Customer intimacy…
and other value disciplines.
Highlights of a timeless article from Michael Treacy and Fred Wiersema
Click the “HBR” logo to read the post. Author information follows: Treacy & Company & Fred Wiersema.
Wisdom is timeless
Most everyone has precepts upon which they built their business and which navigate the ship. Few are at the helm of enterprises as large as Dell, Home Depot, FedEx or Johnson & Johnson. But the insight from this article holds valuable lessons for everyone.
Treacy and Wiersema had influenced me and my partners when we started in 2003. Customer intimacy is our purpose. Our disciplines and processes, i.e., Voice of the Customer, are focused on enabling our clients to achieve customer intimacy in their markets of choice.
Herein, we highlight all value disciplines with emphasis on the keys to achieving customer intimacy.
Focus, focus, focus
Companies that have leadership positions narrow their business focus, not broaden it. They focus on delivering superior customer value in line with one of three value disciplines—operational excellence, customer intimacy, or product leadership. They are champions in one discipline and meet industry standards in the other two.
Consistently winning
The organizations profiled share three primary traits: 1. Creativity - in particular, recognizing and embracing ideas that originate outside the company. 2. Commercialization with speed - engineering all business and management processes for speed to market. 3. Solution orientation - relentlessly pursuing new solutions to the problems their products or services address.
Customer intimacy
Customer intimacy is segmenting and targeting markets precisely and tailoring offerings to match exactly the demands of those niches. Companies that excel in customer intimacy combine detailed customer knowledge with operational flexibility to respond quickly.
Strategic segmentation
Customer intimacy requires segmenting with great efficiency and continually tailoring products and services to fit a fine definition of the customer.
The cost of not segmenting
The demise of Sears was predictable. Plucking “Brand Central” from a quiver of random ideas, Sears shot wide of the target trying to be all things to all people and pursuing strategies that steered it away from its chosen value discipline.
Customer insight informs the process to support customers and fundamental to Customer intimacy.
Voice of the customer is the process to gain Customer insight.
Communicating Customer intimacy is achieved with the Value Model.
The Value Proposition is the experience with the product or service, part journey and part destination, leading to improved outcomes. Value Messaging is the smart words to describe the Value Proposition with demonstrable evidence of the improved outcomes. Value Delivery ensures promises are kept.