As Chief Marketing Officers assume greater responsibility and influence in their organizations, a potential trap awaits them: losing the connection with customer needs and market nuances. Successful CMOs never lose their focus on the customer. And sometimes their employers make sure of it.

What Do Your Customers Want?

High-growth companies are significantly more likely than their low-growth counterparts to incorporate customer satisfaction metrics into their top marketing executive's compensation formula, as these brands know their long-term success depends on their CMO's intimacy with customers.

My Chief Outsiders colleague Clay Spitz has never lost the customer focus he adopted early in a career that has included executive marketing positions at the nation's largest foundation repair contractor, the leading check verification service and the pest-control giant Terminix International. It was at Terminix that Clay helped reduce customer cancellations by 30 percent, add more than $20 million in annual revenue, and initiate a 45 percent turnaround in commercial account sales.

Spitz grew up working in and running a family business. He said, "One of the first definitions of marketing I ever learned was, 'Find out what the customer wants and give it to them.' I also learned early on that what I think, what my wife thinks, why my family thinks, and what my friends think is not always representative of what a real customer thinks. The only way to really find out is by asking."

Customer Understanding Leads to Organizational Focus

Whether it's formal market research or less-involved discussions with customers, Spitz noted that it’s always best to involve an independent resource. "When you ask customers what they think, they always wonder if there is some agenda. If they think something different than what they perceive you want to hear, a lot of them won't tell you the truth, especially if it's bad news and might create a conflict. They certainly don't want to say something that may raise the price or cause some other negative consequence for them."

"Asking the questions independently usually reveals a more real answer," he added. "Asking across multiple customer segments can give a better picture than just asking one or two people. The key is being able to ask questions in a way that doesn't bias the answers. Too many people telegraph what they want the answer to be in the way they ask the question. It takes some real skill to understand how to ask a question in a way that will get an unbiased answer."

Spitz said having customer insight always leads to a better understanding of what makes a company different from the competition, what the customer is really looking for in terms of a value proposition, and what that customer values. "When you ask enough questions, you see that you can't satisfy everyone," he said. "And precisely because you can't give customers everything, it's vital to understand what they truly value, and then focus your product or service on that."

Spitz echoed what Pete Hayes told me in the first installment of this series about the value of narrowing an organization's focus to serve a smaller market more effectively. He said that by identifying core customer needs and matching them with the business' strengths, a company can focus on providing its very best product or service to the people who value it most.

Spitz added, "When everything looks the same, the only difference is price. Nobody wants to compete on price unless you are Walmart, and you can do that better — and more profitably — than anyone else. Being able to focus on the customer and differentiate an offering takes you out of the realm of price and into the realm of value. And that opens the door to higher prices and greater profits."

Editor's Note: This is the fourth in a five-part series. Read the first three posts here, and be sure to check back for the full series.

Creative Commons Creative Commons Attribution-Share Alike 2.0 Generic License Title image by  Red Rose Exile