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Gotta Serve Somebody

Many boneheaded business strategies have one thing in common: they overlook the customer

The Essentials

Too many organizational leaders fumble for an answer when asked two simple questions: Who is your customer? What does that customer want? Yet these questions shape strategy, innovation, and execution. In this Smith Business Insight TALKS presentation filmed at Queen’s Grant Hall, Barry Cross offers four mini-case studies of firms that have successfully and unsuccessfully placed the customer at the centre of their decisions. Cross is adjunct assistant professor at Smith School of Business and co-author, with M. Kathryn Brohman, of Project Leadership: Creating Value with an Adaptive Project Organization.

Video Highlights

1:16     When examining a firm’s operations, Cross asks two questions: Who is your customer? What does that customer want? “Few organizations have a clear idea who their core customers are. Many executives say their business is different, that they don’t have specific customers. My response to that is, Yikes!” How can you hope to compete and differentiate your firm if you cannot identify your customers? You end up trying to be all things to all people, and that rarely ends well.

4:32     In 1954, consumer behaviour researcher Gregory Stone identified four types of consumers: economizing, convenience, personalizing, and ethical. Most of us exhibit several of these characteristics depending on the consumer situation.

6:48     The case of McDonald’s. The fast food empire rolled out a Create Your Taste menu that allowed patrons to select their choice of bun, meat, and toppings using a touch screen. Given that the typical McDonald’s customer values convenience and an economical meal, the initiative was a misfire. “Delivery is taking more than 10 minutes and the burger and fires is something like $12. I love a $12 burger but what doesn’t connect for me is purchasing that $12 burger inside a McDonald’s.”

9:30     The case of Tesla. The maker of high-end battery-powered cars recently introduced an SUV with one very sexy feature: falcon-wing doors. The only problem is, SUV buyers are active individuals who expect to put their skis and other gear on the car roof. How do you access the roof with pop-up falcon-wing doors?

12:50     The case of Tostitos. The classic chip-and-dip tray presents a culinary engineering challenge. How do you engineer a chip that won’t break when you’re scooping in the salsa? Tostitos designed the perfect product for those seeking convenience: the Tostito scoop.

14:40     The case of Menchie’s. How do you get people to pay $8 for a sundae? Set up your store like a buffet with all the toppings and allow customers to build their own sundae. Perfect for “personalizing” consumers. And they end up doing the work: “Staff just man the till and make sure the jars are full.”

17:10     Organizational leaders must choose a path: find ways to react to what’s happening in markets; create a business based on new opportunities; or enhance the growth opportunities of the existing business. “Whatever path you chose, think about the customer.” And McDonald’s? Cross would trim the menu from 120+ items to around 25 items to create a better customer experience.