Some years ago I had the opportunity to join a micro startup for an international company. The goal was to reestablish a brand that had failed using a new corporation that had the U.S. license for the product for the prior 10 years. This new company, LEGO Systems Inc., was a typical consumer-driven enterprise with a focus on establishing brand acceptance for LEGO Brand building bricks. With such an outward focus, it was natural that the supporting functions of this start-from-scratch company were established as needed vs. a preplanned part of the system. One such function that was immediately put together was Consumer Services.
Conventional wisdom at the time was that only a small segment of dissatisfied customers ever complained as few believed there would be any reaction to the complaint. Nevertheless, smart companies took the approach that those who did complain provided a chance to rectify problems and turn opinions around before they could affect other consumers. As a result, consumer service departments were focused on answering and rectifying consumer complaints.
Since LEGO was spending millions of dollars in TV advertising to build its consumer base, there was a real sensitivity in this startup to the high cost of customer acquisition and the need to retain every consumer. A complete Consumer Services department was established, even with minimal sales in the first year. We found that consumers of LEGO, both young and old, had a passion to share their experience with the product. We started to receive hundreds of letters endorsing product along with their ideas for improvements and future products.
Many of these endorsements were used as part of our sales presentations. They made it easier to increase distribution channels as few purchasing agents could say "no" to a product that had such strong customer support. The consumers helped to sell the product. The letters received soon ran into the thousands and were closely monitored. They played an important and continuing role in shaping future product offerings.
These testimonials were important input that the LEGO Group companies continue to promote by asking for customer feedback through their web sites, loyalty VIP clubs, and a myriad of sales collateral materials.
All of this does seem to be in direct contrast to the general manufacturing sector where customer input is rarely sought unless you are an ISO registered company (which requires that you do so). The recent study of the Massachusetts manufacturing industry, Staying Power II: A Report Card on Manufacturing, completed by Professor Barry Bluestone of the Dukakis Center for Urban and Regional Policy at Northeastern University, summed up the industry’s perception relative to customer demands in the following table.
This summary lists the changes expected to occur over the next five years by the surveyed manufacturers. Across all firms, nearly 46% responded that to a "Large Extent" or "Great Extent" their customers would be coming back to them asking for lower prices. The manufacturers also believe that customers will not only demand lower prices but improved service delivery and better product quality. Only one in eight did not expect greater pressure on service and quality, while 40% of the firms felt that there would be a substantially increased demand for better service, and 36% suggested a very strong demand for quality.
About a quarter of all firms (27%) expect grater pressure to increase the use of new technology and 24 % expect that this would lead to increases in productivity.
The study also found that to a "Large Extent" or "Great Extent," 51.3% of the companies over 100 employees, expect substantial increases in new technologies. These medium to large size companies are representative of the Original Equipment Manufacturer (OEM) population. This information gives supply chain manufacturers an early indication that they will be required to understand how their OEM’s will innovate and evolve over the forthcoming years. Support must be provided movement into new technologies. Changes in technology will take much longer to react to, plan for, and support than the previous requirements of price, quality, and delivery. Manufacturers will need to develop and implement plans that coordinate external customer feedback and required improvements to their own technology. The one thing that is certain that over the next five years is that businesses will continue to evolve and change, and delighting the customer will be essential for any enterprise in a slow growth economy.
What does it take to delight a customer? Let’s return to the LEGO example. It has evolved into responding to thousands of phone calls, e-mails, letters – all in ONE DAY. Watch the video demonstration of how LEGO delights its customers, exceeds expectations, and builds a sustainable company.
