So you want to be customer centric?

FUTURELAB
A Futurelab Action Guide
So You Want to Be Customer Centric?
Alain Thys, December 2010

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Prelude
About this presentation
“Customer centricity is a journey. This presentation offers you some guidelines for the first few steps.”

There are many great books, articles and presentations about customer-centricity
Most herald the same brilliant companies as examples.
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But while best practice and academic models can be inspiring, life often doesn’t reflect the reality they portray.
What do you do if you live in the real world ?
In most large organisations:
CEO’s don’t wear turtlenecks or fly balloons.
Silos, habits and politics get in the way
Thousands and thousands of people need convincing
In the real world
11-28% of customer questions NEVER get answered
Source: Insites Consulting survey of 500 senior marketers in Belgium, Netherlands, France, Germany and Great Britain
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Five steps to make your business (more) customer-centric
#1 Understand it’s a mindshift game
#2 Show them the money
#3 Make the customer voice actionable
#4 Pick your battles carefully
#5 Build a movement
Based on experience acquired by working with
(...)
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Step #1
Understand it’s a mindshift game
“By doing more of the same, you won’t get a different result. You need a new perspective.”

While useful, too much customer thinking starts with the tactics
What is the best metric to use?
Which CRM software best meets our need?
How do we improve first call resolution time?
Which customer methodology is most suitable?
What social media tools should we use?
Which questions should we ask our customers?
How can we benchmark ourselves?
...
SURVEY
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But by doing so, they avoid the elephant in the room
Reality Check
When the chips are down, most companies choose shareholder value over customer value any time.
Sorry my friend, but customer happiness doesn’t buy you much on Wall Street.
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Much of the well intended customer rhetoric misses the point
The business hears:
This may cost money
This will upset the status quo
I’m already busy enough
Yes, this will cost money
The customer evangelists say:
We owe it to our customers
Customers pay our salary
We will lose our competitive edge
It’s important
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STEP 1: Change the way customer-centricity is perceived
DON’T: TALK ABOUT HUGS & CUDDLES
Don’t talk about customer-centricity in terms of morality or long term gains. People will nod, but not be moved to action.
DO: TAKE THE FINANCIAL PERSPECTIVE
If your company only really cares about the money, talk about the profits that can be made can from being customer-centric.
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Step #2
Show them the money
“Saying that happy customers are more profitable isn’t good enough. You must prove it.”

Show them the money
Traditional satisfaction metrics aren’t boardroom proof
In spite of standing ovations, churn rates among concert goers of 55% are not uncommon (OW, 2008)
Upto 80% of customers that left a given ISP declared they were satisfied in the 12 months before they left (Mercer, 2004)
60-80% of “lost” US banking customer described themselves as satisfied in surveys just prior to departing (Brandchannel, 2010)
There is no relevant correlation between satisfaction and market share (AT&T/Gale Consulting, 1997)
Customer satisfaction is no guarantee for loyalty, repurchase or other forms of “new profit”.
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Show them the money
Newsflash: People pay to be satisfied
Where satisfaction works
Satisfaction measures are very useful to check whether people received what they expected.
Where satisfaction breaks down
There is no hard business case for satisfaction alone.
When was the last time you voluntarily bought something with the explicit expectation not to be satisfied?
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Show them the money
You need a metric that correlates with economic behaviour
Extremely unlikely
Extremely likely
DETRACTORS
PROMOTERS
PASSIVES
NPS™= (Promoters-Detractors)/Total
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Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.

Show them the money
And express this in terms your business can appreciate
The more likely customers are to recommend, the more profitable they become
Promoters:
buy more & more often
are more loyal
negotiate less
are easier to service
bring their friends
...
= are more profitable
Your Business Case
Investment: the cost of making customers more likely to recommend
ROI for decision making
Return: the gains from the altered economic behaviour
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Show them the money
STEP 2: Make a business case for customer-centricity
DON’T: GET LOST IN SATISFACTION LAND
Customer satisfaction is a useful measure, yet does not meaningfully contribute to the financial impact of customer centricity
DO: ESTIMATE THE ROI
Look at actual economic behaviours from different customer types to build a business case with a measurable ROI.
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Step #3
Make the customer voice actionable
“All this customer information is interesting, but what does it mean to ME?”

