APQC recently talked to Matts Rehnstrom of Clean Stream about the five keys to making sure your processes make the customer experience better. Matts Rehnstrom is the Shaper of Business Excellence and has more than 25 years of experience with leadership and business development.  He will be leading a breakout out session at APQC’s 2016 Process Conference October  3-7.

You can find out more about Matts at http://mattsrehnstrom.com/ or on LinkedIn.

 

Q: What are the differences between customer needs and customer wants? What are some ways organizations can identify and focus on customer needs?

 Henry Ford once said that if Ford had asked customer what they wanted, they would have replied faster horses. Ford Motor Company however did not produce faster horses, it built and sold cars. Therefore it could not deliver what the customers wanted but instead it satisfied the customers need, speed.

Customers have a “need”, and they also have a “want”. Their “need” is to get something fulfilled, while their “want” is their assumptions of a solution to fulfill the underlying need. As the customers many times are not experts in the domain of your business, their “want” may not be the best solution for fulfilling their need. If you understand the “need” of the customer, then you can give the customer a deeper-level value, one that solves the customer’s situation thoroughly.

Think about the introduction of the iPhone. The market did not have a “want” for the iPhone, as customers could not comprehend such a cell phone. The market had “needs” for an easier way to handle email, web browsing, games and more, but their “want” was to get the standard phone to become better. The iPhone introduced a totally new concept of solving the deeper needs of the market. Today most cell phones are built on the iPhone concept, and provide that underlying value to customers.

When it comes to processes, we need to understand the customers’ “needs” in order to create really good value for them. If we only fulfill their “wants” we have to chase the customers around to address and deliver value which changes with their “wants.” Their “needs” are deeper, and if we find the “needs” we will be able to create a longer-lasting value that is fundamental to them. They will stay longer with us as they experience a fantastic value as long as we deliver a satisfaction to their needs.

Q: When organizations usually focus on process, it tends to focus internally. Why should a customer’s experience be seen as the foundation for the organization’s processes?

Businesses and processes exist to create value to someone – mainly the customer. If we do not understand and honor the wants and needs of the customer we are creating the wrong value.

It is also important to understand who the customer is. Many times we might only treat the next organization in the flow of work as our customer, for example in a business-to-business relationship we are the supplier and they are the customer. But we need to understand who the real customer or ultimate end-user is. 80 percent of the time this is a consumer rather than another business.

Furthermore, if we do not understand the customer’s experience from end-to-end perspective we cannot ensure that we create outstanding value. In a world with constantly increasing competition and challenges we need to improve and become the very best we can be in the context of the entire journey to stay competitive.

If not, someone else will deliver better value and the customers flock to them instead. In order to give that outstanding value we need to understand what the customer experience is, from the beginning to the end, and then create value along that journey that aligns with the end goal.

If we instead build our processes based on an introvert mindset (inside-out perspective), we miss all that the customer needs to be satisfied with their experience. As customers we can spot a business that has an inside-out perspective instead of an outside-in perspective because they do not satisfy us in a deep, meaningful way and they talk and think more about themselves than us.

Q: What are the keys to understanding customer experience and tying it to process improvement?

One key is to understand what the customer needs in order to be truly satisfied. Another key is to take that knowledge and ensure that the organization’s processes focus on delivering this specific value. That gives you the opportunity to remove things in the process that are not valuable to the customer even if you originally thought it was important for the customer. Instead include things that the customer value, things that you might never have thought of before.

A third key is to look at the whole customer experience in collaboration with other organizations – your partners – make sure that you deliver an outstanding value for your customers.

Q: You believe in treating other organizations as partners in delivering the value for your customers. How does this work? Do you have any advice for others on how to adopt this approach?

First, it is fairly simple; as you understand the end-to-end customer experience and their needs, you will be able to identify the other organizations involved in satisfying the customer along the way.

Second, which is a little trickier, you need to talk to the other organizations and show them what you see and work together to understand how you can increase the value for the customer. When you succeed with this connection, you begin your journey to treat each other as partners. Instead of looking on others in flow of the customer experience as suppliers or customers, you see them as partners, and together you make the real customer satisfied.

For example we can look at the travel industry. If I want to fly from Orlando to Stockholm, stay two weeks, and then fly back home again, my experience starts at the kitchen table discussing the trip with my family. It does not end until I am back home again. However, many of the organizations I meet during my travel have no idea of my earlier experience during my journey. I meet the airline several times during my trip. I meet others businesses such as cab companies, hotels, and maybe trains or busses as well. I also meet public organizations like TSA and customs. All of these organizations impact my total experience. If one fails to deliver good value it can negatively impact my whole trip experience.

What if we could control every step of the travel process? We could then transform the trip experience and make it fabulous, every time, all the time. One way to accomplish that is to own all the organizations involved, ensuring that everything would work seamlessly. However, that solution is no longer possible in the long-term perspective.

Another way is to talk to the others and make sure that the customer has a wonderful experience. Some might not be interested in making a deal, like the public organizations, because they have their own agenda. But others might be. It might be possible to be picked up at the airport and driven directly to the hotel. It might also be possible to check in luggage at the hotel on my way back. It might be possible to get offers for interesting events, restaurants and more, built on my interests. And there are numerous other connections that could happen between all involved organizations. Some customers might have the above service today, as they are a high paying member of some travel association or credit card company. But I mean that this service could be available as a standard, not just as an expensive additional service.

But if all organizations involved in my travel only see that the process starts when they come in contact with me and ends when they stop serving me, they will never expand their view and make service deliver better. And if they also build their processes with an inside-out perspective, they are in real deep trouble.

In my presentation at the APQC conference in October, I will give an example of organizations that started to treat each other as partners to support the same customer flowing through their processes.

Q: You state that the most important objective is to satisfy the customer, but what is the key to measuring if your processes are satisfying the customer?

There are several ways organizations measure the customer experience. For example in the balanced scorecard methodology, the customer perspective is one of its focus areas. You need to follow up on what the customer thinks about your goods and services. To make sure that you get the right questions answered you need to initially focus on things that are within your control – things that your processes can improve. Then you need to find out the customer’s experience in a broader span (things that may be outside your immediate control), and measure it and follow it up, so that you can fulfill their wishes, with or without other organizations involvement.