My industrial manufacturing clients tell me they are beginning to receive some positive signals from their customers.And just as they start to regain confidence to move ahead with planning and ordering, a big customer will slash volume in half over what was projected.It’s like manufacturers are taking two steps forward and one step back.
It’s hard to assess the risk-reward ratio of your business relationships when the dynamics of manufacturing are on a bit of a roller coaster ride. Do you move forward or stay put?
With so much hesitancy and second-guessing going on, it seems like industrial manufacturers are waiting for a signal that lets them know it’s OK to move forward and do business. Should manufacturers keep checking their Blackberries as though someone is going to issue you the code message that it’s officially the right time? Is someone going to give the official Tweet that you are free to do business?
And if you do move forward, do you have a robust plan of your own design? Or are you going back to relying on the same old wheel you’ve been rolling along on? Or are you simply rolling the dice and going after any and every opportunity to respond to an RFQ?
When’s the last time you built a robust business development strategy that’s based on Voice of the Customer methodology?
Yes, I know that this methodology was popular in the 1990’s. However, it’s time to rethink how these principles can be retrofitted and refurbished to complement current thinking on innovation and change management.What can we take from what we’ve learned over time and redeploy? Just as we are asking our best customers to redevelop their relationships with us, in some new directions, why not do a bit of remanufacturing on your approach to business development?
If you could design the perfect customer against a set of specifications, what would those specifications look like from your perspective? A Voice of the Customer Hierarchy defines, in outline form and in the words of the customer, the prioritization of those attributes and specifications which create the ideal customer for your business.
There are two types of customers you need to develop for your business: external customers and internal customers. External customers are companies with whom you currently do business or prospects with whom you’d like to cultivate a business relationship. The mirror image is internal customers.Your internal customers are members of your organization: your employees.
When is the last time you spoke to each type of customer and compared and contrasted their perspectives on business development? And no, this methodology isn’t about complaining about the way things are or should be or complaining about co-workers or the weather. It’s about figuring out how to align your organization’s structure and output with the types of customers – internal and external – who are ideal for your organization.
If you are a small to mid-sized industrial manufacturer, taking a high level look at the Voice of the Customer hierarchy for your internal and external customers is an important means of developing a perspective that can positively impact your business development strategy.Voice of the Customer methodology allows you to see your company from the outside looking in – as your external customers see you – as well as from the inside looking out, which is the way your internal customers see your organization.
This VOC hierarchy can address customer attributes such as:
- Type of product needed from the customer or type of performance required from personnel
- Amount of engineering required from the customer vs. amount of engineering provided to your company by the customer
- Lead times
- Raw material and machinery requirements
- Certification requirements
- Quality requirements
- Size of company , which is a function of number of employees, personnel requirements, manufacturing capacity requirements, and fiscal and financial health, among other factors
- Historical relationship with that customer, including rework required per past project, time to win that project, profitability of that project
- Assessment of risk in doing business with this type of customer OR the type of risk that customer assumes in doing business with you
- Target markets for your products and services: from which markets have you acquired customers in the past and whether new market development makes sense for your business development strategy
Gathering these data by talking to your current customers gives your company the opportunity to make a strong statement to past customers that you are moving forward – and will be there for them when they return as your customers. These companies are the cornerstones upon which you built your business. Understand the value of their relationship with you and the value that you bring to their table.
Gathering these data by talking to prospective customers gives your company the opportunity to communicate your business philosophy to them.Why will developing a relationship with your company provide value to both you and to your customers? Tell your prospective customers you are basing your relationships on your understanding of how your customers fit into your Voice of the Customer hierarchy. That’s news.
Gathering these data gives your company the opportunity to target specific types of companies for new business development – based on your understanding of how current customers fit into your Voice of the Customer hierarchy. Business development shouldn’t be like rolling the dice or foraging for food. Business development strategies should be focused and methodical based on your knowledge of the types of customers which are the cornerstone of past successes and the amount of risk you want to assume in developing these relationships with new customers.
The new business paradigm will favor those companies who have taken the time to examine business relationships and risk management from their current customer base and apply this knowledge to developing new customers. You can take a good customer relationship and make it better based on your understanding of your requirements from customers – and theirs from your company.
It’s definitely time to move forward and start doing business. Business development shouldn’t just “happen.” Regardless of the size of your business – or the role you play in your organization – you can implement Voice of the Customer methods to assist your company in moving forward. The American Society for Quality, as well as other resources, has many reference materials to assist you.
The only code message on your Blackberry or Tweet you need to be waiting for is from yourself.Talk to your customers. Validate yourself to yourself. And give yourself permission to move forward and do business.