Customer Centricity

Customer-Centricity

"There are ducks, and there are eagles. The ducks run around the ground quacking all the time, stating rules, following orders, doing what they are told and often pecking at other ducks. Eagles soar high above to get the best perspective and decide what is best for the customer." - Ken Blanchard (Leading at a Higher Level)

“A companys primary responsibility is to serve its customers . . . Profit is not the primary goal, but rather an essential condition for the companys continued existence.” - Peter Drucker

“The alignment of systems, processes and people to deliver products and services to internal and external customer in the most agile way.” - Charteris

What is Customer-Centricity?“Customer-centricity involves aligning organizational resources for effectively responding to the ever-changing needs of customers, while building mutually profitable relationships.” - Craig Bailey & Kurt Jensen

Aligning Organizational Resources  Personnel  Operating practices and procedures  Systems (internal and external)  Products and services

Aligning Personnel• Recognizing and rewarding customer-centric behaviour.• Training every staff on customer- centricity.• Ensuring that decision-making hinges on customers.• Using communication tools and techniques for highlighting the firm’s progress in customer-centricity

Entrenching Customer-Centricity via Training cum Internalization Customer-centricity can be embedded on organizational processes through adequate training and modeling of interdepartmental transactions as depiction of customer relationships that require optimization.

Focus of Training• Communicating effectively and building rapport.• Identifying and exploiting opportunities.• Managing complex and taxing conversations.• People and communication styles

Requirements for Building Mutually Profitable Relationships  Ascertainment of customer’s request  Ensuring Profitability  Find out repeatability of transaction  Determination of feasible term of relationship.

Voice of The Customer Process • Obtain customer’s pulse • Involve the customer • Analyze information • Socialize results • Implement customer-focused changes • Respond to the Customer

How to Obtain Customer’s Pulse  Survey the Customer  Interview the Customer  Get information from customer- facing personnel  Observe actions and behaviours of customers  Embark on mystery shopping

Three Different Faces of a Customer • Business decision-maker • End-user of product or service • Procurement function

Customer SurveyTransactional Surveys Relationship Surveys Focuses on measuring Focuses on all aspects customer satisfaction with of the firm such as individual or collection of • Marketing Interaction with firm. • Product Management • Service and Support • Sales/Account Management • Engineering/Development • Professional Services • Training and Education • Accounting/Finance Survey on many individuals in customer’s firm.

Factors that Aid Collection of Inputs from Customer-Facing Personnel • Environment of trust • Establishing expectations with personnel • Managing anecdotes

Involving CustomersThis can be done by means of the following:1. Focus Group: For obtaining information through discussion with a group of participants, taking cognizance of commonality in demographics, attitudes or purchase patterns.2. Customer Board of Advisors: For holding periodic meetings with selected number of senior executives from firm’s customer database. Factors that determine selection of customers include strategic importance, level of complexity/sophistication in use of products or service, diversity of industries which the firm represents.

Analyzing informationAnalyze customer Compare to otherfeedback and information information held by theobtained firmOutput: Such information include thei. Positive trends following:ii. Challenging trends i. Customer demographicsiii. Issues raised by customers ii. Transactional history This gives rise to development of customer segmentation strategy

Socialize ResultTop-level reporting Comprehensive for general report for awareness sectional, departmental and project action-planning

Steps for Implementing Customer-Focused Changes • Getting management commitment • Conducting cross-functional reviews • Voice of customer tracking and reviews • Forecasting

Key Performance Indicators Targeted for Improvement • Customer Satisfaction • Customer Retention • Churn • Revenue and Profitability -Overall -By Customer Segment -By Customer • Product/Service Diversity By Customer

Responding to Customers 1. Immediate Response i. Establishment of criteria for ‘immediacy’. ii. Implementing ‘immediacy’ team. iii. Management reporting. 2. Responding with Account Strategies The six steps for implementing Account Strategies: i. Record account-specific results ii. Involve senior management in customer experience. iii. Prepare for customer review meeting iv. Engage customer in meeting v. Inform the organization and respond resourcefully. vi. Continue the process

Other Methods of Updating Customers  Newsletter  E-mail  Website  E-zine  Instituting the update as a component of firm’s account management practices  Using interactive sessions of forum or board of advisors.  Responding immediately to participants during survey.

