What Do Customers Want?

Framingham, MA - April 28, 2005. Businesses invest time and resources to improve sales and profit, but too often those investments don’t pay off. “Manufacturers or suppliers must know how their customers evaluate the products and services they provide and focus their efforts on those things that make a difference,” according to consultant Mike Donovan of R. Michael Donovan & Co. “Customers focus on six key criteria when rating a company: product, quality, price, quick response, dependability in meeting commitments, and value-added services. Improvements made anywhere else may cut costs or reduce inefficiency but don’t necessarily create what the customer values.”

Customers want to be able to buy exactly the products they want. They expect a certain level of quality that results from the manufacturer’s process capabilities. Price must be competitive – meaning that costs must be controlled to allow competitive pricing and still make an adequate profit. Responsiveness comes down to short cycle time – being able to quickly meet customer demand, competitive moves, and late changes. Dependability is also the result of short cycle time – being able to respond and deliver within the customer’s expectations – every time. Services add value for the customer. Even if the product is a consumable or short lived item, the service the customer receives in order handling, prompt delivery, advice on product use and safety, suggestions on use, cooperation on product design and applicability, adds to perceived value.

“Understanding your company’s strengths and weaknesses versus the competition is essential,” says Donovan, “but few executives actually agree with other staff members on the particulars.” A good way to get a productive discussion going is to ask your leadership team to think carefully about the following:

- What can our competitors supply to our customers that we do not?
- What are the key issues that lead our customers to do business with our competitors instead of us?
- How does our quality, delivery, and price compare to our competition?
- What do our customers value most now, and in two or three years?

General Managers must insist that team members think about these questions thoroughly and provide candid, straightforward answers. Without a clear understanding of what the customer wants, investments for process and system improvements may not deliver the desired results.

Contact Information

Mike Donovan

Managing Partner

R. Michael Donovan & Co.

Contact via E-mail