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Category: CX Customer Strategy

Characteristics of a customer-focused company

"Market orientation refers to the organizationwide generation of market intelligence pertaining to current and future needs of customers, dissemination of intelligence within the organization, and responsiveness to it."

My last post defined the concept of market orientation and how important it is to our understanding of customer centricity. I believe you cannot be considered a customer focused organization without having a strong market orientation. I introduced Kohli and Jaworski’s three dimensions of market orientation, which resonates with my understanding of true customer focus. But what I really like is their follow-up work creating a scale for actually measuring market orientation and customer focus (Kohli, Jaworski & Kumar 1993).

It’s great to share anecdotes, case studies, and general frameworks to help us become more customer focused, but it’s even better to quantify and measure the concept. Then you can answer the question, "How customer focused are we and what can we do to improve?" Which seems like a pretty good question to answer.

Kohli, Jaworski & Kumar created and validated a scale of market orientation called MARKOR consisting of approximately 20 questions covering their three dimensions of market orientation. The scale is then administered to employees to assess a company’s performance. This scale has been used in scores of articles since its creation, which indicates strong reliability. Scales like this help us better understand important concepts because each question is a validated observable attribute of an otherwise unobservable, latent concept.

So here are a few of the 20 indicators that measure market orientation in the MARKOR scale:

Intelligence Generation

  1. Meeting with customers to determine current/future needs.
  2. An in-house market research department.
  3. Ability to detect changes in customers’ product preferences.
  4. At least annual surveys of customer perceptions.

Intelligence Dissemination

  1. Regular interdepartmental meetings on market trends and developments.
  2. Important events in the market or with key customers are shared quickly with all affected departments.
  3. Regular dissemination of customer satisfaction data at all levels of the company.

Responsiveness

  1. Recognition of changes in customers’ product or service needs.
  2. Alignment of product development efforts with customer needs.
  3. Regular, interdepartmental planning to respond to changes in the business environment.
  4. Responsiveness to customer complaints.
  5. Making concerted efforts to modify products or services to fit customer needs.

Are these all the elements of a customer centric organization? Of course not. But these are some of the key differentiating characteristics of customer focused companies – the characteristics most likely to produce the beneficial company performance associated with high levels of market orientation. In other words, research has shown that companies with the above characteristics have significantly better long-term performance.

Of course, there is debate over the exact items to use in a market orientation scale and many changes/additions have been suggested over MARKOR’s 17 years of existence, but the items above still give us a good start for understanding the specific characteristics that are strongly related to customer centricity and its positive business outcomes.

My next few posts will be discussing the antecedents and outcomes associated with market orientation and the contextual or environmental factors that affect how market oriented different companies need to be.

Troy Powell, Ph.D.
VP, Statistical Solutions
Walker Information

List of all posts in this series:

  1. Re-centering on customer centricity
  2. A broader orientation for being customer-focused
  3. Characteristics of a customer-focused company
  4. The focus of customer-focused companies
  5. The moderation of customer focus

The Domino Effect

If you’re anything like me, you can probably count on one hand the number of times that you’ve had Domino’s Pizza in the past. In the hierarchy of chain pizza restaurants, Domino’s was always about 34th  on my list of options (even beneath places that I have since found out were no longer in business). But recently I noticed that Domino’s has taken a bold, creative approach to addressing their customer feedback that mirrors the perception I had in my mind whenever Domino’s was mentioned.

If you haven’t seen the commercials (if you’re a football fan, don’t worry, you will soon), Domino’s basically lets us behind the curtain to see and hear the nature of the feedback they’ve heard. Things like ‘the crust tastes like cardboard’, and ‘the sauce tastes like catsup’ were continually mentioned in customer focus groups and on social media vehicles like Twitter (http://twitter.com/dominos) and Facebook.

However, instead of trying to divert attention to other aspects that don’t matter as much (like they used to do with the "30 minutes or its free" guarantee), they’ve now addressed this feedback head-on, and have totally recreated their pizza, as well as their approach toward customer feedback.

You can learn more in a pretty candid take in the video below, or at www.pizzaturnaround.com

 

While it remains to be seen how effective this approach will ultimately be (I’ve yet to try their new pizza, but I have to say I’m at least a little intrigued now), I believe that Domino’s should at least be commended for actually listening to what their customers are saying, doing something about it, and crediting their changes to their desire to be customer focused.

  

Brad Harmon
Vice President, Consulting Services

Leslie Pagel

An experiment in survey design

Over the past six months several Walker colleagues and I have been working on an experiment. The experiment focuses on using an alternative analytical approach to achieving insights from customer feedback. And, in order to apply a different analytical approach, we had to redesign the survey instrument.

Three Goals

1 – Test something new on behalf of Walker clients and other customer strategists.
2 – Provide our clients with something they can use to improve their customer feedback program.
3 – Generate richer insights that will help Walker bring increased value to all of our client relationships.

Walker recently completed its annual relationship survey, which served as the testing ground for this new concept. And, while the jury is still out on whether or not our experiment accomplished its goals, I thought it might be helpful to document the concept and the design implications.

The Previous Design

In the past, our relationship assessment included a series of questions, where respondents were asked to evaluate our performance on a scale of Excellent-to-Poor. With the feedback we collected, we used multiple regression models to identify the areas that have significant impact on our customer’s relationship with Walker. This information was used to prioritize initiatives at both the customer level and the corporate level.

The Experiment Design Concept

The survey design for this experiment includes a rather different approach. Instead of asking customers to evaluate Walker’s performance, we asked them to evaluate particular aspects of the solution using the same Excellent-to-Poor scale (e.g., Communications with customers). We followed up with a series of questions where the respondents were asked to pick the characteristics that describe that area (e.g., frequency of communications, method they use to communicate, who sends the communication, etc.).

To be clear, these follow-up questions were not an evaluation of the area (as they have been in the past). Instead they were pick lists that included characteristics of that specific solution component.

Looking Forward

With this new approach, we plan to use an analytical technique that will profile various aspects of a customer feedback program. This approach will provide our clients and Walker a view of what makes up an excellent customer feedback solution.

Although we are still in the process of analyzing the results, the team has already learned quite a bit. For example, while this design doesn’t include more questions, the types of questions require more thought and time to complete. Stay tuned for an upcoming blog about lessons learned from a long survey.

While the experiment is not perfect, I remain excited about the insights it will bring to our clients. I look forward to sharing more with you too.

Photo credit: The Lab Depot, Inc.

Note: This post was originally published in Customer Connection on 12/10/2009.