Does your business strategy match your customers' requirements, and does management truly know what customers think of your proposition?

It is intentional that the word "customers" is capitalised in the title above. This is to draw your attention to an asset which is probably the most valuable in any business. Yet an asset that is often under-valued, poorly supported and misunderstood, despite the CRM system now installed in many organisations.

Do you really know what customers truly think about the business in which you are considering investment, have already invested, or to which you are providing advice?

Seeing beyond the blind spot to "true customer perceptions" is now more important than ever, particularly in the case of underperforming businesses or those facing financial stress.

This blind spot will cloud your view of customers' perceptions, in the context of the competitive market, of both your proposition and how it is delivered.

It will hide how customers really feel about your front line staff, your products, prices, service levels, your current business practices, delivery performance and how you are performing against competition. You may also be missing the fact that current company deliverables are not matching customer needs.

Ask this question:

• If you can answer this question positively, then you and your enterprise are in good stead.
• However, if you are not sure of the answer then you may be investing time and money in a strategy which does not chime with current market conditions and is out of step with customer expectations.

This is equally the case in both B2B and consumer facing enterprises, be they in manufacturing, service provision, or product distribution. Customers' perceptions matter in every business.

It should also be borne in mind, that with the Internet at their disposal your customers are now more knowledgeable than ever before and can research the alternatives comprehensively and quickly.

They can assess your marketplace in minutes and make a value judgement, which is very hard and expensive to alter if it goes against your enterprise.

Customer in the context of 2011
In the context of the 2011 austere fiscal climate with, at best, low GDP growth, difficulty in attracting corporate debt, in order to free up stressed situations from recovery restrictions, and a very depressed consumer market, all pushing lower demand through the entire supple chain, strategic misdirection will be very costly.

Nowhere is a current structural and economically challenged sector more evident than in the sector which the Office of National Statistics calls "household goods stores". This channel accounted for 13% of UK retail in 2005 and has now fallen to 10.6%. In the last three months it has traded as low as 92.7% of last year's values.

Whereas other retail channels (or subsectors) are growing. Why?

Customers have made a fundamental change to how they shop for high ticket goods, such as Consumer Electronics and Household Furnishings. Quite obviously they are using the internet and also buying more non-food products in the powerful supermarket channel.

However this was a "customer led" decision in light of the competitive market proposition with which they were faced. Had we properly asked, they would have told us their intentions. How many more of their future intentions are currently hidden by the blind spot?

The backwash effect into the supply chain by this type of change, will damage a plethora of sectors such as, trade supply, wholesale, packaging, cleaning, construction, logistics, and IT.

Are the views of business management current and accurate?

During our research projects we regularly deliver findings which surprise management and investors. This information is consistently beneficial to business strategy and in many cases immediately alters the approach to tactical matters.

Some issues revealed in recent times/projects are:-

• Packaging Machinery:- New competitive entrants to the marketplace being more highly regarded by customers than management perceived.
• Travel Services:- Current pricing strategies adversely degrading margin when alternative higher margin strategies are more relevant to customer needs.
• Outdoor Activity Products:- Strong loyalty from ageing customers, but an inability of current management strategies to attract new customers.
• Trade Association:- A member desire for services not currently offered by the association, including delivery of regular communications and market data.
• Department Store Group:- A competitive offer from a sector not traditionally regarded by management as competition.
• Furniture Manufacturer:- Customer misunderstanding of marketing communication of the offer.

In conclusion

I strongly urge you to engage with your company's customers in a professional, quantifiable and consistent manner, to allow you and your management to identify changes in customer attitudes, and more importantly to shed light on how customers truly perceive your company.

Lastly, some thought provocation:-

If you are a debt provider: can you simply accept what you are told through the standard management interface?

If you are a stress equity investor: should you consider investing your fund into an enterprise, without truly knowing what customers think of its proposition in the context of the market given today's knowledgeable, savvy customers?

If you are a recovery advisor: can you really rely on just what management say about your customers' perceptions, or should you be finding out what they really think by talking with them?

To learn more visit: www.customerheartbeat.co.uk or call

Tony Lahert
44 (0)7973 714075
tonylahert@customerheartbeat.co.uk