Instead of the warning that is probably repeated thousands of times on all airlines every day–to use caution when opening overhead bins–it would be nice to hear that they have handled the situation. It would be practical and valuable because, in fact, this is a problem for both the passengers (if the baggage fell out and hurt someone) and for the employees (who have to repeat the warning day after day). It’s a double opportunity.

Or, what if a rental car company advertised that its cars are the cleanest in the industry? Instead of being happy with an average job done by their cleaning crews, they could “own” that niche in the market. Think of the potential advertising campaign that could happen. How quickly would word spread among customers if one rental car company claimed to be cleanest–and backed up that claim? Customers would know they are never going to have to worry about picking up a dirty car when they rent from the company. Employees would routinely clean to the higher standard and, therefore, have fewer cars returned by customers to be re-cleaned. They would also have more pride in working for the company that promises the cleanest cars. It’s another double opportunity.

When you attain that type of differentiation, you have premium positioning against the competition.

One-dimensional companies look at what they can or cannot do, rather than what the customer needs or values. Customer-centered companies think proactively and innovate in ways that will benefit the customer. These creative ideas almost always work out better for employees, as well. That’s why they are double opportunities.

Her phrase “running to stand still” refers to companies in hyper-mature markets, with little growth, that are frantically working to differentiate themselves from their competitors through minor changes that are almost unnoticed by customers. These companies are driven by  “assumptions embedded in our competitive practices simply crying out for re-imagination.”

In most cases, the problem is a reluctance to risk significant changes. By focusing on what competitors are doing, organizations try to tweak small features and wind up delivering many kinds of sneakers, or shampoos, or luxury hotel amenities that seem to be the same as their competitors offer. Companies are asking: How can I look different without really changing a lot? They know that the world is changing faster than ever before, but they still want to play it safe.

Companies should be asking: What things are our customers missing that we could give them (which will make us really different)? Being customer-centered is the essence of differentiation.

In the Quality field, there is a Cost of Quality concept. Essentially it is a measure of  failing to deliver quality products and services. The lower the number, the better. The theory behind the Cost of Quality metric states that the more time that is spent on up-front (Prevention) activities, the less time will need to be spent afterward on assessments and dealing with problems.

What if we had a Cost of Differentiation to measure not being different? It would quantify the potential impact if an organization gave customers greater value than its competitors are currently providing. It would also encourage more proactive ideas from the company to stay ahead of the curve. The Cost of Differentiation in the MP3 player market before the iPod was introduced turned out to be millions of dollars.

When suppliers embrace customers, rather than watching what competitors are doing, the game changes. Not only does the customer benefit, but confidence in their ability to answer customers’ needs improves dramatically, leading to even further innovations. Focus on new ideas for customers. That is the only way NOT to stand still.

Thus, the task is not so much to see what no one yet has seen, but to think what nobody yet has thought about that which everybody sees. –Arthur Schopenhauer.

Too often, in our businesses, we lapse into cruise control. We get away from the core value of being customer-centered and what was once our purpose loses its vibrancy. There are three levels of purpose that define how we relate to customers. Freshness and growth, however, happen only at the second and third levels.

Level 1 is the basic, transactional level. It is necessary, of course, for survival, but not sufficient for growth. Think of it as embodying what Ted Levitt wrote almost 50 years ago, that the “purpose (of a business) is to get and keep a customer.” (Marketing Imagination). In fairness, at the time that he put forth that concept, most executives would have answered that the purpose was “to make a profit.” Level 1 represents what happens when an employee delivers “good service” (friendly, helpful, etc.) in a typical buyer-seller event. But, if we are not mindful, it’s too easy to become immune to our experiences and fall into a rut, believing this is all we need to accomplish.

