Dmitry Leus: Aspects of the "Lean-Approach" Business Trend
Dmitry Leus admits that the client-orientation theme is one of his favorite ones, thus he tried to explain why. Before going into details, Leus suggested to return to the 1990s, when many companies in the post-Soviet area faced extremely difficult conditions.
In the middle of the 20th century, at a time when many manufacturers began to face the problem of overproduction and surplus stocks of products, an actual and extremely important issue was the construction of such a marketing strategy that would allow developing not only theFF market itself but also the product.
On the way of increasing consumer demand for goods there were two main obstacles:
- Sufficiency or almost complete satisfaction of the consumers by the previous acquisitions. This is the case when it is important for the family to have a TV.
- Standardization or improvement of product quality, when the product was practically deprived of individual characteristics.
That is when the concept of client-centered approach was born (founded by the well-known American psychologist Carl Rogers) and the ideas that business does not start with a good or product, but with a client, began to develop intensively. It starts with the client’s needs, his desires, motives, and interests.
This important and relevant topic has been discussed during the last interview with a businessperson, entrepreneur, and investor – Dmitry Leus.
The first question dealt with Dmitry’s observations concerning the change of the approach to the client and the problems that companies face while working with clients.
A great era of stability and sluggishness had ended, and it was necessary to take quick steps that would allow people to somehow stay afloat and simply survive in new conditions. It was a challenge and a test of strength.
At that time, no one was thinking about customers – there was a deficit in the country and any filling with a product or service was met by the market “with a bang.” The principle was simple – buy low, sell high!
As the market became saturated, many companies began to realize that the mere availability of “goods in stock” is not enough. It was needed to stimulate sales channels, conduct advertising campaigns and win the hearts of customers.
At the beginning people fought for all clients, then they fought for their customers and gradually came to the fact that it was necessary to build relationships with customers and enhance the impressions of the product, of communication with the company, the market segment in general.
And if in the US the client-centered theory was spoken already in the 60s, then in our country this topic began to develop actively approximately after 2000. This 50-years-gap had to be cut very quickly.
At the same time, many companies have faced (and still face) three main problems:
The first problem
- The first problem is the cognitive mistake “I know.” Perhaps this is the most common and most dangerous mistake that companies face. Check yourself and answer directly and honestly to the question (appealing to the reader) – “Do your customers really want what you think about your product/service?”
- Dmitry noted that in his career, many years ago, he met some entrepreneurs who built their own business and brought a product to the market, solely on their inner understanding of what is “valuable or not valuable”. Many of them “burned down”. Because they simply misunderstood true needs of customers.
- As a consequence of the first reason, many companies began to perceive the notion of customer-centricity as good customer service or first-class service. That is it!
- Behind the scenes, often remained the fact that the price of the product was overstated or clearly stood out of the market; that the quality of the product itself left much to be desired. In this situation, no high-quality service could help – on the contrary, the client had a cognitive dissonance when he bought a frankly not high quality or expensive product, but with an artificially high level of service.
- And not the last role here played the first head of the company, who often built a “template service” based on his view of the world. Although the solution to the first problem is very simple and effective – “CONSTANTLY COMMUNICATE WITH YOUR CLIENTS!”
- Dmitry shared some rules that he adheres to in life, and one of them sounds like “Not a day should go by without communicating with the client!” It helps a lot to feel customers and keep, as they say, a hand on the pulse! However, there is one secret here, without which it is hard to succeed.
- The secret is that it is extremely important to intent to understand the client! It is needed to understand the client without an expert position, without complex marketing research and focus groups. Just listen to customers and understand what they actually need and what is valuable to them!
The second problem
- The second problem is “wishful thinking.” What does it mean? Regularly, companies, fearing to reveal their worse side to the client, on the one hand, and trying to entice a large number of new customers with their inflated promises, on the other, find themselves in a situation when the client’s expectations concerning the company’s level are much higher than the level of the service provided. It is sort of a self-trap, which many people come across.
- Nowadays, it is almost impossible to satisfy the client by 100%, and even if the success was achieved, it does not mean that the client is completely satisfied and loyal! The client will always have new requirements – higher and higher. It is necessary to simply accept it and take into account in the future. So what is the solution?
