1. Matt Fleming President, MidwayUSA
Customer Engagement:
Building a Customer-Focused Culture
Matt Fleming
President, MidwayUSA

2. Customer Engagement Processes Building a Customer-Focused Culture
Customer Engagement is something near and dear to all our hearts at MidwayUSA. Our business operates in a hobby industry. Our company was founded 34 years ago by an entrepreneur with a love for guns and the shooting sports who wanted to turn his passion into a career. When you love what you do and those whom you serve, your Customers feel that love in everything you do. Your attitude towards your Customers shapes your culture and creates your environment. Are your Customers kindred spirits or are they dollar signs? Are Customers a means to an end or are they the reason you come to work every day? The culture and the environment sets the tone for how you treat your Customers; for the products and services you provide; for the kind of people you hire. Customers are extremely important and every organization, regardless of the industry, has Customers. Customers are an organizations most important Stakeholder. They are why we exist and what keeps us going. In order for an organization to achieve long-term sustainability, it must build and maintain a strong Customer-Focused Culture and great Customer Focus processes and that result in a high level of Customer Engagement. I’d like to direct your attention to the Customer Engagement white paper at your tables. This presentation aligns with the white paper so you can use it to follow along. Also, this is a pretty informal presentation so please feel free to ask questions at any time. There will also be time for questions at the end.

3. Baldrige in Perspective
7 Different Categories in the Baldrige Criteria
Customer Focus is #3
30 Different Leadership and Management Principles in Baldrige
Customer Engagement is #17
There are 7 different Categories in Baldrige and Customer Focus is Category #3. So, next to great Leadership to set and maintain the direction and a great Strategic Planning process for achieving sustainable results, Focusing on the Customer is the next most important thing.
Customer Engagement is also unquestionably a Leadership and Management Principle. As leaders, we need to develop a great understanding of the importance of Customer Engagement and ensure we have a great culture and great processes for achieving Customer engagement that are well integrated and deployed throughout our organizations. And, these processes have to achieve results so we know they are effective.

4. Customer Focus Category 3 Overview
This category examines how your organization engages its Customers for long-term success
A solid Customer Engagement approach includes:
Listening to and learning from Customers
Building relationships with Customers
Using Customer information to make improvements (innovation)
While this presentation focuses on Customer Engagement, which is item 3.2 in Baldrige category 3, Customer Engagement can only result from great Customer Focus processes. Therefore, we have to examine all of category 3, but we’ll be primarily focusing on Customer Engagement, which is the desired outcome of having great Customer Focus processes. The middle part of this white paper focuses on the Customer Engagement processes.
The overall approach to Customer Engagement is relatively simple and it’s cyclical. Set the Direction; Build the Culture; Design and Execute the Processes.
Category 3 primarily focuses on step 3 in the white paper; Design and Execute the Processes. But like everything else in Baldrige, it starts at the top and we have to talk about the entire approach. Steps 1 and 2 set the tone for step 3. Step 3 feeds back into step 1 and 2.

5. Going from Satisfaction to Engagement
Meeting Basic Requirements
Lack of Dissatisfaction
Engagement
Customer Loyalty
Customer Retention
Customer Advocacy
Before we get into the nuts and bolts of the processes, I want to direct your attention to the back of the white paper to look at some Customer Satisfaction and Engagement results.
Baldrige talks a lot about both satisfaction and engagement, but they aren’t interchangeable. Yes, you have to have satisfied Customers. But Customer Satisfaction isn’t enough. To be a truly great company, you have to have Customer Engagement. That’s what helps ensure sustainability.
There are different characteristics of satisfaction and engagement. Just because you have satisfaction doesn’t mean you have engagement. Satisfaction gets you by in the short-term until something better comes along. Some of the basic characteristics of Satisfaction are meeting the basic requirements of your Customers and avoiding dissatisfaction. We should never be satisfied with mere satisfaction. Engagement means you have won the hearts of your Customers and they are committed to you because you are an important part of their lives. Engagement means you have loyalty, retention and advocacy. You are important to your Customers and they love you.
There are several measures MidwayUSA uses to track Customer Satisfaction and Engagement. From Satisfaction to Loyalty to Retention to Advocacy, each measure represents a higher level of advancement along the journey from Satisfaction to Engagement.

6. Set the Direction
Building a Strong Customer-Focused Culture starts at the top
This is actually part of the Strategic Planning Process
Mission Statement
Customers and Customer Segments
Company Goals
Customer Key Requirements
Strategies
Results Review
Now, please open to the middle of the white paper. Although this portion has a heading called “Customer Engagement Process”, it isn’t really just one process. It’s a series of well-integrated processes that must be well-deployed and executed. This result is a community of highly engaged Customers. As we go through this presentation, you’ll notice a great deal of integration with other Baldrige Categories. For example, the Set the Direction step is mostly done as part of Strategic Planning and it starts at the top. The Build the Culture step is started by Leadership, but it’s integrated into all the other Baldrige Categories. The Design and Execute the Processes step is right in alignment with Category 3, but the processes only produce engagement if the Customer-Focused Culture foundation is solid, which is done in steps 1 and 2.
Setting the direction for building a strong Customer-Focused Culture starts at the top. If you were here for our Strategic Planning presentation, you’ll notice that this step aligns with the first step in Strategic Planning. Only here, we are focusing on setting the direction for achieving Customer Engagement, so we are focusing on Customers. (Go over the steps in the white paper).