Level 2 is embodied by a “solutions” approach. This is how Levitt described it in his HBR article “Marketing Myopia”: “Customers don’t want a quarter-inch drill. They want a quarter-inch hole.” Activities at this stage are operational and enhance our purpose well beyond the actions of pleasant employees offering an expected level of service. It is more customer-centered because it causes us to define the corporate purpose in terms of value to the customer rather than the product we currently sell. It is much better because it involves evaluating every touch-point in our processes to look for improvements that the customer will notice and appreciate.

Level 3 is transformational. At this stage, organizations have created a system that hones their capability to develop complete attentiveness to the customer. It provides a way for truth to emerge. It is based on design thinking, which makes us attentive, like a good designer and helps us “discard pre-existing ideas.” (Milton Glaser, Drawing is Thinking) It will help us to connect seemingly unrelated ideas or processes. As in design, we become deeply aware, or conscious of, what we are looking at only through the mechanism of trying to “draw it.” Ambiguity in business disappears because it clears the mind of all the clutter and lets us focus on what the customer will value. It is the nexus that positions customers at the center of a situation or process and connects them with our business as a whole.

This culture of “thinking what no one has thought about what everybody sees” is the essence of Level 3 behavior and will lead organizations to rise above the complacency with their everyday experiences. It is strategic, because working at this stage, as Glaser says, “moves the mind” to structure a new reality for customers. Level 3 attentiveness to the customer, like design, contains “the energy of its maker.” It generates success because it is grounded in the philosophy that the customer completes the work we are doing. Naturally, when organizations navigate to this way of thinking, they heighten customer loyalty because this approach differentiates them in the eyes of their customers.

The activities and thinking that take place at Level 3 create a new type of passion that radiates customer-centricity. The drive to Level 3 is the most purposeful goal of any organization. In design, Glaser says, “The task is to understand what we are looking at” and the same techniques apply to help us view our businesses in the context of what the customer is thinking. Level 3 frees up learning through movement and experience to generate a fresh, attentive view of how our products and services impact our customers. The result is a wholeness that the customer experiences and values.

90% of the current business literature highlights large corporations. Yet, there are many customer-centered companies, which are “flying under the radar,” that are better models to follow. Hermann Simon, in Hidden Champions of the Twenty-First Century, describes 46 companies that have a single-minded vision to be customer-centric. They all describe their greatest strength as the “long-term relationship with their customers.”

First, these hidden champions collaborate with customers on innovations. They operate in narrow target markets instead of chasing diversification and they work fanatically on serving the customer needs in those markets. This is not lip service. They avoid the risk of distraction from their core business by connecting with customers to develop incremental improvements. To offset the risks of being attacked by standard products, which will endanger their premium positions, they wisely resort to being the closest to their customers. Zumtobel, for example, used a strong understanding of customer needs to develop adjustable dimming-on-demand lighting and ribbons-of-light installations for modular uses in modern buildings. The focus on meeting customers’ needs has fostered growth which has made these hidden champions the best performers in their industry, because they have, through customer closeness, become what Simon calls “great innovators.”

Secondly, they are, to borrow Peter Drucker’s term, “monomaniacs with a mission.” They are obsessed with focusing their resources on their customers. Direct customer relationships are critical success factors. It is not just theory. According to Simon, the percentage of employees from these hidden champions in regular contact with customers is five times higher than in large companies. By being closer to the customer than their competitors, they also are poised for “swift reactions to changes in customer needs or new technological developments.” Because they embody a strategy to avoid weaknesses through communications which insures that technology and customer needs do not drift apart, Simon aptly describes them as “ferocious defenders.”

It is refreshing to study success in organizations which, by Simon’s own description, are “normal,” instead of trying to imitate only large corporations. But these companies are far from average. These hidden champions have been willing to do the work necessary to structure a business model that is advantageous to customers. Rather than operating in an environment of risk and uncertainty, they embrace their customers’ needs to make their own organizations better. They are customer-centered role models for businesses everywhere.

Virtually every run-of-the-mill book on customer service pontificates about how an organization must have a process in place to recover (in the eyes of the customer) from service problems or missteps.

