What I call “customer centricity” begins with creating a business culture where the customer is at the center of everything you do. In today’s highly competitive marketplace, it doesn’t matter how great your products are or how exceptional your financial prowess. As Don Peppers and Martha Rogers wrote in Return on Customer, “Without customers, you don’t have a business. You have a hobby.”
In other words, “customer-centric” isn’t just a buzzword — in the business world, it’s mandatory. But too many CEOs or entrepreneurs will just add “customer-focused” to their vision statement and call it a day. That isn’t enough, by far.
True, customer-centricity involves rethinking how business is done. It involves everything from strong efforts at insight and analytics to strategy and customer experience. It involves tearing down silos and thinking like a customer. For instance, your customer views all of your departments and functions as a single entity — and so should you.
Read the full article here.
Ian Golding touches on an all-too-familiar occurrence we all see in organisations we work in from time to time.
“Over the last twenty years, I have worked in a variety of organisations across multiple industries who have all TALKED a very good game when it comes to being customer focused. If I had a Pound or Euro or Dollar for every senior leader who has uttered the words – ‘we want to put the customer at the heart of everything we do’ – I would have a nice little pile of cash!”
As Ian explains “Talking about Customer Experience is EASY. Literally anyone can do it.” but…
“The reality is that to START actually being customer centric, an organisation must acknowledge that it may not actually be customer centric in the first place. That is why the transition from TALKING to STARTING is HARD.”
However, once an organisation has started…
“When it comes to Customer Experience, an organisation’s ability to SUSTAIN its approach to Customer Experience INDEFINITELY is without question the HARDEST challenge of them all.”
See Ian’s insightful thoughts in his full post here.
Seth Godin recently authored an insightful post on his Blog…
“Customer service is difficult, expensive and unpredictable. But it’s a mistake to assume that any particular example is automatically either good or bad. A company might spend almost nothing on customer service but still succeed in reaching its goals.
Customer service succeeds when it accomplishes what the organization sets out to accomplish.”
Seth goes on to articulate many uses of Customer Service, including:
- To create a significant competitive advantage by engaging with customers in a way that others can’t or won’t.
- To streamline the delivery of inexpensive goods produced in an industrial way.
- To lower expectations and satisfy customers by giving them exactly what you promised, which is not much.
- To raise expectations and delight customers by giving them way more than they hoped for, which was a lot.
- To dance with customers in an act of co-creation.
- To diminish negative word of mouth.
- To build extraordinary trust.
- To treat different people differently.
- To race with competitors to lower customer service costs just a bit more than they will.
- Because you can.
Every single person who makes budget decisions, staffing decisions and customer service decisions must to be clear about which strategy you picked, needs to be able to state, “we’re doing this because it’s congruent with what we say customer service is for.”
See Seth’s full post here.
“Top-performing companies today are the ones that have moved from perceiving customer experience as a metric, to treating it as a management system, according to one of Bain and Company’s Asia-Pacific customer practice leaders.”
“Speaking at the Customer 360 Symposium, Bain and Company manager, Stan Swinton, said the shift towards customer advocacy often starts with metrics and a specialised business unit within organisations. The problem is, insights and practices aren’t usually disseminated to the wider business. He claimed a number of organisations are still in this camp in Australia and globally.”
“From there, it then progresses to a movement, and that’s where we see more experimentation, wider conversations and multiple metrics across the organisation,” Swinton said.
Top performers today, however, go a step further and treat customer advocacy as a management system, Swinton said.
“This is defined as being business as usual, continuous, about people and process and what we do everyday, and it’s a whole-of-business approach,” he said. “Customer advocacy needs to be a system that touches every part of the business. Most of us are at a program level, but it needs to go through to a competency.”
With reference to Bain and Company and industry research, Swinton said organisations that have embraced customer as a management system and have
- higher Net Promoter Scores (NPS) than their competitors [and]
- have a growth rate two times that of companies with average customer scores.
They also boast of
- more empowered employees,
- maintain simpler products and services offerings,
- have been able to reduce operational costs by up to 15 per cent,
- get a bigger share of customer wallet, and
- have higher customer win rates.
Read the full article by Nadia Cameron at CMO.
“If it’s not a transformation to make the company more customer-focused, you’re making a mistake. Technology and economic forces have changed the world so much that an obsession with winning, serving and retaining customers is the only possible response.” writes Michael Gazala of Forrester Research.
“This customer-driven change is remaking every industry. Cable and satellite operators lost almost 400,000 video subscribers in 2013 and 2014 as customers dropped them for the likes of Netflix. Lending Club, an alternative to commercial banks, has facilitated more than $6 billion in peer-to-peer loans. Now that most B2B buyers would rather buy from a website than a salesperson, we estimate that one million B2B sales jobs will disappear in the coming years.
