Customer Listening Pays at P&G

A.G. Lafley, P&G's successful CEO, has made it mandatory within the company to listen to customers. Not by reading third-party market research reports or regurgitating bland macro-consumer studies. But actually getting into the trenches and observing real customer behavior. "Spending a day in the life of your customer" apparently pays (P&G's turnaround proves listening to customers pays; July 2005)

• Lafley set out to change P&G's culture, first by insisting that it start listening to its customers. That was something Lafley himself started doing more than 20 years ago, when as head of P&G's laundry-detergent business, he went as far as asking customers
  for permission to install cameras in their laundry rooms so he could see exactly how they were using P&G products.
  
  
• That caused P&G to design new packaging for its detergents when the cameras revealed that women who had told P&G executives that the existing packages were easy to open actually were using screwdrivers to punch holes in the boxes.
  
  
• As CEO, Lafley still regularly visits P&G customers in their homes, trying to learn how the company's products can be made even more appealing.
  
  
• How effective is this idea? Consider this: In the five years since Lafley assumed the top job at P&G, its earnings have increased an average of 17 percent each year while its stock price has more than doubled.