• An understanding of what your customers want
• The knowledge of how to meet the customers’ needs
• The delivery of the product or service customers want

Many of you reading this may already be doing most of these activities. Great job! If you aren’t, it’s okay. Take some action to formalize your process. Studies show that companies that link these activities together achieve greater levels of performance when compared to their competitors. A company that increases its market focus by ten percent can see a growth of between 17 and 20 percent in overall performance.

Want to evaluate how market-focused your firm is? Check out this free, online assessment tool.

To write your positioning statements, follow these steps:

1. Select the target customer group you want to focus on.
2. Develop a list of needs your customer group has that you intend to meet (if not already included in your customer profile).
3. List your product/service’s benefits that uniquely meet these needs.
4. Use the lists of customer needs and product/service benefits to finish this sentence: When this customer group thinks of my product or service, I want them to think: ____________________.
5. Evaluate your positioning statement by making sure it’s simple, clear, and consistent.
6. Get the word out to everyone by consistently communicating your positioning message in everything your company does for this customer group.

Don’t forget: The customer himself does the real positioning by paying attention and deciding to buy your product/service. What you do have control over is assessing what positions exist in the customer’s mind and then determining which of those you have the best chance of occupying and defending based on your own strengths.

• What are we doing that’s great? What is working?
• What isn’t working and needs improvement?
• What else would you like to see from our company? What else could we do to make your life easier?
• If we ceased to exist, what would you do? What would you be giving up?
• If a friend was in search of <fill in your type of company>, would you refer us? Why or why not?

Sam Walton, of Wal-Mart, reportedly spent five days every month interacting with customers in his stores. This amount of dedicated time kept him close to and in touch with his customers needs and wants. Although I doubt his customer attention was the only reason for Wal-Mart’s runaway success, it surely played a big part.

Gathering feedback from a variety of sources results in an objective, comprehensive picture of who your customers are, what they want, and what they value. However, collecting the information is only half of the  equation. Ensure that everyone in the company knows what customers are thinking by sharing customer feedback through the organization. By spreading the news, everyone will start to make better more informed decisions. For your strategic plan, you can use the information you collected over the years to make calculated decisions that have broader implications.

• In the general administration area, the newspaper’s invoices only offered one method of payment, when there were actually three ways to pay. The publisher immediately revised the invoices to include all options. The cost to the company was next to nothing as they were computer-generated. Decrease in delinquent accounts: 40 percent.
• In the human resource management area, the organization’s high turnover rate made customers question the viability of the newspaper. The publisher instituted a more rigorous hiring process that included a third-party skills and personality assessment to make sure theat the right people were "on the bus."
• In the area of technology, the newspaper didn’t have an online renewal form. This feature was quickly added, which allowed subscribers to maintain their subscriptions with a click of their mouse instead of calling, faxing, or snail mailing in their renewal forms.

Don’t these changes seem obvious and straight-forward? It’s easier to see the errors of others or after someone points them out to you. Well, it wasn’t until the publisher used the value chain that he realized where the links were broken. The organization’s core product is highly regarded in the community, but the supporting activities were hindering business growth.

Years later, America Online is now the biggest ISP. Prodigy and CompuServe are virtually unheard of anymore. How did America Online win the war? The folks at AOL understood two key things customers valued at that time:

• Personalization of accounts: A person could get an e-mail address like joesmith@aol.com from AOL whereas Prodigy assigned him the e-mail address JS12345@prodigy.com, and CompuServe assigned 56789@compuserve.com. As a customer, I want my name if I can get it, or something else that is personally meaningful to me, like a personalized license plate from the DMV at no extra charge, would you do it? Most people would.
• Fewer rules: AOL has fewer rules governing the virtual community of chat rooms and bulletin boards. People could pretty much talk about whatever they wanted to in cyberspace within AOL, whereas CompuServe and Prodigy had more restrictions on that kind of activity. Naturally the virtual community growth was viral, multiplying their user base tenfold.

Over time, most people picked AOL over the competition. AOL went for customization and personalization against the bigger, more well-funded competition. That’s using competitive advantage to dominate your space, to grow, and to become successful!

The Anthropologie customer is affluent but not materialistic. She’s focused on building a nest but hankers for exotic travel. She’s like to be a domestic but has no problem cutting corners (she prefers the luscious excess of British cooking sensation Negella Lawson to the measured perfection of Martha Stewart). She’s in tune with trends, but she’s a confident individualist when it comes to style. She lives in the suburbs but would never consider herself a suburbanite."

Can you visualize Anthropologie’s customers? Without a doubt! Now don’t worry if your customer profile isn’t this specific. In fact, it probably won’t be. Not everyone in this company’s market exhibits all of these traits; that would be too narrow. Nevertheless, this example illustrates the power behind really, truly knowing your customers. You can immediately see how this profile helps the company select which products to carry in the store, what messages to use in the advertising campaigns, how to price the merchandise, and what type of customer service drives repeat business.

• A belief that employees are dangerous and lazy. If you treat people as if they’re worthless long enough, eventually they’ll either believe you (and behave accordingly) or they’ll spend all their energy trying to build a paper case that you’re wrong. Either way, your customers (and you) lose.
• A conviction that customers cannot be trusted. Managers at unhappy companies foster an environment in which customers are kept at arms’ length from everyone except the sales department. Needless to say, customers usually reciprocate this lack of trust and never share the needs and frustrations that might lead to new products — and new partnerships.
• A focus on policies, not principles. Although individual employees often recognize the damage that these rules have on loyalty and customer value, the lack of clear principles — that employee satisfaction matters, that creation of customer value is how we grow the business — means that the system stays in place until it’s tipped over by a more-principled competitor.
• An obsession with today, not tomorrow. Unhappy companies squeeze the same products and processes like stones for next quarter’s profit — and then wonder why it all seems that much harder the next quarter, and the quarter after that.
• Leadership in all the wrong places. Unhappy companies have leaders who make grand promises for revenues but never meet with customers; make grand demands for efficiency but never commit dollars to execution; and make grand noises about change but never do more than reshuffle the deck chairs.

Are you at an unhappy company? Do any of these sound familiar?

Modified thoughts from John R. Brandt

Source: Nykamp, M. (2002). Check Your Alignment: www.directmag.com

1. A great product,
2. Good value for the price, and
3. Good service. 

The authors have simply identified the basic essentials that customers want.  Completing a needs analysis of their target customers will help drive the operational strategy of the business.