This, of course, is true, but it is hackneyed, boring and only tells part of the story. It is necessary but not sufficient any more. The unfortunate result is that it trains us to operate with a break-even mindset.

That is because the typical prescription in these cases only focuses on the transactional issue and how to get the customer back to even (i.e. to the absence of the problem). It’s the principle of recurrence. We are myopically focused on the problem not happening again. So, we apologize and perhaps offer some sort of compensation. In today’s business environment, this break-even direction should be viewed as expected, as the minimum. The much more favorable direction is in building an abundant relationship with that customer.

I stayed in a hotel in Johannesburg recently. The situation, however, was that it had only been open for five weeks and should have remained closed until the management had worked out their problems. Believe me, there were many of them. But not only did the staff take care of these issues, but after the manager got me back to “even” he continued to build the relationship with me through exceptional, personalized service—using my name in face-to-face greetings, continued follow-up and attention to detail just for me. He made me believe I was the best customer he had ever had. Not only did I forget about the earlier issues, but I was feeling great about the entire three-day experience.

Service recovery means staying with that customer, through follow-up, through unexpected contact after the fact. We should deliver exceptional service to each of our customers, of course. But the ones that have experienced an underperformance represent a touch-point that defines an organization. This is an opportunity to turn them into enthusiasts and maybe even evangelists. It is accomplished by inhabiting the mind of the customer for a time. It goes far beyond a break-even reaction to the problem. It is about anticipation about how that event can and should happen in the future and the willingness to work for that change.

Research which we do for our clients indicates time and time again that customers who reported a problem and were delighted with the outcome have higher satisfaction than the ones who never experienced a problem at all. Why would any company simply want to break-even with these opportunities? Service recovery should energize the organization to become more customer-centered. It should put demands on our imagination. It should trigger that vision, to make us think how we can make it even better than what it has been up until now.

There are two paths to take when companies don’t provide their customers with the best service. Customer-centered organizations always take the path toward abundance and innovate with creative solutions to delight customers.

There is a new car wash being built about one mile from my home. It is going to be a beautiful brick structure with easy access from the road. However, it is still only a car wash unless it distinguishes itself. I wonder what the owners’ plan is for offering their customers something different than the other car wash businesses in the area (and there are several). I wonder how they will instill in their employees a sense of providing high value to all customers. I wonder if they believe the business can be successful without being unique.

Customer loyalty is hard work. It is even more difficult for a new, unproven company, because that business does not have the luxury of returning customers. Every business must differentiate itself by providing more value to its customers. The paradox is that in order to be different from your competitors, you must ignore them. If you are constantly looking at what your competitors are doing, you will simply end up imitating each other. Being customer-centered, on the other hand, brings better clarity to organizations because it focuses them on thinking like a customer, instead of a competitor.

Customer loyalty is great, of course, but you have to pass through customer loyalty on the journey to customer certainty. If you want to be certain that your clients are going to return again and again and never leave, design a culture in which every touch-point is evaluated from the mindset of the customer. It must be an environment that develops new ideas, big and small, that will create for your company a place of distinction rather than sameness.

There is no complete certainty with customers. The best you can hope for is to distance your organization as far away from ‘uncertainty’ as possible. And the only way to ensure that superiority will happen is by being customer-centered. Think about what matters most to your customers, rather than how to temporarily maneuver ahead of your competition. I promise to update you periodically about how successful the car wash business is and how certain it is that its customers will return.

Fill in the blank for your organization: “An educated customer…” If you believe that the answer is “will want a lower price” or “will look for a better product or service elsewhere” then you are living on borrowed time. Educated customers are not a negative–just the opposite. Customer-centered companies want to educate their customers, because they know that these customers will value this information that no other supplier is providing to them.

Persuasion is a way of life these days. The best way to persuade customers to buy from you is to be proactive. Entice them first with your knowledge about your industry, then with your willingness to share that knowledge. If you want to be the market leader, show your customers that you are the expert that they need. Be generous with your knowledge and you will create a community, far superior to the traditional buyer-seller relationship.