7. Set the Direction
These are some of the documents that are created, validated or reviewed in the Set the Direction step. You have should have copies of these as inserts in your white paper. How important are Customers to your organization? In the Set the Direction step, Senior Leaders get the opportunity to decide. At MidwayUSA, Customers are #1 (they come first) and we capture that in many places. (Go over the documents).

8. Build the Culture
Once the direction is set, Processes have to be designed to align with the direction
Customers come first
Hire and Develop the right Employees that fit your culture
Build an Environment that allows for Empathy
Industry Involvement
Cross Training
Customer Focus Time
Communication (Deploy, Deploy, Deploy)
In the Set the Direction step, we identified the importance of Customers. Now in the Build the Culture step, we get the opportunity to back that up with our actions. The culture of an organization sets the tone for the environment, which is the foundation for which we build the processes. Do we put profits over Customers or Customers over profits? Of course, every organization has to be fiscally responsible, but it’s all about attitude. Do profits come at the expense of Customers or because of Customers. Do our actions and our words match up? If senior leaders are the Chief Customer Advocates and lead by example, then the organization will pick this up through osmosis. Once you have culture, then you have to hire Employees that embrace the culture so it can be sustained. And, you have to create an environment where Employees are constantly encouraged to think and act like Customers or ideally, be Customers. If your Employees are highly engaged Customers themselves, then you have a much higher likelihood of having a large community of highly engaged Customers. Some of the ways we do this at MidwayUSA are…. (use examples from white paper).

9. Design and Execute Processes
Listen and Learn
Customer Satisfaction Survey
Larry Line
Customer Complaint Management Process
Customer Focus Time
Social Media (Facebook, YouTube, Industry Websites, Blogs)
Once you have the direction and the culture then you can build processes to engage your Customers. One of the first things we had to realize in our journey from Satisfaction to Engagement was that we had to listen to our Customers. So we had to ask ourselves, honestly, Who knows best… us or our Customers? There was a time that we thought since we are our Customers, and we know the industry, then we know what our Customers want. That’s a great fantasy….but it’s just that, a fantasy. Baldrige taught us to “seek first to understand, then be understood”. You have to listen to your Customers, both directly and indirectly. Here’s how we do it… (use examples from white paper).

10. Design and Execute Processes
Determine Satisfaction and Engagement
Customer Satisfaction
Customer Dissatisfaction (Complaints)
Customer Loyalty
Customer Retention
Customer Advocacy
In addition to listening and learning from Customers, you have to have a systematic process for determining their satisfaction and engagement. I remember a time when we said rapid growth meant we had satisfied Customers and we didn’t measure satisfaction or engagement. We don’t think that way anymore. We have surveys and we collect information directly from our Customers in the form of complaints and compliments. As a result, we are able to have a fact-based determination of satisfaction and engagement and benchmark with best-practices. We take that information and use it to improve our other processes that affect engagement. Here are some of the ways we make these determinations… (Use examples from white paper).

11. Design and Execute Processes
Product Offering and Customer Support
Products
Services/Customer Support
Customer Policies
Customer/Market Data/Information
So, we listen and learn and we measure satisfaction and engagement. Now, using this information and the foundation we’ve built in the first 2 steps mentioned earlier, especially the department strategies that make up our Customer Value Proposition; we design, validate or change our processes for going to market. We determine the products we offer. These are the physical products themselves, the market niches, the breadth of offering within the niches; in addition to the pricing, the speed to market, the promotions, the quality of information; as well as what levels of inventory we maintain and how fast we ship. We determine the support and services we offer; the quality of our website, the features on our website, the level of service in our Contact Center, our s, our catalogs, our flyers, our Facebook page, our hours of operation, etc. We also determine what Customer Policies align with our strategies and help engage our Customers. If we want to be perceived as “Easy to do Business with”, do our policies reflect this or are they contradictory to this? This is extremely important because sometimes we say one thing, but our policies say something else. Finally, how do we use Customer and market information to make improvements to our products and services. We analyze things like our sales patterns, our website traffic, our catalog response rates, industry trends, Vendor reports and market share. These types of things, in addition to the listening, learning and satisfaction/engagement information help us improve our product and service offering and our Customer Value Proposition.

12. Design and Execute Processes
Build Relationships
Founder and CEO as Brand Representative
Meet & Greets at Trade Shows and Conventions
GunTec Content (“How-To Videos”)
Key Community Support
Social Media
Innovation
Now that we have great products and services that set us apart and engage our Customers, what other unique methods can we use to build great relationships with our Customers and build our brand? This is where you can really separate yourself from the pack. (Use examples from white paper).

13. Customer Value Proposition
Are you the same as others?
Are you special?
MidwayUSA’s Customer Value Proposition
Just About Everything
Promotions
Fast Shipping
Knowledge/Information
Larry Potterfield as Brand Representative
Key Community Support
The result of all these processes is you Customer Value Proposition. It’s at the center of what you do. What do you offer your Customers that makes you special. If your value proposition results in you being just like everybody else, then you may be able to achieve Customer Satisfaction. However, if your value proposition makes you special, then you can achieve Customer Engagement. Every company should be able to identify their value proposition in a statement or by identifying several strategies or processes. MidwayUSA does it by identifying its strategies and processes which result in engaged Customers.

14. Customer Engagement
Questions?