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Achieving customer centricity calls for an understanding of customer behavior, segmentation, and insights.  It requires an integration of departments, systems, processes, and channels among many other issues.  Consequently, technology becomes a critical component in a company becoming customer centric.  Technology in itself is not customer centricity, but it enables it as well as the effective management of customer experiences.

As indicated above, inherent to customer centricity are diverse components that often require innovative technology.  In this part of the ongoing series, I point out a few of these areas where technology can be used to maximize customer centricity.

  • Designing and delivering excellent and differentiated customer experience: In this case, technologies like customer journey analytics can be adopted to measure how the organization is doing at delivering the customer experience. Example of such technologies include 3D Journey Maps, which offer an in-depth understanding of customer journeys and then identify the most critical points and opportunities to the customer experience and bottom line.  Such technologies capture how customers are feeling and experiencing and using that information to design customer experiences.
  • Voice of the Customer: Mobile and social technologies can also be used to find new ways to interact, engage, and support customers. While most companies can capture different aspects of the customer’s voice, from social media, traditional surveys or other platform – the integration of this data remains a challenge.  There isn’t a holistic view of the customer voice, but there is a need for technology that can do that.  If the truth be told, this is very difficult to achieve.  The best way to work around it is to implement technology that at least captures all customer voices leading to technology that can integrate many different platforms.
  • Data management: Under this umbrella, organizations can use Customer Relationship (CRM) to understand customer segmentation and identification (i.e. focal customers and those who are not) and collect and analyze data.  Gaining in-depth customer insights and information will enable organizations to provide relevant customer experience and the right products and services.  Customer data analytics and future customer forecasting are central to customer centricity.  The right customer CRM technology provides more than mass marketing, promotions, and seasonal sales.  It is about strengthening relationships by understanding customer data.
  • Integration, Agility and Workflow: Integration of different departments, channels, systems, and processes is an important part of customer centricity.  For example, collaboration across customer-facing teams, including access to and the sharing of information and resources becomes imperative.  This can only be attained through the implementation of effective technology.

Just as important is the organizations’ agility and workflow.  This speaks to the organization’s ability to deliver a customer centric experience at a speed that enables an organization to organize itself to meet the ever changing customer needs and act on new opportunities as they arise.   To achieve this, an organization requires an agile decision-making frame supported by technology-enabled processes that integrate teams and deliver on the opportunities for real-time responses.  In addition, customer focused processes should be designed and developed on workflow principles.

  • Systems: Technology and systems work hand-in-hand.   Systems must support the creation of great customer experiences, develop a single view of the customer, and allow for a deep customer understanding. For example, customer-facing systems should be managed effectively and help the organization deliver on the customer promise.  Customer systems address the level to which a product or service can be used by specified users to achieve specified goals with effectiveness and efficiency.  In a customer centric business model this also implies that technology takes into account user experiences such as the users’ emotions, beliefs, perceptions, physical and psychological responses, etc., that occur before, during and after use.

This is a wide step, and, for the purposes of this article, I will keep it short.  The main takeaway is: Technology is an integral part of furthering customer centricity and building the capabilities and structures for effective management.  The challenge that companies have is to ensure they create effective innovations/technologies that help solve customer management complex issues and create value going forward in an ever changing economy.

Join me again in Part 5 as we continue on our journey: A Roadmap to Customer Centricity.

During my years of consulting, I have met three different groups of leaders.  The first group does not appear to put much trust in its team or people.  This group feels the team is inadequate and incompetent.  The perception is that there is no hope in the team and therefore no conscious effort is put in trying to engage or inspire the team. The second group appears to be in denial about its team and its performance.  The leaders in this group believe their team is second to none.  There would be nothing wrong with this stance if it was true and not an exaggeration.  Similar to the first group, the leaders do not invest much in their teams in terms of training and development.  If they do any development and empowering, it is the bare minimum.  Finally, the third group has a balanced and honest view of its team members.  These leaders acknowledge the teams’ strengths, but also understand the team has room to improve.  Leaders in this group recognize that, though their teams are good, they need to invest in training and developing, empower and truly engage them for business success.

The last group of managers appreciates that there is a correlation between the effective management of people and customers.  They believe a well-trained, empowered and engaged team will manage customers effectively, which leads to profitability.  This is true of a customer focused organization.

Most organizations that are not customer centric or customer focused tend not to be people focused.  The result is loss of good employees to competition.  In the last article, we discussed the importance of acquiring the “right customers” for the purposes of customer centricity.  Similarly, this article advocates for organizations to acquire (upfront) the “right people” who are engaged, committed and highly skilled to achieve customer centricity.  Customer centricity transformation cannot happen if people’s behavior perception, attitudes and beliefs are not aligned with customer focus.