Customer voice data & market research are often distant
While containing extremely valuable data, traditional customer survey and voice-of-customer programmes are often too complex or abstract to inspire executive action. Even those that wish to act often need to wonder what all this interesting data actually means to them.
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Bring the customer’s voice into the business, literally.
Don’t
Show a graph saying that 9% of your customers are highly dissatisfied.
Provide abstract graphs on aspects customers like or dislike about your service.
Summarize verbatims into generalised statements.
Do
Play a video of 27 customers saying how your business “sucks” (and why).
Bring a dozen customers into the business and have an executive conversation.
Have your teams go through every individual verbatim.
How often do members of your executive team actually meet and talk to real customers?
NPS Tip
If you ask people about their likelihood to recommend, simply asking them one or two more questions on their reasons and the opportunities they see for you to improve, can give you a wealth of information.
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Create a cross-functional platform for action
Fact
Customer’s don’t care about the way you are organised. Acting on their voice may break through every silo you have built and challenge every orthodoxy or KPI your business believes in.
Set up cross functional meetings and action mechanisms at every level of the organisation, to directly listen to the customer’s voice and establish multi-department action plans.
Establish an alert system that ensures you keep going until every touchpoint gets it right.
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STEP 3: Bring your customer into your business
DON’T: RELY ON ABSTRACT OBSERVATIONS
Executive teams have become too distant from their customers. This is only worsened by abstract research and VOC programmes.
DO: REALLY LISTEN AND ACT
Bring the customer’s voice really into the business and listen to it across silos. Then act on what you hear.
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Step #4
Pick your battles carefully
“The goal is to make change happen, not to become a customer martyr”

This is not a walk in the park
Some of the hurdles you will encounter:
Disbelief in the customer value numbers
Extensive debate about the validity of your data
Silo-based myopia
Structural/political opposition
Data being interpreted wrongly
Project hijacking
“It’ll pass” behaviour
Outright cynicism
Many companies have attempted – and failed – at integrated customer programmes.
The ride can be rough.
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Start with a pilot project
No two customer centricity projects are ever the same. This means you are bound to make mistakes.
Don’t start running before you can walk.
Gain (private) executive sponsorship
Test your assumptions in a pilot
Refine & test again
Announce to the world
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Balance quick wins with structural improvements
Understanding the future buying behaviour of your customers allows you to devise sales strategies which generate short and long term wins.
Even if you get people to commit to a long-term customer strategy, there will be a point where some get impatient and want to see results.
Make sure they get them by securing a few quick wins.
Structural improvements
€ Impact
Quick wins
Time
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Be patient and pragmatic
You will not be able to make your company customer-centric overnight. In fact, the process may take years.
So don’t be too quick to judge the organisation against absolute standards, yet consider the progress that is being made.
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STEP 4: Move with utmost deliberation
DON’T: BLINDLY CHARGE AHEAD
Your business will not benefit if you become a customer martyr. Don’t announce big programmes or changes before you’re ready.
DO: ACT WITH RESTRAINT
Build your customer case in a way it becomes impossible to ignore or discredit. Manage expectations along the way.
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13/01/2011
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Step #5
Start a movement
“Customer-centricity cannot be conscripted. You need to light the fire, and get out of the way”

Start a movement
Customer centricity: it’s all about the people
DO YOUR PEOPLE WANT TO BE CUSTOMER CENTRIC?
Willing: Do they want to behave in a customer-centric manner
Skilled: Do they have the knowledge and practice to do what is right
Able: Can they do the right thing, or does the business get in their way
You will face three types of people in your business:
Those that hinder
Eliminate or ignore
Those that act
Your primary focus
Those that wait
Gently encourage
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Start a movement
How to start a customer movement
http://www.youtube.com/watch?v=fW8amMCVAJQ&feature=related
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Start a movement
In practical terms: success will generate success
Identify those who already behave in the right way
Get their support for your bigger objective.
Find champions at all levels in the business
Help them be successful as well
Highlight these successes to the organisation
Attract more supporters
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STEP 5: Start dancing
DON’T: FIGHT FUTILE BATTLES
Not even the CEO can change an organisation alone. Don’t waste your energy and resources on trying to move things that are too strong.
DO: BE A REAL LEADER
Set the example that you encourage others to follow. Help them in their efforts and use their success to build a movement.
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To Conclude
Five steps to make your business (more) customer-centric
#1 Understand it’s a mindshift game
#2 Show them the money
#3 Make the customer voice actionable
#4 Pick your battles carefully
#5 Build a movement
For more information or advice on customer-centricity visit us on www.futurelab.net
or get in touch via email on: info@futurelab.net or Twitter: @Futurelab
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So you want to be customer centric?

by Alain Thys on Jan 13, 2011

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So you want to be customer centric? — Presentation Transcript