In process improvement, we are always interested in the customer: the organization lives for and by the customer. Each organization must therefore question the added value it brings to its customers and strive to know them well, as well as their expectations. I will share some thoughts on the knowledge of your customers and the way you organize your customers into categories.
If you do business with a dozen customers, it is easy enough to know the needs of each, you do not need to continue reading. On the other hand, when you offer products to hundreds, thousands, even millions of customers, to know them all is simply impossible.
How to satisfy all my customers if I can not know them all?
Our mind has created categories, boxes in which you can drag each client. This is an essential simplification because we are not able to handle a lot of information. The distribution of our environment into categories applies to everything we do. It is from these categories that value analysis, strategic choices or commercial targets should be established.
However, you must keep in mind that categorization destroys 99% of the information on your customers. In fact, whatever the quality of your categorization, it will not be able to adequately cover each individuality. Here are some examples of categories:
- Age (or any other socio-demographic characteristic)
- Profitability level
- Years of loyalty
It is rare that all my clients in their 40s have been loyal for 7 to 10 years. If I categorize by age or loyalty, I would have different results. It is possible to combine several categories, but no combination will adequately cover all customers. The categorization must reflect the value I bring to the customer.
Example of categorization for a vineyard of Champagne.
Its customers are scattered all over the world. The company does not know them directly, since it sells its bottles to wholesalers. Wholesalers sell to shops, who sell to the final customer. In a traditional way, Taittinger could rank its clients by region and look for the best development strategies per region. This is what is done in general.
It could also have a different approach and question the value it brings to the client … In this case, it can give itself as a vision to participate in the success of its customers’ events. It could then put its clients in categories related to the type of event: evening with friends, couple outing at the restaurant, life event, corporate. Taittinger will review its strategy according to its results in the different categories created.
Beyond business strategies and targets, the entire organization of work should reflect the categorization chosen. That’s what I discovered when visiting the Caisse Desjardins of Lévis, financial cooperative of 52 000 members.
They chose to create categories by customer profile: students, active people, retirees, entrepreneurs. The building is organized to receive each type of clients in spaces that corresponds. For instance, retired stay on the ground floor, while active people find rooms with children’s games. All employees are grouped by category of customer, and no longer by their skills. They can now offer all financial products and services within the same team.
You need to find the categories that reflect the value you bring to customers. Next transform the organization around these categories: strategies, business development, work teams, products and services, …