By Wendy Kram

Volatility is the new norm in today’s business world. Your customers are constantly reacting to changing business conditions-- searching for new ways to succeed in an increasingly complex global market. Is your growth strategy keeping pace with the changing needs of your customers? Strategies grounded in your customer’s reality have a better chance of succeeding than those created from an internal viewpoint.

Ask these important questions to develop customer based strategies:

1. What has changed for our customer in the last 12 months? Has demand for their products decreased? Are they acting quickly to capitalize on opportunities in emerging markets? Are they struggling to respond to changing regulations in their industry? What trends could drastically change the way they do business? LG Electronics, a South Korean electronics company, announced in late November it would eliminate its business-solutions unit in 2011. Losses in a key operating unit and declining demand for products in the U.S. and Europe lead to a 99% decline in third-quarter net profits.
   
   The firm is revamping strategies to drive growth in its components, healthcare and water businesses. It is likely your customers are facing equally difficult challenges and changes in today’s volatile markets. Customer strategies are constantly evolving and they are seeking creative solutions to help them drive profitable growth.
   

1. What does our customer need going forward?Don’t make assumptions about what your customer needs- ask them! What they need from you going forward might be very different from what they needed just one year ago. Interview key customers to gain insights into their current situation, opportunities and most challenging issues. Find out what they value most about your products or services.
   
   The newly appointed CEO of Delhi based IT services provider, HCL, spoke to many customers to determine the future direction of the firm. The customers didn’t talk much about HCL’s products, services and technologies; instead they talked about the employees. The interface with frontline employees was what the customer valued most. HCL used this feedback to create an innovative management structure which was a key component of the new business model they ultimately created. The company tripled revenue, doubled its market capitalization and became ranked as India’s best employer within five years of adopting the new model.
   
2. How can we revise our products or services to best meet the needs of the customer? In 2007, I was consulting with emerging businesses who were coping with the issues of rapid growth. They were experiencing a rapidly increasing top line with a sometimes volatile bottom line which often resulted in a high level of chaos and operational breakdowns. The recession quickly changed the priorities of these companies. Revenues plummeted and business leaders were forced to slash costs. Cash flow constraints, cut-throat pricing and survival became the reality for leaders in the new market. I shifted my approach from helping leaders manage rapid growth to developing and implementing business recovery strategies. Clients needed creative problem solving and support to make difficult decisions to ensure they survived the recession.

It is easy to stay in our comfort zone and assume we know the market, our customers and what is best for them. Look beyond the problems your customers are facing and find ways to help them raise the bar on their performance. Strategies grounded in your customer’s reality will create more value and differentiate you from competitors.