Here’s a related concept. Many of your customers don’t fully appreciate what your value could be to them. That’s right. Every company has customers that do not understand the full portfolio of how that company could make them more successful. This disconnect was proven recently in a study we did for one of our clients. Customers who were doing business with that organization did not know about all of the offerings that they should be tapping into from this supplier. It was an opportunity for both supplier and customer to get better and to work together more closely. The education process is already underway inside our client’s company to make that happen.

Education is the broth in which your brand is cooked. Customer loyalty is driven by appreciation for your value proposition. Educated customers will tell others about your value.

Customer-centered organizations are secure in sharing knowledge with their customers. Education becomes part of their value proposition, which will make customers never want to leave them. When you are the customer in your own daily experiences, you want to be as informed as possible. Turn that idea around when you are the supplier. Think like a customer.

There are three categories that your customers will use to describe your processes:

• Really Poor-Ugly, supplier-centric procedures that make your customers wonder why they are buying from your company
• Ordinary-These interfaces make you look the same as your competition. Frankly, they are just average.
• Extraordinary-When a process is really better, you deliver reactions of ‘wow’ and delight. It is unique and compelling to employees and customers at the same time.

Thinking like a customer, have your staff describe several of your processes and argue in favor of the adjectives that they use. It is critical that they approach the task from the customer’s viewpoint. They should say, “The customer sees this event (your ordering process, for example) as cumbersome or the same as our competitor’s process or very user-friendly.” It should be somewhere on a continuum of really poor to remarkably good.

Hopefully you know how to address your really weak areas. Most of your touch-points, however, will fall into the Ordinary category. But you want them to be better than your competition, don’t you? Take these into the Extraordinary category by making them easier or more enjoyable for your customers.

Recently I ordered new personal checks from Deluxe Corp. I was delighted when the checkbooks were delivered in a flat envelope rather than the old-fashioned boxed shipment. The checkbooks were packed end-to-end and included a flat box, which recipients can set up for storage in their desks. The creativity of the packaging was exciting and the company included a description about the significantly better security and safety of the new package. Because the envelope was sturdier and weatherproof, Deluxe told me how it “pampers my checks.” The change made perfect sense and I wondered why it had not been thought of before. It was definitely not ordinary.

At the extraordinary level, work on function, not fashion. With each change you make it better for your customers. Rethink how your organization creates value – in process, not product. Get your employees involved. They know where the problems are. Put yourself in your customers’ shoes and ask why your organization continues to perpetuate processes that are not customer-focused. The chances for streamlining will become obvious and will catalyze your efforts to turn average into remarkable.

Nurture a culture which believes you can improve everything. Yes, everything! Challenge your team to become better than your competitors. But don’t stop at one or two changes. Model every innovation as “taking you further”. Crystallize new ideas around customer impact. The key to becoming extraordinary is to think like a customer.

We know it is impossible to draw an accurate picture of the future. As Yogi Berra said, “It’s tough to make predictions, especially about the future.” But we continue to offer our best guesses because we want to know what the ‘great unknown’ might hold. Optimistically, we see the future as having limitless possibilities. On the other hand, there is pressure in the short term to invent the future for our customers before the competition does.

When I do these brainstorming sessions, participants are encouraged to break the rules in order to uncover fresh ideas; to account for worst case scenarios; and to evaluate risk-reward tradeoffs. If people are too close to the status quo in their industry, I have them shift into a completely different industry where they are the actual customers. If they work in manufacturing, for example, they usually have no problem articulating what they want from their mobile phone company in the future. This exercise, of course, helps them to look at their own products and services from the customers’ point of view.

This brainstorming is not to be done casually. That is why a disciplined approach is needed. We ask our groups to challenge market sector assumptions through creative perspectives and patterns. The significant impact of new technology always must be considered. Participants must figure out ways in which their organization can reverse engineer their futuristic ideas faster than their competitors.

