Customer responsiveness is about being fast and right. The value of being right is obvious - customers get something that meets their needs.
But the value also depends critically on the speed with which the response is produced. Maximising performance across the two dimensions constitutes excellent customer responsiveness. But, according to interviews with top executives, this may require a surprising management style.
“Customer value creation” has attracted a lot of attention over the last two decades, with many businesses launching programmes aimed at enhancing customer focus. The European Society of Opinion and Market Research (ESOMAR) estimates that expenditure on market research tripled during the 1990s as executives sought a better understanding of how customers perceived value. Whether, in fact, they achieved this is not clear. But what is clear is that customer experiences have not been substantially enhanced. Customer satisfaction, as measured by the American Satisfaction Index, has been trending down since it was first measured in 1994.
Earlier analysis suggested that companies, although better at market sensing, were not so good at acting on what they learned. It showed that market research was positively (though indirectly) associated with superior corporate performance and was heavily used. But while it might be necessary, it was not sufficient. This article focuses on understanding that missing link – what we call “customer responsiveness”.
Earlier research showed that the organisational beliefs and values that appear to be associated with high levels of customer responsiveness are innovation, risk-taking and entrepreneurship plus a high premium on organic growth. Indeed, champions talked enthusiastically of the importance of customer insight, empowerment, innovation, risk-taking and experimentation.
Such ideas, they argued, encouraged expansive thinking, swift decision making and small flexible teams – all the antithesis of command and control. “Responsiveness” was therefore seen as critical and appeared to leverage customer sensing.
Now, with a highly uncertain economic outlook and shaken confidence in both the competence and integrity of corporate leadership, we feared a counter-revolution – a backlash of control that threatened the return to genuine organic growth. To help avert this we wanted to restate the case for customer focus as an engine of organic growth and describe how, in reality, it is being implemented. In essence, to answer the question “what is customer responsiveness?”