Common Pitfalls of CRM  Accepted as a technical instead of business problem  Using a top-down approach  Non-involvement of senior management  Lack of focus on areas of high adoption  Driven by IT department instead of Sales, Marketing and Service.  Biting more than one can chew  Organizational unpreparedness

From Product-Focused to Customer Centric Firm Feature Product-Focused Customer-CentricCustomer Orientation  Discrete transaction at a point in time  Customer life-cycle orientation  Event-oriented marketing  Work with customer to solve both immediate and  Narrow Focus long term issues Build customer understanding at each interactionSolution Mindset  Narrow distribution of customer value  Broad definition of customer value proposition proposition  Bundles that combines products, services and  Off-the-shelf products knowledge  Top-down design  Bottom-up, designed on the front linesAdvice Orientation  Perceived as outsider selling in  Working as an insider  Push product  Solutions focus  Transactional relationship  Advisory relationship  Individual to individual  Team-based sellingCustomer Interface  Centrally driven  Innovation and authority at the front line with  Limited decision-making power in field customer  Incentives based on product economics and Incentives based on customer economics and individual performance team performanceBusiness Processes  “One size fits all” processes  Tailored business streams  Customization adds complexity  Balance between customization and complexity Complexity isolated within the systemOrganizational Linkages  Rigid organizational boundaries  Cross-organizational teaming& Metrics  Organizational silos control resources  Joint credit  Limited trust across organizational High degree of organizational trust boundaries Source: Booz Allen Hamilton

Solutions Advance Customer Value Proposition Traditional Value-Added Customer-Centric Industry Traditional = Value + Services = Value Proposition Product PropositionTruck  Trucks “We sell and service  Financing “We can help you reduceManufacturing trucks”  Service life-cycle transportation costs”Aerospace  Aerospace “We sell high-  Application/Design “We can reduce yourComponents Fasteners performance fasteners” support operational costs”Utilities Electricity “We provide electricity  Energy asset “We can help you reduce reliability” maintenance total energy costs”Chemicals  Lubricants “We sell a wide range of  Usage and “We can increase your lubricants” application design machine performance and  Lubricant analysis up-time”Pharmaceuticals  Drugs “We sell pharmaceuticals”  Product support “We can help you better  Outcomes-driven manage your patient base” information database Source: Booz Allen Hamilton

Developing Customer-Centric Culture  Put employees in the customers’ shoes  Put employees in the shoes of a particular colleague  Review your habits and attitude  Be evaluated in a 360-degree approach by colleagues you frequently deal with (through a random selection.

“Being a customer centric company can’t feel contrived; it has to feel normal. It requires a concerted effort by the entire company: All of its activities and all of its results must be focused on the customers’ explicit and implicit goals.” - Jonathan Narducci

“In today’s commercial environment, the customer relationship cannot be commodified. Companies must continuously renew their commitment—and strengthen their capabilities—for knowing and reaching the customer, and delivering an experience tailored to the needs, values and preference of target segments. Engaging purposefully with the multi-polar world by mastering these core principles of customer centricity— know, reach and deliver—should be a key element of a consumer enterprise’s current response to the downturn, and a key element in part positioning the business for long-term benefit.” - Accenture, Customer-Centricity Principles for Acquiring Customers in Today’s Multi-polar World

Customer-Centricity as a culture must integrate both cognizance and ratification of internal and external customers in order to synchronize workable behavioural acceptation in every facet of a firm’s interaction sphere.

“Customer - centricity needs to come from the inside out………….Leadership must avoid a double standard that makes it OK for managers to argue with or demean staff while still being courteous and considerate to external customers.” - Elaine Berke

What is Customer Advocacy? It’s a cross-functional role empowered to marshal organizational resources to resolve troublesome customer issues and identify root cause while balancing the financial realities and strategic goals of the company.

The Need for Customer Advocacy Function To steer customers away from veiled gaps, inefficiencies and organizational complexities that perturb perception, thereby managing “customer experience” effectively.

