Customer-focused companies hammer the competition. Measured as many different ways as we can come up with, every time, companies that are customer focused beat those that aren’t. And not by a little either. They hammer them.
For the last 15 years, we have maintained the Walker Index. The Walker Index is a stock index comprised of our clients—companies that are customer focused and use that focus as a lever to generate better performance. Over the last 15 years, these companies have outperformed the marker by a multiple of 5 to 1!
Sort of begs the question, “What are these companies doing differently that allow them to consistently be high performance companies?” Here’s their secret. There are three areas that make them different, but all three are characteristics that are simply part of their culture, they are subconscious and second nature.
The first characteristic is their customer-focused leadership. All the leaders in the company put the customer first, starting with the CEO. And it isn’t lip service. They really mean it, they demonstrate it with their actions. The importance of customer relationships is part of all internal business reviews. It is discussed on earnings calls. It is viewed as a competitive advantage within the company, not an area to score once in a while.
The second characteristic is the infrastructure built to accommodate customer-focused initiatives. This infrastructure makes customer insights part of the management information system, no different than financial or operating data. It also ensures that the customer perspective is part of every strategic plan or critical decision made by the company. Customer focus is part of the culture of the company, its built into the processes that all employees use every day.
The third characteristic is also part of the culture. These companies are never satisfied that they have done enough to help their customers succeed. They have an insatiable thirst for action to improve the value delivered to their customers. Some call this a bias for action. Call it what you want, but it is a game changer. The companies that use customer focus as a differentiator are constantly listening to customers and acting on their learnings in a quest to help their customers achieve their goals.
We all strive to be high performance companies. And who doesn’t want to hammer the competition? Our companies can use the perspectives of our customers to leverage an effective competitive advantage, grow our market share and improve our margin structure. But only if we have these critical characteristics in place.