on their behalf through Business Link and is a member of the Institute of Business Consultants. Visit his blog at http://www.paulstanford.co.uk/blog

Copyright 2008 Paul Stanford

Posted by: Paul Stanford

The right to remain silent

OK I want to tell you about one of the most important sales techniques that I learnt many years ago in my sales career which has served me well for many sales situations.

Most sales people make the mistake of talking, talking, talking and then talking some more. They tend to be very good at talking but very poor at listening. A good test for any salesperson is to stop and think am I doing too much talking and not enough listening? A good reference for this is to remember that we have two ears and one mouth – the benchmark being that sales people should be using them in that ratio!

But that’s not what I really want to tell you about. The piece I wanted to write about is the negotiation phase of any sale. That’s one of the hardest stages for sales people to get right and the temptation for the salesperson is to keep on talking as he/she gets more anxious and nervous inside waiting for the client to say yes and place an order. So when you get to the stage of asking for the order the one thing all sales people need to do is to be silent and to remain silent until the client speaks. It can seem like an eternity (but it is never as long as it feels) and it is a true test of nerves but once you try it a few times you get used to it and it is one of the most powerful pieces of sales negotiation advice that sales people can ever learn. So remember no matter how tempted you feel – do not say anything…nothing at all…not even a polite what do you think or can I explain more or anything..zilch, nothing, dead silence OK? I hope that by now you will have got this message and enjoy practising using it. Just see how effective it is. It gives you the salesperson back control of the negotiation.

So remember your right as a salesperson to remain silent and the power that remaining silent gives you and your order book!

Paul Stanford is a Director of 4Momentum http://www.4momentum.co.uk. 4Momentum provides business advisory services to small businesses, charities and social enterprises primarily in Sussex. Services include advice on starting a business, growing and transforming a business and selling a business. Clients typically contract 4Momentum for short periods of an hour to long term consultancy over many months for advice on subjects such as mentoring, business planning, sales and marketing advice, bidding for contracts, raising finance and general business advice. Paul is approved by the UK Government to deliver business advice on their behalf through Business Link and is a member of the Institute of Business Consultants. Visit his blog at http://www.paulstanford.co.uk/blog

Copyright 2008 Paul Stanford

I suspect that many of us consider nonprofits and for-profits to be so fundamentally different that they require entirely different management approaches. It makes sense. A for-profit’s purpose is to build shareholder value. Since a business is ultimately worth what it will earn, there’s a logical emphasis in business on growing profits by increasing revenues and controlling costs. A nonprofit’s purpose on the other hand is to promote a cause or help the needy — those who otherwise would not be served because there’s not enough money in the activity to attract private investment. A nonprofit’s worth is a function of how many are helped or how much good is contributed. It’s the passion for helping the unfortunate that motivates people to operate soup kitchens and volunteer their time.

But nonprofits and for-profits have a lot to learn from each other. Nonprofits would likely do better if they placed more emphasis on business-like operational and financial performance measures, and for-profits would make more profit if they focused more on the passion and giving side of the equation.

New Nonprofit Perspectives

Let’s begin by examining the term “nonprofit”. It’s essentially a tax code designation indicating that these organizations are not taxed on the annual surplus they generate. But the term “nonprofit” does not mean that they’re supposed to spend more money than they have coming in. In fact, donors, be they individual, institutional, or public sector want a nonprofit to live within its means. They know that keeping a keen eye on the finances will ensure the organization’s survival and long term health.

Beyond survival, there’s the matter of productivity. Everyone involved with a nonprofit should care about how efficiently the nonprofit uses its money. A common measure is the percent of each dollar that goes directly to the delivery of services versus fund raising expenses or overhead. But what about measuring the productivity of each donated dollar? For example, how many mouths are fed or how many people are housed or how many jobless are trained and placed per dollar?

Productivity is most influenced by the caliber of an organization’s people, including both paid staff and unpaid volunteers. Granted, it’s harder to hold people accountable to high standards of performance when you’re paying them below market salaries or nothing at all. But that doesn’t mean a nonprofit should settle for less. Helping the needy requires that we do our absolute best. And most people like to be held to high standards — as long as they have the support they need to meet them.

New For-Profit Perspectives

For-profits don’t have any trouble focusing on the financials. In fact they have the reverse problem. A business can be so profit-minded that it forgets that good business starts with knowing the customers’ needs and then directing its collective talent and energy to satisfying those needs at less cost than the price it charges.

And then there’s passion. For-profits can learn some lessons about this powerful motivator from their nonprofit brethren. It’s passion for the cause or the needy that motivates nonprofit employees and volunteers to offer their time at a discount or for free. Successful businesses develop similarly passionate employees willing to go the extra mile to deliver maximum benefit to the customer regardless of compensation.

Sharing Perspectives

For-profits and nonprofits can learn from each other in several ways. One way is by having business people serve on nonprofit boards. When this happens, as it frequently does, the business people contribute valuable financial and business perspectives. They benefit in turn from the nonprofit’s reminder that the customer is the focus and that passion for service fuels results.

Another way is for each to use a management framework that draws attention to a well balanced set of objectives including customer, financial (and mission for nonprofits), as well as learning (i.e. people) and process. The Balanced Scorecard framework does this beautifully. It describes the organization from these interrelated cause-and-effect perspectives and places as much emphasis on the customer perspective (the “giving” part) as it does on the financial/mission perspective (the “getting” part), which includes revenue and profit targets for all, as well as mission objectives and targets for the nonprofits.

Whether you set up your own formal Balanced Scorecard or not, I encourage you to think through the four perspectives and establish measured objectives in each. You can start by looking at what benefits you need to deliver to turn your customers into raving fans. Then figure out what particular internal processes, when performed excellently, will a) deliver superior customer results, and b) help control your costs. Next, determine what kind of learning will grow your peoples’ capacity to perform. And finally, select the financial and mission outcomes you plan to achieve and that your investors and donors want to see.

Although nonprofits and for-profits have their differences, the elements of success are universal. And every organization will do better if it minds them all.

(c) SUMMIT Performance Systems 2008

Brian Kinahan is the Managing Partner of SUMMIT Performance Systems (http://www.summit-performance.com). SUMMIT works with CEOs & P&L managers at organizations of 200-2000 employees with multiple divisions or business units who want a proven, systematic way to increase revenues & profits. SUMMIT helps clients improve financial performance, customer satisfaction & employee morale using a strategic framework (including the Balanced Scorecard). Brian has 10 years of C-level management experience, including as COO of a publicly traded company, and understands the challenges of leadership. He has also been consulting to companies on performance improvement for 13 years. He earned an MBA from the UCLA Anderson School & has received extensive training in the Balanced Scorecard & strategic management from Norton and Kaplan’s Palladium Group. Subscribe to Brian’s ezine at http://www.summit-performance.com/mailinglist.htm

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