Hiring the Right People – HR Becomes a Strategic Role

As previously indicated, it starts with acquiring the “right” staff members.  The role that HR plays in creating a customer centric organization is significant.  Customer centricity requires organizations to acquire talent with key customer focus skills above other skills.  This means HR needs to shift focus from an inward looking to an outward looking company.  The ultimate objective is to align with customer management when hiring and mentoring talent.  This also implies that HR must move beyond creating a culture of simply keeping staff members happy and meeting their expectations.  The customer needs to be treated as a major stakeholder in the workforce strategy, policy and technology, besides the workplace culture.  It’s important for HR professionals to understand the customer brand and align it to the employer brand.  This will connect staff members to the company’s growth story and improve their performance.  In summary: The Chief Human Resources Officer must take a strategic approach to work, and not necessarily an administrative or supportive role only.

Training and Empowering Teams

It then becomes important that all team members are trained and empowered with the right skills and competences.  Training initiatives will include training for job-specific functions, general customer management and other soft skills to enhance team performance and productivity. Training and development initiatives should be on-going for continuous improvement and true customer focus transformation.

The empowerment of key individuals and teams to take on responsibilities such as working across silos and making the necessary adjustments to integrate all departments becomes important.  For example, customer-facing groups who work across departments could be empowered and other departments should work in cooperation. Disney World offers a classic example of this strategy.  Its frontline team members have ownership of the customer experience design, and delivery.

Employee Engagement and Commitment

It is the leadership’s responsible to make sure that the working environment is conducive and keeps staff members engaged, interested and committed.  When team members are highly engaged and committed, employee satisfaction, loyalty and productivity increase; subsequently improving business performance. A commitment to deploying a variety of methods to engage team members becomes essential in a customer centric business model.

Creating a Customer Centric Culture

Furthermore, a customer centric culture needs to be embedded in the organization and all staff.  Subsequently, the entire organization needs to think of the customer as a valuable customer.  This requires focus, investments and understanding.  An organization must define the customer culture and the corporate culture.  Teams must be educated and should be aware of what the culture is and its importance.  I highlight some of the points an organization could facilitate to create a customer culture:

  • Clear beliefs and values
  • Persistent and effective communication via different channels
  • Celebrating and recognizing achievements
  • Commitment to staff members and keeping them engaged

Inclusion of External Partners

In most cases, organizations focus on engaging their internal team members only; however, customer centricity requires something much more.  It calls for an organization to engage external parties such as partners, suppliers and other communities of interest.  For example the procurement and management of suppliers should consist of the same level of attention to values, culture and behavior as afforded to staff members.  Discovery Health in South Africa is a good example of an organization that is inclusive in this regard.

More could be said on this topic.  The most important aspect here is for leadership to understand the role their teams play in creating a customer centric culture.  This culture cannot be achieved without an exceptionally engaged and empowered team.  Leadership needs to create that environment to facilitate the change.

Join me again in the next article as we continue to explore more ways of becoming customer centric.

This is Part 2 of “The Roadmap to Customer Centricity” series that I undertook a few weeks ago. As indicated in my previous article, the objective of the series is to offer tips on how organizations can become customer centric or how they can borrow some of the principles embedded in a customer centric model.

Once leadership has had a customer centricity awakening as specified in Part 1, the next step would be to dissect the definition of “the customer” and express the role that customer plays.   There’s no question that the management of customers as valuable assets through an effective customer management strategy, results in improved business performance.  Nevertheless, there has to be an acknowledgement that customers are different and require different treatment.

Because most organizations are product centric, it’s no surprise that most businesses are built on the premise of acquiring as many customers as possible to improve the bottom line.  This is the motivation, regardless of what type or kind of customers are acquired.

Customer centricity; however, contends differently.  A friend of mine asked me how many friends I have and, of those friends, with how many do I spend most of my time and effort.  I indicated a small number of my friends took my time, energy and resources.  Almost 80 percent of my friends are good friends, but I do not spend as much time (i.e. scarce resources) on them as the other 20 percent.   I take more time with the 20 percent and invest in them as much as I can.

The same principle is true with customer centricity. Unlike product centricity – customer centricity is built on the basis that to be successful, organizations must focus on the “right” customer (i.e. the 20 percent).  The “right” customer implies the “most profitable” customer.  Peter Fader defines customer centricity as “… a strategy that aligns a company’s development and delivery of its products and services with the current and future needs of a “select” set of customers in order to maximize their long-term financial value to the firm.”   The “right” or “select” customers are the significant ones.  They are the most profitable, and with whom organizations need to spend more time thinking about, planning around, producing and working for.  They matter the most and set the tone of the organization’s entire strategy.

