“They understand what is important to me and my company and help me to get my work done faster and easier.” A statement like this from customers is always a particular source of praise for companies that provide support with products or services. It is an expression of what is meant by “customer centricity”: such a company aligns its portfolio of offerings not according to what it wants to promote itself or what the competition is doing, but according to what customers need or want. Such an approach is an important success factor in today’s market conditions.
However, there are still major deficits in implementation in many places: While 80% of companies believe that they are customer-centric, only 8% of their customers agree with this assessment. “There is still too much tech push instead of market pull,” says Rainer Simmoleit, an expert in competitiveness and customer centricity. As an interim sales manager, he helped LAPP, the global market leader for integrated solutions in the field of cable and connection technology, to make better use of the principle of customer centricity in order to develop suitable solutions for its customers. The joint approach shows: Implementation works if you start with the right steps.
Customer centricity is a key success factor – and often in short supply
This is still the reality for many companies: The core portfolio has changed little or not at all for decades. If it has, then only incremental product variants are added; the aim is usually to scale up existing products. “Innovation” primarily means seeing what the competition is doing in order to beat them. Sales success is measured solely in terms of turnover and margin, which is why sales employees focus on making quick, large-scale sales instead of developing an understanding of their customers’ challenges and processes – where is the time for that?
In the challenging conditions of competitive global markets, however, a greater focus on customer centricity is worthwhile, says Rainer Simmoleit: “It satisfies customer needs both in the short term, because requests are implemented quickly and via smooth interfaces, and in the long term, because customers receive results through their involvement in the development of products and services that enable them to better implement their business model. Those who offer this to their customers immediately set themselves apart from the competition.”
About Dr. Patrick Olivan
Dr Patrick Olivan is Head of Business Development for the solutions business at LAPP in Stuttgart. He studied mechanical engineering at the University of Stuttgart and holds a doctorate in innovation management. He wrote his doctoral thesis on the organisational concept of ambidexterity – the ability of organisations to run an efficient day-to-day business while simultaneously finding and creating innovative products and solutions.
Customer and solution-orientated to market maturity
At LAPP, Rainer Simmoleit worked with the team of innovation expert Dr Patrick Olivan, Head of Business Development, to anchor customer centricity even more firmly in the company than before. Dr Patrick Olivan says: “At LAPP, we have long pursued the principle of ambidexterity: in addition to efficient day-to-day business, it is important to us that all of our employees are also able to think and act strategically and innovatively. Together with intensive customer contact, this means that we have always taken a solution- and customer-orientated approach – but with external support, we have become even more systematic.”
The focus here is primarily on intensive contact with customers, but also with partner companies and, if necessary, research institutions. This provides the company with a sound information base that ensures that products and services offer real benefits for the target group. With this principle as a background, LAPP has already developed several specific products to market maturity. For example, two LAPP experts realised that many customers lacked the ability to monitor and manage the inventory of their cable drums. This results in a high level of manual effort when checking and reordering, as well as the risk of production coming to a standstill because the cable runs out. As a solution, LAPP has developed eKanban, a networked cable drum rack that provides companies with real-time data on the cable stock of each drum and can automatically reorder cables as soon as a minimum quantity is reached. Another example of a customer-centred solution is the zeroCM® technology. An innovative cable design minimises leakage currents and thus improves electromagnetic compatibility (EMC) in machines and systems. Statistics on machine downtime clearly identify EMC as a frequent cause of faults. This results in a great need for an improved cable design. This is exactly what LAPP developed as part of the “PEPA” research project in collaboration with the Technical University of Darmstadt and numerous research partners from industry: the ÖLFLEX® Servo FD zeroCM.
About Rainer Simmoleit
Rainer Simmoleit, Dipl.-Ing. (FH), MBA, has been helping international technology companies to improve their competitiveness for more than 30 years. As an interim manager, he takes on temporary functions in product management and sales with a focus on reorganisation, turnaround and sustainable growth.
www.p4c-consulting.com
The three most important points for true customer centricity
Companies that want to follow this example should prioritise three measures or thinking principles:
- customer job shadowing, in the course of which sales employees and business developers visit customers together and look over their shoulders as they work in order to understand their processes, methods and needs. The focus should be on departments that are in direct contact with the company’s own product or service. In most cases, the potential for innovation is found outside of the actual product, for example when products are ordered, stored or processed in a cumbersome manner (as in the use case for the LAPP eKanban solution).
- outcome-driven innovation (ODI) or jobs-to-be-done (JTBD): These innovation methods go beyond value-proposition mapping or design thinking and focus on the benefits of a product for completing tasks (JTBD) and achieving results or goals (ODI). Appropriate interviews can be used to validate problems that have been identified and to set up design thinking sprints. This sheds more light on the jobs and identifies the underlying needs. Perfect for greatly simplifying or improving customers’ jobs.
- customer market intelligence: Regular and systematic surveys by sales employees as part of customer relationship management can be used to continuously quantify and validate the problems identified in 1. and 2. as well as the hypotheses that have been established. Questions and target groups are defined in collaboration between innovation experts, sales management and business development, which are then automatically sent to the responsible employees for their sales meetings via CRM. On this basis, companies can prioritise their innovation and development ideas and projects accordingly and regularly adjust them based on new findings.
With its numerous points of contact with customers, sales plays a central role. Rainer Simmoleit advises companies: “Sales employees and all other people with customer contact must be given the time and freedom to use these contact points not only for selling, but also for questioning and learning.” Dr Patrick Olivan adds: “If the findings are sorted and clustered and passed on to the innovation and specialist departments, it is guaranteed that improvements or new products and services will fully meet market needs. And the insights into customer needs must be understood by companies for what they are: one of the most valuable assets on the path to true customer centricity and thus to sustainable economic success.”
Further information:
Olivan, P., Höft, A., Duwe, J. (2023). Ambidexterity: Organisation, processes, leadership. In: Riedel, O., Hölzle, K., Schlund, S. (eds) Handbuch Unternehmensorganisation. Springer Vieweg, Berlin, Heidelberg.
Simmoleit, R. (2022). With Customer Centricity to customer-oriented product development. In: Buchenau, P. (eds) Chefsache Strategic Sales Management. A matter for the boss. Springer Gabler, Wiesbaden.