- Tell the client what can be expected honestly! It would be even better to slightly lower client’s expectations, and do more in fact. In this case, the client loyal to your business and your customer product could be acquired. It could be a cup of coffee, free taxi, availability of good Wi-Fi, etc.
- Dmitry again appeals to the head of the company, who may not know about all the problems of the client due to “business and workload”. How to fix it? Dmitry Leus encourages leaders to “join to customers”, work as a seller once a month (or a quarter); review and respond to customer’s complaints that hotline receives; analyze competitors and become a consumer of their product or service; be the consumers of your services or products yourself and just keep the eye on the customers. Sometimes simple observation is much better than any words!
The third problem
- The third problem is “treating the symptoms, but not eliminating the reasons.” This is the situation when the front office is tried to be made client-oriented. If something goes wrong within the sales department, it is their fault. Later, of course, it turns out that the logistics department could be partially blamed for it, due to not delivering the goods on time; accounting department could be blamed for messing up the documents and wrong invoicing; and no one is picking up the phone in the call center due to the failure in the system, etc.
- This is what Dmitry calls “treatment of symptoms.” Therefore, it is very important for the front office to act as a client’s lawyer and be an internal customer of the service (the concept of “internal customer / internal supplier”). This emphasizes confidence in the company, in the product and, ironically, in yourself. In addition, this gives an increase in revenue of about 25%.
- In addition, speaking of figures, it is important to assess the effectiveness of the actions in specific KPIs (increase LTV, reduce the cost of working with complaints, increase the level of recommendations and repeat purchases, etc.), otherwise, this activity may be abstract and uncontrolled. Besides, it is important to observe limits, and not to go headlong into “narrow optimization”.
Companies that overcome these problems are today market leaders and show a steady increase in revenue, despite the crisis moments and all sorts of internal and external constraints. There is no magic or secrets in it! This is the result of a step-by-step and very hard work. Thus, if they succeeded, everyone can do it either.
The second point of discussion considered the importance of the client’s impressions of contact with the company or its product.
Dmitry claimed that having a great product does not mean having loyal customers. He shared a quote, which reflects the essence of the situation:
“The company should look at the world through the eyes of its customers! This is tantamount to a feat.
Many companies do not react to feedback from their customers, avoid it, fearing that it might cast doubt on the most valuable thing – their product! “
Impression is an emotion, which is associated with our purchase! The impression can be measured. Moreover, it needs to be divided and managed by each element separately:
- Overall impression of the niche or segment
- Impression of consumption or use of the product/service.
- Impression of the brand, company (marketing)
- Impression of the product or service itself.
Each of these areas can be managed, thereby increasing the overall level of the client’s impression.
If the client-oriented issue is considered a little deeper, today appears the situation when management replaces marketing. This may sound a little strange, but those companies that build customer service strategies and build (this is a purely managerial function) through the whole company a client-centered approach, are in a better position due to the fact that:
- Goals are clearly defined and all the departments move in one direction
- The company’s resources are correctly redistributed and used effectively
- Orientation on the values and understanding of the client
- All points of the client contact with the company are traced and the emphasis is made on the process of interaction, and not only on the result
- There is an understanding that not all potential buyers can become customers
Such companies have several variants of scenarios, they are mobile and can quickly adjust to constantly changing needs of customers. This is where their strength comes from!
The last question dealt with the relevance of so-called lean-approach on the Russian market.
Dmitry claims that this is the trend! Not taking it into account means losing the competitive advantage. It will directly affect your business and result in overpricing, un-optimized business processes, not user-friendly service or an outdated technology.
In the context of this conversation, the lean approach is a precise and well-adjusted attitude to the client. This is a constant monitoring and continuous actions aimed at improving communication with customers and improving their impressions. This is a sort of “small steps” technique, which allows constantly improving the efficiency of business and having a high competitive advantage in the market!
Dmitry noticed that the lean-approach appeals to him. Because of these 4 simple steps that will help to improve business:
- Make a plan properly, based on the needs of customers and market trends, and not based on your capabilities.
- Perform the job in a good way! Give the customers a little less information, but do more in fact – manage the impressions!
- Constantly monitor the conformity of the product to customer’s expectations.
- Adjust the product/service in time and strengthen competitive advantage.
In conclusion, Dmitry encourages everyone to adhere to these principles and the results are pleasantly surprising.
Source Imperium Investments