Key Skills for Customer Advocates  Straight-forward and honest  Interpersonal management and communication  Good business sense and judgment  Organizational navigation  Executive Presence  Time management  Project management

Customer Advocacy Process Framework  Customer segmentation  Engagement process  Escalation process  Response planning, analysis and execution  Managing customer experience through resolution  Internal management review

Factors to Consider When Crafting Message  Ensure your communication stands alone  Consider the audience  Read it “as if” you were the recipient  Acknowledge the “bigger picture”  Special handling procedures when emotionally charged

Do’s of Customer Centricity Don’ts of Customer Centricity1. Adjust your mission and vision statement Expect a brand new mission statement to make you a customer-centric company2. Segment your customer base Overcomplicate the segmentation3. Align your organization structure with the Reorganize too often and for the sake of itsegmented customer view4. Make good use of technology Expect technology to build customer relationships for you5. Create new performance measures Throw out the old performance measures6. Study the behaviours, attitudes and Confuse behaviours and attitudes with needsdemographics of your customers7. Try to understand the true value of your Rely on the customers past buying patternscustomers8. Empower employees, particularly customer- Allow anyone in the company to say (or think)facing staff for proactive relationship-building “this is not my job/responsibility”9. Set clear goals for achieving a defined state Assume that your project/ programme wereof customer centricity by a certain point in time completed, you ‘got there’10. Encourage and seek to create customer Think of loyalty as the tenure of a customerloyalty (duration of the relationship)11. Communicate and engage all stakeholders Limit your change management efforts to thein the process marketing, sales and customer service functions

The Seven Characteristics of Customer-Centric Companiesi. They conceive of themselves not as a group of products, services, territories, or functions, but as a portfolio of customers.ii. They know how much money they make or lose with each of their customers or customer segments, and they understand why.iii. They understand the different needs of different customers and group them into operational customer segments and sub-segments based on common needs. They thrill their customers by delivering knockout value propositions that competitors cannot match.iv. They continually innovate by evolving their customer segments and sub- segments, and improve their value propositions as customer needs change.v. They organize their businesses into customer segment business units to establish clear ownership of the customer experience and accountability for the financial performance of each customer business unit.vi. They create a competitively unassailable customer innovation advantage based on a customer R&D model grounded in continual experimentation at key customer touch points.vii. They understand in precise analytic terms exactly how their different customer relationships contribute to or subtract from the total value of the firm; because they manage their customer portfolio on this basis, they know what to manage and where to invest in order to create sustainable, profitable growth and drive outstanding share price performance over time. Source: Wharton Business School

“Managers like profits just as much as shareholders do, because the more profits the firm makes, the more money is available to pay managers. In other words, the need for a healthy share price is a natural constraint on any other objective you set. Making it the prime objective, however, creates the temptation to trade long-term gains in operations-driven value away for temporary gains in expectations-driven value. To get CEOs to focus on the first, we need to reinvent the purpose of the firm. This is what customer-centric capitalism is all about.” - Irving Wladawsky-Berger

Dr Elijah Ezendu is award-winning business expert and certified management consultantwith expertise in HR, OD, Competitive Intelligence, Strategy, Restructuring, BusinessDevelopment, Sales & Marketing, Business Turnaround & Interim Management, Leadership,ADR, Project & Programmes Management, Cost Management, Outsourcing, Franchising,Internal Control, Intellectual Capital, Online Business, Social Media, Software Architecture,Cloud Computing, eLearning, Business & Tech Integration, Social Impact Analysis, andInternational Business. He holds proprietary rights of schematic methods in HR, Strategy,Competitive Intelligence, Business Model, Business Development, Negotiation, CSR, SocialHR, and Social Media. He is currently Chief Executive Officer, Rubiini, UAE. He functioned asSenior Partner, Shevach Consulting, Nigeria; Lead Assessor and Member of GoverningCouncil, Institute of Management Consultants, Nigeria; Lead Resource, Center forCompetitive Intelligence Development; Lead Consultant, JK Michaels; Technical Director,Gestalt; Chief Operating Officer, Rohan Group; Director, Fortuna, Gambia; Director ofProgrammes, Institute of Business Development, Nigeria; Member of TDD Committee,International Association of Software Architects, USA; Member of Strategic Planning andImplementation Committee, Chartered Institute of Personnel Management of Nigeria;Adjunct Faculty, Regent Business School, South Africa; Adjunct Faculty, Ladoke AkintolaUniversity of Technology, Nigeria. He holds Doctoral Degree in Management, Master ofBusiness Administration and stands as Fellow of several professional institutes in NorthAmerica, UK & Nigeria. He is an author and world-class speaker who has featured in manyworkshops & conferences. His ancillary services included council member of professionalinstitutes, editor-in-chief of journals, and Board Member of some Foundations. He serves asAdjunct Faculty of Business Schools in addition to Director of Firms.

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Customer Centricity

by Elijah Ezendu

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