The Five Minute Business Diagnostic

One of the benefits of having evaluated and advised so many companies, is that I can quickly see the patterns that connect underlying conditions with overarching needs. I thought it might be helpful to share one of my techniques: The Customer Response Profile.

I can use this chart diagnostically or analytically. As a diagnostic tool, I can observe the strength of the company brand and whether the business dialogue is geared towards its customers or its products. The resulting intersect will place the company in one quadrant or another to varying degrees. Conversely I might observe how customers interact with the company, which would also indicate a prevalent quadrant:

Quadrant 1: The company is a proposal mill, pursuing any available opportunity and focusing on revenue over strategic growth. A weak brand and product-centric dialogue creates a price-centric relationship.

Quadrant 2: Customers are somewhat indifferent. Even when the seller does a good job, buyers resist long-term relationships. Adding better customer service wins more business, but a weak brand undermines customer loyalty.

Quadrant 3: When customers seem genuinely pleased with the finished product, but aren’t happy with the journey – they become more demanding. The strong brand of the seller makes the buyer expect more, but the lack of customer focus hurts the seller’s ability to please.

Quadrant 4: When sellers get the formula right, buyers not only rejoice in the quality of the product or service, they inquire about other offerings. High growth, high profit companies are the ones that meet the demand with additional offerings and deeper relationships.

The diagnosis is quick and easy to apply yourself. The real work comes after, as each quadrant represents a specific issue that I need to help the company resolve. Quadrant 1 reveals that my highest priority is to develop the management team into a more effective resource. In short, any improvement in brand or customer focus requires a mindset shift in the folks that hire and manage employees, dictate processes, and allocate resources. Success will help drive the company into either quadrant 2 or 3, which dictates my next area of focus.

Quadrant 2 companies need to rethink and apply improved sales and marketing efforts. This might begin with sales management and team structure, but will surely involve a deep dive on pricing, marketing, and business development.

Quadrant 3 companies tend to be either operationally lacking or dominant. If lacking, we will likely focus on personnel, process definition, and work flow. If dominant, we probably need to simplify processes – removing the customer-unfriendly elements.

If we get Quadrants 1, 2, and 3 running well, then we can afford to consider Quadrant 4, which diagnoses as an opportunity to focus on Strategy. Strategic initiatives have a much higher rate of success if we can remove obstacles such as weak leadership, ineffective marketing, or cumbersome operational processes. Healthy companies tend to reside in Quadrant 4, but will need to monitor the other areas as their strategy evolves.

A final note on diagnostics: They can change, quickly. It behooves us to monitor progress and reevaluate frequently. Overlooking progress can undermine a lot of valuable effort, and one wrong step can quickly degenerate brand or customer focus.

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