Gazelles 4Q conversations
At global consulting firm Bain & Co., loyalty practice founder Fred Reicheld and his team found a company in almost every sector that was growing top line revenue at 2.5 times faster than its competitors. So they set out to identify what these companies did differently. At the ‘good’ companies, the executive team spent zero time discussing what it was hearing from customers at it’s weekly meeting. The only time a customers name came up was if there was a crisis. In contrast, the ‘great’ companies which were growing considerably faster – spent roughly 20% of their leadership team’s meeting discussing feedback from customers.
Reicheld who was the founder of the Net Promoter Score concluded that it was this consistent focus on discussing customer feedback that made the difference in the faster growing firms as the teams knew more about their customers, including the problems and needs and therefore were better able to meet those needs.
How much time are you spending talking about feedback from customers within leadership meetings?
Do you have a deep understanding of the customers needs as a result of your leadership team’s relentless discussion and analysis of customer feedback or is it something that you are not focussed on because believe that you “know the industry”?
There are two ways we recommend gathering customer data for weekly analysis at leadership team meetings, 4Q conversations and Net Promoter Score. In this article we are going to focus on 4Q conversations.
What are 4Q conversations?
We recommend that all executives and managers have a 4Q conversation with at least one end user weekly. Particularly in business to business situations you may have to bypass your distribution channels and purchasing agents (with permission) and talk directly with those benefitting from your products and services. The 4Q refers to the 4 questions that we suggest leaders ask customers in person (not on a survey):
- How are you doing?
- What’s going on in your industry / neighbourhood?
- What do you hear about our competitors?
- How are we doing?
The key is to get them to talk about their favourite subject: themselves! The first question will give you an understanding of their current situation. What are their pain points? What are their priorities?
The second question offers insights into general industry trends. What are people thinking and feeling in their observation?
The third question is probably most important because it can cut through your own biases. You are likely to learn more through this question about how your customer perceive your competition than any other.
Only after you have asked your customers these three questions should you ask about their reactions to your offerings, if they have not shared these already. Remember this call is about them and not you!
In business to business environments it is best to have executives call their counterparts (i.e the CFO calls the customer’s CFO) as not only will this make your executives feel more comfortable, but they will pick up insights that others may miss.
Then every week bring the results from calls to the weekly executive team meeting to discuss them and ensure they are captured. Don’t bog down the process with written reports, simply ensure the data is captured if required for future reference.
I have taken many executive teams through this 4Q process during my growth program and when it becomes a habit it is amazing the confidence the team begins to develop in both the decisions that are being made, as well as the strategy that is being implemented (to meet the customer needs). When we repeatedly hear the same feedback about any element, positive or negative, it drives decisions to better meet the customers need. Because the more we can understand the customers needs and align a unique and differentiated offering around these, the more valuable we become.
Rockefeller Habit 6
4Q conversations forms a part of Rockefeller Habit 6 from the book Scaling Up, Mastering the Rockefeller Habits 2.0 and in particular the Rockefeller Habits checklist which is a list of ten habits which is a “blueprint on how to run a team in a successful way… and keep everyone aligned and heading in the same direction” according to Coastal Contacts CEO Roger Hardy who has used the Scaling Up methodology to grow to over $200m in sales.
Rockefeller Habit 6 states;
Reporting and analysis of customer feedback is as frequent and accurate as financial data.
All executives (and middle managers) have a 4Q conversation with at least one end user weekly.
The insights from customer conversations are shared at the weekly executive team meeting.
All employees are involved in collecting customer data.
A mid management team is accountable for the process of closing the loop on all customer feedback.
So what are the 6 reasons you should consider implementing 4Q into your business?
1. Leave the ivory tower
For many executives, dealing directly with end customers does not happen very often. Most problems are taken care of by middle managers and this removes the genuine interaction with customers from the people who make decisions. By implementing 4Q we are providing a direct path for the voice of customers to the decision making leadership team. And when customers understand that it isn’t a front line worker but an executive who is calling and values their advice, the trust and sentiment towards your company will continue to grow.
2. Validate your strategy
Recently devised a strategy to propel you into stardom and dominate your industry? How do you plan to validate whether it will work or not? You may not directly ask customers about their commitment to your strategy, however the more data you have around these 4 questions, the more you can contextualise the belief in your strategy.
3. Understand what is important to customers
When Roger Hardy came out of a 2 day planning session attempting to find ways to grow Coastal Contacts, they were struggling with cheaper competitors attempting to steal market share. Only when they spoke directly with customers did they learn that what customers really wanted was not cheaper prices but next day delivery of contact lenses, because often they were on their last pair when they ordered on the internet. Whilst they were considering ways to produce or ship at a lower cost, only by talking with customers did they learn that wasn’t meeting the customers need. They then offered free next day shipping and revenues soared.
4. Learn about the industry
Today we are overwhelmed with information overload. The internet is a never ending information source, and yet a lot of data presented is often marketing material or skewed data designed to deliver a certain objective. By regularly asking people about what is happening in their industry, we can obtain a legitimate pulse on any movements and industry trends. If our customers industry is different to ours and is experiencing change, this is a likely early warning sign either positive or negative to prepare for change.
5. Learn about competitors
How much do you really know about the competitors you regularly compete with? When I work with executive teams and we talk about how they rank their performance for service delivery along certain attributes many times people say we simply do not know. If on time delivery for example is most important to your customers, and your main competitor rarely delivers on time shouldn’t you know about that? Shouldn’t you know because your customers are telling you?
The more you know about the competition the better, and better still is having our customers tell us.
6. Learn about our performance
Many times the real gems come from the question how are we doing? Sure it’s great to have accolades, and it’s good to know that customers are happy, but real value comes when customers provide us with opportunities to improve. When we ask and customers provide us with the gift that is constructive feedback we are able to know reliably where we should focus our energies and what are we like to deal with.
The 4Q exercise is a habit worthy of building in a leadership team, and one that provides the greatest value when it is regularly used and patterns are observed.