Market Orientation: Putting Customer Needs First
Does your company make widgets -- or meet customer needs? According to research by Kellogg professor Gregory Carpenter, taking the latter attitude is an important way to ensure customer loyalty and satisfaction.
In an article on Kellogg Insight, Carpenter argues for "market orientation," a strategy that makes customers a top priority throughout an organization. But adopting it requires a transformation of company culture, he says -- from top to bottom. According to Carpenter's research, which he conducted with Dr. Gary F. Gebhardt of the University of South Florida and Dr. John F. Sherry Jr. of Notre Dame, there are four stages necessary to create a organization with true market orientation:
1. Initiation
Company managers begin by identifying places to implement change. This can include incorporating new values (e.g., greater emphasis on teamwork) as well as new processes that will ultimately result in greater customer service.
2. Reconstitution
Managers share plans with the rest of the company and get employees on board with new strategies. The key to this step is unveiling the plans to all departments at the same time in order to build unification around the new ideas.
3. Institutionalization
The new market orientation becomes part of the company's formal structure, from the way meetings are conducted to the methods used to train new employees.
4. Maintenance
To maintain the market orientation, the company continues to research and visit target customers, as well as keep customer-focused values in the forefront of employees' minds. Some companies go so far as basing hiring decisions on how closely prospective employees "match" these values.
The research cites Harley-Davidson as a company with a successful market orientation that permeates its whole culture, from hiring employees who ride motorcycles to sending executives to bike rallies to keeping in touch with the customer base.
While these four steps can take much effort to implement, the authors conclude that the results are worth it. "Although firms may 'talk the talk' of a market orientation, companies can 'walk the walk' by successfully implementing cultural change designed to focus organizational efforts on meeting customer needs," the report states.
Weathervane image courtesy of Flickr user Bob MacInnes, CC 2.0