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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

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