To thrive in the age of the customer, winning companies will embrace four mutually reinforcing market imperatives in order to become a customer-obsessed company:
- For speed, tap into mobile connections;
- For intelligence, set up systems to gather customer knowledge;
- For impact, build a better customer experience; and
- To become flexible, embrace digital transformation.”
Many companies are developing and deploying mobile apps of all shapes and sizes. They are analysing the large amounts of data their systems already have about their customers and gathering even more. Not all companies are however taking a methodical and thorough approach to improving their customers’ experience.
“Delta Air Lines recognized that improving customer experience – with a focus on eliminating cancelled flights – could make a world of difference in its business. Mobile apps for customers, flight attendants, and pilots streamline the experience for everyone. Making these applications sing required retooling back-end systems and led Delta to acquire staff and technology from travel technology firm Travelport. The result of this focus was a 13-point year-over-year jump in its Customer Experience Index score.”
Does Cadillac compete with Chevrolet, Ford, and Volkswagen? Nicholas Dreystadt, the German-born service mechanic who took over Cadillac in the Great Depression years of the 1930s, answered: “Cadillac competes with diamonds and mink coats. The Cadillac customer does not buy ‘transportation’ but ‘status’.” This answer saved Cadillac, which was about to go under. Within two years or so, it made it into a major growth business despite the depression.
…flying planes or moving people?
Southwest Airlines chooses to ‘move people’
…selling gift cards or providing people with a means of expression?
Hallmark chooses to ‘provides people with a means of expression’
…selling phones or connecting people?
Apple chooses to ‘connect people’
…running theme parks or delivering joy to customers?
Disney chooses to ‘deliver joy’
…making cars or making joy?
BMW chooses to…
Michael Falcon makes a good point when comparing the methodical approach (and budget) companies often take to marketing but then have no structured approach to designing or delivering their customer’s experience. (bolding mine)
“We don’t take the same methodical approach to customer experience as we do to marketing. As a marketing team, we collectively build campaigns, determine what type of digital and traditional programs we will use to deploy them, and allocate the portion of the budget that each will receive.
Customer experience needs the same methodical approach to be successful. However, customer experience doesn’t live within a single department like marketing does. To build a successful end-to-end customer experience program, you must include every single department within the company, from Marketing and PR to Operations and IT. Heck, even Accounts Payable has a role in delivering a seamless customer experience that will help make you an admired brand.”
Michael goes on to highlight the seriousness that Rolls Royce take when building a new car arguing the same methodical hand-crafted approach should be taken when designing or delivering your own customer’s experience.
“Building your customer experience plan is like designing a Rolls Royce. For the assembly of the car, a Rolls Royce is nearly all handmade; everything is tailor-made and personalized, from every single stitch down to the last screw. To build this machine, individuals from different areas of the business must seamlessly work together to bring this vehicle to life. The cost of the product speaks for itself.
Today, companies still believe that customer experience is customer service. They associate customer experience with more training. You can’t improve the customer experience simply by providing more training, although that is an element of it. Rather, it’s a structural design across all platforms and touch points.
Companies such as Ritz-Carlton and Disney have methodically designed their customer experience, just like building a luxury car, and charge a premium for it. Customer experience pays!
If you want to improve your end-to-end customer experience, you must receive the same amount of attention and, dare I say, budget as your PR and marketing functions do. It’s insane to me that companies pay thousands of dollars to hire PR or digital marketing agencies to create awareness of a service or product, when it will likely fail their customers because the experience hasn’t been designed to retain new customers.”
And in the words of a wise man…
…if your company is going to last for the next 100 years, you must get your entire company aligned behind customer experience: design your program and strategically deploy the same experience you would want if you were the end customer of your business.
I’m currently reading The Essential Drucker, a collection of Drucker’s best works on management over six decades. Drucker is quite clear on what he believes the purpose of every business to be, what defines it, is at its core and where to start – from the Outside looking In! (bolding mine)
“The answer to the question, What is our business? Is the first responsibility of top management. With respect to the definition of business purpose and business mission, there is only one such focus, one starting point. It is the customer. The customer defines the business. To satisfy the customer is the mission and purpose of every business. The question, What is our business? Can, therefore, be answered only by looking at the business from the outside, from the point of view of the customer and market.”
Following the Socceroos (National Football team of Australia) Asian Cup win, Brian Schwartz (Deputy Chair of Football Federation Australia) was recently invited to give a talk on Leadership at a The Customer Experience Company breakfast event.