To assist in this creative undertaking, I recommend Jane Buckingham’s What’s Next. She has compiled the opinions of experts in 50 fields about their expectations for the future Reading it will provide you with perspective of how logically changes can occur, based on current trends. The future is, in fact, a series of small steps that lead to bigger change. Change happens progressively over years but we must aggressively pursue it, since it can happen faster than we think. Therefore, we have to be the architects of the future and create it in small ways that will lead to larger trends.

The most important determination, however, in changing the future will be how the changes will it make your customers feel. The goal is to listen to our stakeholders and try to improve the way they experience the world.

Can you imagine your future without your customers? Of course not. That is why we make sure the model includes them. Scenario planning, which used to be a luxury, is now essential for all parts of every organization. The good news is that it’s doable. It requires a comprehensive knowledge of the present and getting better educated about customer needs that are still out there. Get everyone in your organization focused on a different kind of future. It will generate heightened energy and will inspire teams to work collectively on actions that will get you there.

The future will belong to (drum roll, please) the organizations that have the most committed customers. Everyone else risks mediocrity and perhaps extinction. Design solutions—both products and services—at every touchpoint with your customers. When you make a better future possible for your customers, they will become amazingly committed to you. By being customer-centered, you will define a space in your client relationships that is way ahead of your competitors—all because you framed your opportunities by thinking like your customers.

Tara Hunt, in The Whuffie Factor, devotes an entire chapter to “Be Notable.” Whuffie (or social capital) is gained or lost through negative or positive actions. People will connect with a company through amazing customer experiences because it has given them “something that moves them.” She cites numerous businesses that injected fun, imagination and experimentation into their cultures, which made their processes memorable and created an emotional connection with their customers. Amazon, for example, designed a universal wish list that customers may use to share products from other websites that their friends can purchase for them. Although Amazon gets no commission, it “realizes that its customers are multi-brand loyal and by sending them away, they are sure to come back on their own volition.”

Another example that illustrates Hunt’s appeal to “go above and beyond” appeared recently in a story about Hyatt’s treatment of its most loyal guests. In a blog post from CEO Mark Hoplamazian, Hyatt facilities are beginning to recognize their Gold Passport members with “authentic hospitality.” They are empowering employees to perform random acts of generosity, such as “comping” a massage or picking up a bar tab for a very loyal member. According to www.springwise.com, it is “a shining example of the kind of corporate generosity that’s increasingly being…offered by clued-in brands.”

Elite customers are now expecting higher-end recognition of their status. “Loyalty programs only work to reduce price competition where the rewards to loyalty are substantial, and customers as a consequence concentrate their purchases.” (Bruce Greenwald and Judd Kahn in Competition Demystified) The way to make these rewards more “substantial” and to raise the commitment of already loyal customers is through the human side of the relationship. After all, these are your ideal clients—the types of customers that you want to work with. Why not single them out with high-touch, personalized value. Address them with “corporate” self-confidence rather than anxiety that they will take advantage of you.

This is upstream thinking. These top customers have already proven that they like your value. Now, help them build a stronger relationship with you. The ability to see how addressing the needs of select groups of your most loyal customers will be the new differentiator that will grow your bottom line. The successful companies with the most loyal customers will be the ones that give people something to pay attention to and that create the desire to tell many others how “This company’s employees really know me as an individual”. It is no longer about gathering better information; the secret is in better use of the information that you already have about these premier customers. It is specialist performance rather than generalist.

The more notable you are, the less susceptible your customers are to the lure of lower pricing somewhere else. It’s customer performance that manifests itself as palpable. Amazing outcomes are grounded in a culture of abundance that embodies a willingness to look for how to add value to customers. It’s the kind of treatment that makes customers want to tell twenty of their friends personally or post a story on the web to thousands. Breathe life into your customer relationships because winning is more fun than losing. Give your customers your best. Be notable.