I remember explaining the above principle at one of my speaking engagements and some of my audience members were puzzled by this opinion.  They shook their heads in disbelief and hands went up quickly to contest this notion.  It was understandable that they would react with disbelief because there is a paradox in the concept.  Many organizations find the idea of focusing on a “select” few very unsettling and unrealistic.  The question you would ask is, what about the other customers (i.e. the 80 percent)?

The idea is not to ignore the rest of the customers or stop doing business with them.  Because customer centric transformation is expensive and requires significant investment and resources, it will become too exorbitant not to serve the other 80 percent of customers.  Realistically speaking, as you spend more money on understanding and knowing your most profitable customers – you will need the other customers to be profitable as you make the transition.  At least in the short term, many other customers are likely to generate more profit than the right customers.

To be specific; organizations will need those other customers to continue buying the products and services bringing in the cash flow.  They are your low-hanging fruits and easy money, so to speak.  Though they are not the core customers, it doesn’t imply that they should not be provided excellent service.  They should, but with the understanding that you cannot invest your best effort in them.  The idea is for an organization to allocate resources in the most efficient way possible.  Though organizations need the rest of the customers, they must also realize more value is created through the “right” or “select” customers. It then follows that customer centricity argues that customers are not equal and should not be treated equally.

How to achieve customer centricity through the “right” customers

The idea that some customers matter more than others is unusual and most organizations battle with the concept.  For those organizations that would consider treating different customers differently, it also means altering every aspect of the business, including research and development, reworking metrics and the general running of the business.  It also means taking a radical approach in understanding and getting to know the customer.  But that is what customer centricity is all about – it is about radicalizing how business is done to maximum profits in a sustainable way. Below are some of the principles with which a company could start:

  • Understand that value is extracted from customers not products: First, there has to be an understanding and appreciation that true value is extracted from customers; not from products and services.  Extracting customer value requires a dynamic marketing strategy that uses financial and non-financial assessment procedures and customer data to optimize the acquisition, retention and cross-selling opportunities to an organization’s customers.  This maximizes the value to the company throughout the customer’s life cycle
  • Determine what they want: Peter Fader conveys this point very clearly. He says customer centric organizations “…don’t make and sell products they think their customers will want; they make and sell products they know their customers will want.” This would only occur after extensive market research has been conducted to uncover deep customer needs and wants.  So often customer surveys take the form of ticking the box.  Research should both be qualitative and quantitative.  It requires organizations to immerse themselves into the customer’s world.  Furthermore, research should uncover the respondents feelings and the factors that influence their decision making
  • Make the most of segmentation: The insights derived from understanding customer behavior will assist organizations to segment different customers. This will result in treating customers differently and creating specific and differentiated customer experiences according to different customer behavior.
  • Gaining customer Insights: This can be achieved through an effective Customer Relationship Management (CRM) system. There are mixed feelings about CRM, but if organizations used CRM systems for what they were intended to do (which is to gather data and better understand the unique characteristics and expected value), success would be achieved.  This information would enable organizations to allocate resources appropriately.  Data management will permit organizations to identify the focal customers and those who are not.  It will also enable them to accurately estimate customer life time value (CLV) for each customer and by extension calculate overall customer equity.
  • Effective customer acquisition, retention and penetration: This phase is highly influenced by how well an organization is managing its customer data.  If CRM is being used appropriately and providing great customer insights, then customer acquisition, retention and penetration will fall into place.  Acquisition of the right customers from the onset will improve customer retention and development if done right.   

Remember, customer centricity is based on allocating more resources to the managing of the “right” customer for business performance. Without understanding customer insights and failing to separate the “select” customer from the rest of the customers, customer centricity will not be attainable.  It is also important to note that customer insights and customer data will not make an organization customer-centric.  All other business areas and functions are required to work in collaboration and in sync to achieve customer centricity.

Join me in Part 3 of the series as we continue to explore how your organization can be customer centric.

This article builds on my previous article “Stuck in the ‘if it’s working and profitable, why fix it mode”.  In that article, I ventured into the concept of customer centricity by bringing a balanced comparison between product centricity and customer centricity.  The essence of the article was to encourage and motivate organizations to step out of their comfort zone, i.e. product centricity. Though product centricity is and has been profitable for many years it’s no longer adequate in a competitive environment.  Organizations need to push boundaries and take a “go” at customer centricity, which is more profitable and sustainable.  In the same article, I also acknowledged that customer centricity is not for every organization.  However, even those organizations that cannot be customer centric can benefit tremendously by adopting some of the customer centricity principles.  At the end of the day; all organizations are in business to maximize profits in a sustainable way.

