There are many ways to make money, but all involve choosing and executing an effective strategy. Let’s look at four common business approaches:
- Product-focused strategy emphasizes having the best product at the best price. Companies that follow this approach aim to reduce costs to make products more competitive rather than investing in improving their service. At Walmart, price reductions, efficient distribution, maximum volume, and thin margins are critical to their product-focused success.
- Service-focused strategy recognizes that a great product is essential but that added value comes from the consistent delivery of the product. Companies that create “customer service scripts” or “service standards” often follow this strategy. For UCLA health services, it is not enough for patients to receive high-quality medical care if that care is offered inconsistently. UCLA uses a C-I-CARE protocol which serves as a template for expected service behaviors that must occur in every interaction with every patient.
- Customer-focused strategy aims to deliver relevant customer experiences. Companies that follow this strategy segment their customer base, as some service experiences are best received by specific customer segments. In contrast, other experiences are better oriented to different customer groups. This strategy reflects an awareness that a “one-size fits all” approach doesn’t fit everyone.
- Customer-adaptive strategy attempts to meet customers’ current needs while continually gaining insights into evolving wants, needs, and desires. This adaptive strategy attempts to grow a business alongside a shifting customer base by focusing on emerging and unarticulated customer needs.
I would like to point out that the best strategy always fits your strengths and your customer needs. However, if you focus solely on your products, you increasingly risk becoming commodified. Similarly, if you focus predominantly on service consistency, you will likely be vulnerable to companies with a more significant customer focus or commitment to customer adaptivity.
While globalization and other market factors are pushing for customer-focused or customer-adaptive strategies, here are a few things to consider irrespective of the approach you take.
A) What is your company’s primary and secondary strategy?
B) On a scale of 0-10 (with 0 “being not at all” and 10 being “completely”), how would you rate the execution of your primary strategy?
C) On a scale of 0-10 (with 0 being “not at all” and 10 being “completely”), how would your prospects and customers rate the execution of your primary strategy?
D) What one thing could you do today to ensure you are more effectively executing a strategy that puts your customers at the center of everything you do?
E) How can you ensure execution of that “one thing”?
Business success ultimately comes down to a differentiating strategy, sound tactics, and tireless execution, in the words of Chinese strategist Sun Tzu:
Strategy without tactics is the slowest route to victory. Tactics without strategy are the noise before defeat.”
May your strategy, tactics, and execution align with your customers evolving needs and what’s needed to sustain your success.
To learn more about executing customer-focused or customer-adaptive strategies, please contact me at josephmichelli.com/contact.