Brian is the Chairman of IAG, deputy chair of Football Federation Australia and The Asian Cup Organising Committee, and also Westfield and Scentre Group. Previously, Brian was CEO of Investec Bank and prior to that CEO of Ernst & Young Australia.
Brian opened his talk with “a bit of theory” from his own experience of what makes good leadership today:
1. A preparedness for change. Brian’s view is that you have to be dissatisfied with the status quo in order to drive change, that you have to be the change yourself, and that you need to find ways to bring others with you on the journey. As Brian quoted – “The world is moving so fast these days that the man who says it can’t be done is generally interrupted by someone doing it” though interestingly that quote came from Elbert Hubbard, over 100 years ago!
2. A long-term mentor. Brian has been fortunate to have enjoyed good mentoring over his career – someone who can respond honestly to your situation, who you trust to ask “what would you do?”. Mentoring needs to be long-term, not just a one-year commitment.
3. Courage to do the difficult things. There are often situations where it can be hard or risky to take a course of action, to stick your head up. But in his career, even when it seems like a failure there have been significant benefits, and this courage keeps you fresh. “As long as you’re green, you’re growing. As soon as you’re ripe, you start to rot.” (Ray Kroc).
4. Good teamwork. Good leaders succeed because of good teams, and the weakest link in a team is usually a problem for the leader and the rest of the team. Brian doesn’t like “I” specialists, and the lesson he’s learned most in his career is to not leave the wrong people in a role – do the hard stuff quickly (he confessed that he is still learning this).
5. Values, consistently communicated. Leadership has changed since Brian started his career – from an autocratic do-as-I-say approach to a collaborative style. This means that values and culture are critical to bringing people with you. “Be the change that you wish to see in the world.” (Mahatma Gandhi)
6. Succession planning. This is critical – and there is no better example than the technical team in the FFA, who impressed Brian with their plans for the team; for each player they had a list of current alternatives, plus a plan for the upcoming generation that can take over, plus insights into the younger generation and how individuals should be developed.
The complete write up on Brian’s talk given at the breakfast event can be found here.
I finally finished reading Walter Isaacson’s, The Innovators, this weekend and it was a thoroughly enjoyable read. In the last Chapter, Ada Forever, Isaacson describes the lessons history has taught us when it comes to innovation.
“First and foremost is that creativity is a collaborative process. Innovation comes from teams more often than from the light bulb moments of lone geniuses. This was true of every era of creative ferment. The Scientific Revolution, the Enlightenment, and the Industrial Revolution all had their institutions for collaborative work and their networks for sharing ideas.”
Ideas are, more often than not, an evolution as opposed to a revolution…
“…it was based on expanding ideas handed down from previous generations. The collaboration was not merely among contemporaries, but also between generations. The best innovators were the ones who understood the trajectory of technological change and took the baton from innovators who preceded them.”
A balanced team is best…
“The most productive teams were those that brought together people with a wide array of specialties. Bell Labs was a classic example. In its long corridors in suburban New Jersey, there were theoretical physicists, experimentalists, material scientists, engineers, a few businessmen, and even some telephone-pole climbers with grease under their fingernails.”
“Even though the Internet provided a tool for virtual and distant collaborations another lesson of digital-age innovation is that, now as in the past, physical proximity is beneficial….Predictions that digital tools would allow workers to telecommute were never fully realized. One of Marissa Mayer’s first acts as CEO of Yahoo! was to discourage the practice of working from home, rightly pointing out that “people are more collaborative and innovative when they’re together.”
The best leadership team combines vision and fosters collaboration…
“Throughout history the best leadership has come from teams that combined people with complementary styles…pairing visionaries, who can generate ideas, with operating managers, who can execute them. Visions without execution are hallucinations. Robert Noyce and Gordon More were both visionaries, which is why it was important that their first hire at Intel was Andy Grove, who knew how to impose crisp management procedures, force people to focus, and get things done. Visionaries who lack such teams around them often go down in history as merely footnotes.
The most successful endeavors in the digital age were those run by leaders who fostered collaboration while also providing a clear vision. Too often these are seen as conflicting traits: a leader is either very inclusive or a passionate visionary. But the best leaders could be both.”
The most successful had one thing in common…
“…they were product people. They cared about and deeply understood, the engineering and design. They were not primarily marketers or salesmen or financial types; when such folks took over companies, it was often to the detriment of sustained innovation. “When the sales guys run the company, the product guys don’t matter so much, and a lot of them just turn off,” Jobs said. Larry Page felt the same: “The best leaders are those with the deepest understanding of the engineering and product design.”
“…innovation will come from people who are able to link beauty to engineering, humanity to technology, and poetry to processors. In other words…creators who can flourish where the arts intersect with the sciences and have a rebellious sense of wonder that opens them up to the beauty of both.”