thinking like a customer

thinking like a customer

Outperformism

By on May 6, 2009

Outperformism is what successful organizations must do to differentiate their products and services and keep their competitive advantage. This level of performance only occurs when a company implements a structured system to proactively exceed the expectations of its customers. It is borrowed from the term ‘outperform' for a rating which a stock analyst might give a stock when it is expected to earn a better return than other stocks.

Outperformism delivers higher value for your customers and it has become the new way to differentiate how customers perceive your organization. When Michael Porter published his landmark book Competitive Advantage in 1985, the techniques he described focused on product differentiation. Customers (Porter simply referred to them as buyers) were mentioned on just twelve of the 536 pages in the book.

Today, that playing field has changed significantly. It is getting difficult to differentiate your products (for longer than six months) because they can be easily copied. The new competitive advantage is in customer-centered performance which converges on higher satisfaction and value, as seen through the lens of the customer. There is a Woody Allen short story about invaders of Earth from outer space who were not light years ahead of us, but only fifteen minutes ahead (referenced in Confidence, by Rosabeth  Moss Kanter). This "fifteen-minute competitive advantage" is no longer too far from reality. Organizations now must sense, feel, think, and act in ways that relate to their customers.

Years ago, the large corporation that I worked for had a client who was very demanding and our customer service staff would always groan in reaction to his special requests. In less than two years, however, we were doing this client's special requests as a routine for all customers. Just like the majority of companies at the time, we were carrying out procedures in a way that was convenient for us, rather than beneficial for the customer. Success now depends on welcoming new ideas for adding value to your customers instead of fighting them.

Teach your organization to outperform. Challenge your staff to continuously innovate in ways that matter to your customers. Build a culture that uses measurements-of Voice-of-the-Customer and of competitors-and that celebrates the high praise from your customers for the great performances it delivers. Design a knowledge process that is unrestricted and empowering. "Enlightened trial and error outperforms the planning of flawless intellects," wrote David Kelley of IDEO (Straight from the CEO). Teach your team to communicate with one voice—which focuses completely on the needs of your customers.

You can make money following others companies' leads in the market, but that approach will not help you to reach greatness. Outperformism will form a new identity for your organization and will become the heart and soul of a cultural change in your company. Thinking like a customer is about making your organization different, not by lowering your costs, but by designing a process of creativity and a new way of decision-making.

This image of your organization as a differentiator can be branded and I will discuss strategies for building that type of customer loyalty in subsequent posts. Outperformism will create a brand that is unforgettable.

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