Customer Focus: Are Customers Truly the Focus of Your Organization?

August 8, 2011

One of the first questions we ask any investment prospect during our due diligence is very simply: “How well do you know your market?”  A follow up question is typically: “In this market, who are your targets?” By asking these questions, we are really just looking to understand the company’s maturity in its understanding of its market, and its ability to focus on the most attractive subsets of targets in the market. Knowing full well that most prospects we talk to and indeed our portfolio companies are still very young organizations, we do not expect them to be industry experts on their market. We do, however, want the company management team to have a strong grasp on the market and a conviction on the right set of targets on which they should focus.

Our experience over time has taught us that simply understanding the market and knowing the targets allows a company to define a winning strategy, as described in our strategy development series on Market Participant Lens. We found that to succeed, the company needs to support its strategy with a disciplined, goal-driven and agile approach to execution, such as one that OpenView has also developed through our Extraordinary Execution framework. This framework ties the different functional and business levels of the organization together, helps them constantly sharpen their focus on the target market, and encourages agility and continuous improvement throughout the operating cycles with the use of planning, SMART Goals, and retrospectives.

Yet, I think that even with clear strategy and flawless execution, a young, growing company still needs to be constantly auditing itself to make sure that it is supremely focused on its target customers, which is the reason for the title of this post. This is because even sound strategies become irrelevant or even counterproductive over time, and internal management systems do not let you diagnose how well your organization is tuned to the market, and whether it has the ability to react to changes in the customer’s needs in the most productive manner.

To answer the question in the title of this post, a CEO should regularly look at the 6 different aspects of his organization and evaluate their “customer-focusedness”, or their capacity to do so.  For each of these aspects, we have built several questions to help you further diagnose your organization and identify areas that can be improved:

The Customer Focus Diagnostic Tool

1. The Company’s Aspirations: Mission, Vision, Values and Priorities

a. Is serving the target customer’s needs part of your mission?

b. Are the target customers among the top priorities of your organization?

c. Do you espouse values that are important to your customer or their experience with your services/products?
2. Management Goals and Metrics

a. Are there key management metrics that measure the growth of the target customer base?

b. Are there key management metrics that measure the experience of the target customer base?

c. Are senior management team members responsible for at least some of those metrics?
3. The Company’s Strategy

a. Is your product development strategy aimed at building a product that solves the most important needs of your target customers?

b. Is your product development strategy insulated from inputs that do not align with customers needs?

c. Is your Go-to-Market strategy aimed at bringing your product/services to the target customers in the most efficient and effective manner?

d. Is your Go-to-Market strategy aimed at delivering to the target customers the most relevant information on how your product/services help them address their needs?
4. Information Capital/Decision Support Systems

a. Do you have sufficient data on your target customers, their needs, and experiences?

b. Do you have repeatable processes and supporting information systems that let you keep your data up-to-date and scalable as your customer base grows and changes?

c. Are these systems and processes available and accessible for your company’s employees, barring those containing confidential data that needs restricted access?
5. Organization Structure

a. Are your customer-facing departments related together in a way that your organization has a comprehensive, coherent understanding of the target customers experience with your company/product?

b. Are there employees in your organization who are more than 2 degrees separated from the customer?

c. Is your organization structured in a way that customer experience and feedback determines a major part of every team’s performance and measured goals?
6. People

a. Do all of your employees understand and appreciate the importance of the customer in every aspect of your organization?

b. Do all of your employees have the appropriate training and skills for them to ensure that they are customer-focused in every task they do?

c. Do you emphasize “customer-focusedness” as a hiring criterion for your organization?
Are there other key questions/areas that would make sense to include in this list? Please let me know!

Chief Business Officer at UserTesting

Tien Anh joined UserTesting in 2015 after extensive financial and strategic experiences at OpenView, where he was an investor and advisor to a global portfolio of fast-growing enterprise SaaS companies. Until 2021, he led the Finance, IT, and Business Intelligence team as CFO of UserTesting. He currently leads initiatives for long term growth investments as Chief Business Officer at UserTesting.