This article is Part 1 of a series I have called “The Roadmap to Customer Centricity”. The purpose of the series is offer suggestions and tips on how organizations can get “unstuck” from the “if it’s working and profitable, why fix it mode” and be on their journey to customer centricity.  Organizations that are already on their customer centricity journey can still benefit by taking some of these tips and advance their transformation.

Research shows that the implementation of customer centricity is one of its major hindrances due to the complexity. In some cases it means losing money in the short-term to make a greater profit in the long-term.  The strategies that many organizations have in place are geared towards maximizing shareholder value in the short-term.

Therefore, it becomes clear that for an organization to transition from product centricity to customer centricity there has to be a reframing of the mind and a total paradigm shift. For instance, an organization would need to transition from a short-term focus to a long-term focus.  It will also need to focus on creating value for all stakeholders, and not just shareholders.  The question to ask is “where should this shift and the reframing of the mind start?”  The answer to this question leads me to the introduction of my first tip to creating a customer centric organization: Leadership.

Leadership plays an integral role in the transformation to customer centricity.  Through my research work concluded last year and published into a book (Ritz, 2015), it was established that customer centricity and the effective management of customers in general were not treated as a priority by company leadership.  It was strongly argued that if organizations wanted to see true change in the management of customers, the top leadership needed to be the change agent.   The next section of this article provides some tips on how leadership can be the catalyst of customer centricity transformation.  Leadership holds the keys and sets the stage for a customer centric business model.

Leadership role in customer centricity transformation

Leadership could put more effort to set the right tone for customer centricity transformation.  Below I provide a few tips that I believe are quite significant, but it must be noted the list is not exhaustive.

  1. Determining the organization’s strategic direction and articulating the desired outcome

It’s important that leadership defines the new strategic direction it will take to facilitate the transformation.  This means choosing and aligning projects and initiatives that will advance the new strategic direction resulting in the desired outcome.  To be successful, the desired outcome should be articulated upfront to facilitate measurement.

  1. Leading through change management

It is well known that transformation initiatives are quite complex and result in failure at times.  Leadership must appreciate the importance of managing change effectively in an organization.  Knowledge, control mechanisms and change management plans should be formulated and adhered to.  To begin, the business case and logic behind the transformation to customer centricity should be explained to bring clarity in the organization.  There should be complete understanding of the implications of the new way of doing business. Training and coaching will play a key role to ensure behavioral change takes place.  The main idea is to ensure the entire organization is aligned and committed to the new vision and strategy.  No one should be left behind – it is an organizational effort.

  1. Defining the higher purpose

According to Sandra Van der Merwe; author of Breaking Through: Implementing Disruptive Customer Centricity (2014), organizations should aspire to live beyond meeting their stated financial goals and objectives. Instead, they need to move past this standard norm.  Customer centricity requires leadership to identify and clarify what this higher purpose is.  It’s this overall big picture that would distinguish the organization from the rest through a robust vision and mission.

  1. Shared Values

Customer centricity requires leaders to be responsible and accountable for the organization’s economic well-being.  In addition, they are also responsible for considering the impact the organization has on social and environmental contexts in the community in which they reside and conduct business.   This implies embracing a shared value approach with all stakeholders inside and outside the organization; taking both the long-term and short-term views.

  1. Provide “real” support

The journey to customer centricity requires substantial investment.  Leadership must not consider any resources spent on the transformation as an expense but as an investment. Many leaders miss the mark here because they prefer to focus on the short-term instead of the long-term. Leadership must support customer centricity transformation by committing the necessary resources, whether they be financial or non-financial. This kind of commitment will achieve true transformation as it propels the entire organization to be a part of the change and; therefore, bring the change

Of course the above tips offer just a glimpse of what leadership needs to do to transition to customer centricity.  However, it is my hope that you find these tips useful and that you start asking the necessary questions that lead to true discussions of where you are taking your organization as a leader.  In conclusion, I would like to emphasize that customer centricity or customer management is not the responsibility of the frontline staff, or a departmental issue.  It is a leadership issue and it takes leadership to influence the entire organization by offering unwavering support for customer centricity. Leadership is the necessary catalyst.

Join me in Part 2 of the series, “The Roadmap to Customer Centricity” in my next article.

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