A recurring feature in the business environment is the significantly high level of control, and thus, predictability of activities for which a company relies on its own people and assets as opposed to those which involve external stakeholders. No surprise here, it is in the natural scheme of things

The intent is this article is to narrow this theme down to the customer-related aspects of a business — capital, strategy, production and internal functioning of the firm — and how they are perceived by the customer. This is where it all comes together and the measure of success is growth, both in terms of revenue and the number of customers.

The case I make is based on two observations. One, in a majority of cases, the customer-facing operations receives lower attention than others. Two, in almost all businesses frustration is high that final customer interaction could and should be of superior quality. This area is often the best example of the worst execution in firms.

Let me explain my view of customer facing functions since I have desisted from using the word sales or referring only to the very core and important sales function.

Focus on end-user

It starts with an understanding market and customer segments. Often, particularly in the small and medium enterprises space, the focus is on the product or service, rather than the need of final recipient. In cases that I have experienced, there is low appreciation of the varied customer segments, their specific needs and attractiveness. A disciplined approach to pricing and selling does not exist and there is massive unfocused and reactive activity. This marketing perspective, which should drive many subsequent actions, is diluted. There are examples of astute and innovative marketing backed by great selling and distribution. On the balance sub-optimal outcomes dominate. Money is made. Growth takes place. But money and customer growth is also left on the table.

A remarkable entrepreneur, who prefers to remain unnamed, has created two solid high-value export businesses in frozen foods and IT services. They have high growth and a wide international presence. His logic is that what the customer needs in these disparate domains is the same — quality and on time delivery. Let’s put aside the thinking and analysis and execution involved in managing customers and move to the everyday. When this gentleman opened an office in New York he sought a desk overlooking the warehouse and loading bays so that he could go and chat with customers and speak to the truckers to understand their experiences were when they went to customers.

Customer insights

In addition, he spends some time each year at their outlets meeting and waiting on customers. Just think of what this does for a director in terms of understanding and, thus, ability to contribute to and steer deliberations. It also counts as best practise in terms of directors offering a certain amount of time to the company, outside of the board meetings with a focus on customer.

At the risk of repetition, in majority of the small and medium enterprises space, sales take place but it is not managed. In companies with established structures there is room for improvement. Recent management literatures say the difference between the best and worst companies is much larger in the sales function compared to any other. Getting this right has positive impact on aspects other than just revenue. Brand, reputation, channel partner stability, working capital cycles are all factors that directly involve the customer and merit sharp focus.

Weakness here comes from distinct syndromes. Selection of sales staff appears to be based on him or her having a steady pulse. The massive functional skill deficits do not help either. It is important for managers to be trained in how to assess and select for specific requirements. The tendency to read a candidate’s resume back to them and look for assent is not an evaluation.

Invest in training

Secondly, the investment in training is more or less non-existent. Listening is another art that needs to be taught in the Indian context. The odd program run by an association is seen as a day at the beach where the major thrust is on the quality of the buffet lunch. The third aspect is an absence of established processes and a review of the adherence to it and its quality. Fourth is a cultural issue where the sales function is not seen as important. Nothing could be more corrosive to the business and this needs change. Just putting people in ties and inflicting them on unsuspecting customers is unfair to the person and an insult to the capital deployed.

The opportunities and also disruption coming from technology, a shifting of buying patterns and channels, free-flow of information and the vast ability to communicate with customers is very high. It does not matter what the size of the business is. Better market and customer understanding, accompanied by simplicity of process, rigour of review and a focus on the competency of people just has to deliver.

nanduunni@changeassociate.com

(The writer is a Chennai-based business consultant)

(This article was published on August 9, 2012)
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