Roadmap to a Customer-Centric Strategy
Jan 24, 2019
Part of the appeal of customer-centricity is that it takes very little business acumen to grasp its core concept. Focus intensely on customers, align your products or services with their interests, and voila: a customer-centric culture is born. Simple, right? Not quite. Becoming a truly customer-centric organization is perhaps one of the most difficult transitions an organization can make, fraught with hidden obstacles and unanticipated challenges. Here are three potential roadblocks on the path to a customer-centric strategy, and how to get around them.
Failing to understand your most valuable customer
A customer-centric strategy is only as good as its customers. “You can’t let the average customer dictate what you do,” says Robert Duboff, CEO of Hawk Partners LLC and coauthor of the book Market Research Matters. Generally speaking, Duboff says, 20 percent of a company’s customer base generates 80 percent of its profits. Given that split, it’s imperative to put your most valuable customers at the heart of your approach.
Identifying those customers need not take exhaustive research and complicated measures. It can be a fairly straightforward process, as it is with the Net Promoter Score, or NPS, a metric developed by Bain & Co.’s Fred Reichheld. As set forth in The Ultimate Question—written by Reichheld and published by Harvard Business Press—the NPS approach consists of one simple question: On a scale of one to 10, would you recommend us to your friends?
Based on the answer to that question, customers are segmented into three categories: promoters, who actively champion a particular product to their friends and colleagues; passives, who are lukewarm about the product; and detractors, the opposite of promoters. A given company’s “score” is simply the difference between its number of promoters and its number of detractors.
NPS has proven to be a powerful tool for such companies as General Electric Capital Solutions, which has used it not only to identify customers that are already valuable promoters but to gain insights into how it can convert detractors. “For a business like GE Capital Solutions, which serves more than 1 million very diverse customers in many different industries, NPS helps us better understand what our customers are feeling and how we can improve their experience with us,” says Stephen White, a spokesperson for GE Capital.
Failing to support your external customer-centric strategy with an internal customer-centric strategy
Speaking of valuable customers, what about that most priceless customer of all—your employee?
While most companies aren’t in the habit of regarding their employees as customers, those seeking to instill a customer-centric culture should rethink their stance, argues Elaine Berke, president of Westport, MA–based EBI Consulting, which specializes in helping organizations develop customer-centric strategies. “Customer-centricity needs to come from the inside out,” says Berke. “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.”
Consider the case of the world-renowned Johns Hopkins University Hospital. In developing a comprehensive Service Excellence initiative aimed at boosting its level of patient care, the hospital included employee satisfaction as a core component of the program. The hospital conducted an extensive survey to gauge employee concerns that turned up such simple, actionable insights as making it a point to compliment co-workers and instituting criticism-free “no negativity days.”
“Customer-centric organizations value and respect internal customers as much as external customers,” says Berke. Like the old saying goes, “If you’re not serving a customer, you’re serving someone who is.”
Failure to identify the “moment of truth”
Companies spend considerable time and resources developing metrics for processes, execution and other day-to-day functions but often overlook defining their “moments of truth”—those points at which a customer interacts with a company’s product or service and forms an impression. “Companies are usually very good at creating metrics around [such procedures as] production deliverables but have a much harder time knowing how to create and measure standards relating to the quality of service being delivered,” Keith Bailey of Sterling Consulting Group says.
In defining a company’s moments of truth, Bailey suggests looking at three different angles—quality of product, quality of procedures and quality of relationships. Taking a hotel as an example, the quality of the product would be the cleanliness and comfort of the rooms. The quality of procedures would be such factors as how it long it takes to check in or how long customers wait for room service. The quality of relationship would be the friendliness and helpfulness of the staff.
Considering each angle separately allows a company to isolate the negative moments of truth within each and develop a game plan for turning them into positive experiences. Procter & Gamble, for example, identified its moment of truth as that instant when a shopper picks up one of its products and decides whether or not to purchase it—a decision the customer makes in an average of six seconds. The company has overhauled its marketing with that insight in mind, creating a global “First Moment of Truth” business team designed to win over the customer in that moment.
There are as many different customer-centric approaches as there are customers, and each has its own unique challenges, but the road to a truly customer-centric strategy always begins with the same steps.