Volume 13 Number 5 - May 5, 2015


Repeat customers that are true fans of your business are hard to come by, easy to lose, and costly to replace. So how do you get and keep them? Understand what your target market really cares about, and then deliver consistency in perception and performance. Neither alone is sufficient.

Walmart's customers are primarily rural with limited alternatives, or urban focused on low prices. News of its products being produced in foreign sweatshops employing children won't harm their sales, as the savings perception is by necessity, more important than ethical issues its market. But if that company loses its market perception of "reliably inexpensive," sales would plummet. Its operations management must deliver on that expectation.

Apple created the "cool" cell phone and its market. Now competitors work to create a market perception that iPhones are for old people, not cool young adults. Equipment performance isn't unique among manufacturers, so retail outlets, buzz and delivery-as-promised with easy data transfer must meet expectations.

While Fed-Ex and UPS have both faced legal issues relating to knowingly carrying illegal drugs for delivery, both maintain a high quality reputation. Why? Their stature is preferred over the poorly perceived US Post Office.

So if perception is so critical to success, what is the role of performance? It's in delivering on the perceptions important to your market.

We trust our grocery stores, our drug stores, and our automobile dealerships to sell us legitimate products. If we discovered that Audis run a risk of being black market fakes, that company couldn't recover.

We expect "high end stores" to sell legitimate products made in production environments that comply with ethics and laws. If Nordstrom's supply chain were determined to include knockoffs made in sweatshops, the retailer would go out of business.

We can't be sloppy, make assumptions, or abdicate responsibility to suppliers. As a manufacturer or distributor, it is our job to deliver on brand promise, including on the perception we have created in the market. To do otherwise is to betray the trust of customers.

You invest in earning customers; invest also in deserving their repeat business.

Trust is a terrible thing to waste.

The Starting Pistol

Chinese Proverb:
"The best time to plant a tree was 20 years ago; the second best time is now.”

The Tape

Rebecca Morgan:
"Missed opportunities should not create regrets, but learning."

May 19, 2015: Jasper, IN: Jasper Engines and Transmissions is a remanufacturer with multiple locations experiences high mix and volume variation, including the condition of incoming product. The culture of JET, an ESOP company, centers around continuous improvement that supports their Five Pillars to Management: safety, quality, productivity, customer service and reduction of waste.

June 1-2, 2015: Ogden, UT: This is an opportunity to see one of the best companies in the world in action. Autoliv's Perpetual Improvement Machine event will showcase one of the few manufacturers in which continuous improvement really means continuous. As a participant in a proven workshop for executives and manufacturing management, you will review lean principles, participate in lean activities, and go to the manufacturing floor for the ultimate "go and see" experience.

June 24, 2015: Poway, CA: If you're interested in learning about Lean Accounting and useful operational measures from your financials, Metrics that Matter is a great opportunity. This full-day workshop with Brian Maskell, one of my favorite Lean Accounting gurus, will address all your initial questions, and no doubt, generate many more.

July 20-23, 2015: Seattle, WA: I rarely promote "for profit" events, but Lean Frontiers provides many outstanding "summits" throughout the year. Now it's time for the "Lean Coaching Summit." The agenda was designed on the premise that lean coaches instruct and counsel problem solvers at all levels – from those training the front lines on how to do a specific job correctly to those in top management seeking the survival and growth of an enterprise. And of course, everyone and every problem in between.

October 18-23, 2015: Cincinnati, OH: The AME international conference is in Cincinnati (the north side of the river!) this year. Plant tours, workshops, keynotes, special interest sessions, and practitioner presentations supported by numerous networking opportunities provide value alternatives every day. If you haven't attended an AME conference and want to learn about operational excellence, here's your chance. If you've already attended one, you already know the value.

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