So you want to be customer centric?

So You Want to Be Customer Centric?A Futurelab Action Guide

FUTURELAB

Alain Thys, December 2010

About this presentation

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

Prelude

Most herald the same brilliant companies as examples.

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There are many great books, articles and presentations about customer-centricity


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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

11-28% of customer questions NEVER get answered In the real world

Source: Insites Consulting survey of 500 senior marketers in Belgium, Netherlands, France, Germany and Great Britain

But while best practice and academic models can be inspiring, life often doesn’t reflect the reality they portray.


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Five steps to make your business (more) customer-centric


Based on experience acquired by working with

#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

(...)

Understand it’s a mindshift game

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“By doing more of the same, you won’t get a different result. You need a new perspective.”

Step #1


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?• ...

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SURVEY

When the chips are down, most companies choose shareholder value over customer value any time.


But by doing so, they avoid the elephant in the room

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Reality Check

Sorry my friend, but customer happiness doesn’t buy you much on Wall Street.


Much of the well intended customer rhetoric misses the point

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The customer evangelists say:• We owe it to our customers• Customers pay our salary• We will lose our competitive edge• It’s important

The business hears:• This may cost money• This will upset the status quo• I’m already busy enough• Yes, this will cost money

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.


STEP 1: Change the way customer-centricity is perceived

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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.

Show them the money

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“Saying that happy customers are more profitable isn’t good enough. You must prove it.”

Step #2

Show them the money

Traditional satisfaction metrics aren’t boardroom proof

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Customer satisfaction is no guarantee for loyalty, repurchase or other forms of “new profit”.

• 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)

Show them the money

Newsflash: People pay to be satisfied

Where satisfaction worksSatisfaction measures are very useful to check whether people received what they expected.

Where satisfaction breaks downThere is no hard business case for satisfaction alone.

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When was the last time you voluntarily bought something with the explicit expectation not to be satisfied?

Show them the money

You need a metric that correlates with economic behaviour

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0 1 2 3 4 5 6 7 8 9 10

Extremely unlikely

Extremely likely

NPS™= (Promoters-Detractors)/Total

DETRACTORS PROMOTERSPASSIVES

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

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The more likely customers are to recommend, the more profitable they become

0 1 2 3 4 5 6 7 8 9 10

Investment: the cost of making customers more likely to recommend

Your Business Case

Return: the gains from the altered economic behaviour

Promoters:• buy more & more often• are more loyal• negotiate less• are easier to service• bring their friends• ...

= are more profitable

ROI for decision making

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

Show them the money

STEP 2: Make a business case for customer-centricity

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DO: ESTIMATE THE ROI

Look at actual economic behaviours from different customer types to build a business case

with a measurable ROI.

Make the customer voice actionable

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“All this customer information is interesting, but what does it mean to ME?”

Step #3


Customer voice data & market research are often distant

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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.


Bring the customer’s voice into the business, literally.

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How often do members of your executive team actually meet and talk to real customers?

Don’tShow 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.

DoPlay 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.

NPS TipIf 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.


Create a cross-functional platform for action

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FactCustomer’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.

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.


STEP 3: Bring your customer into your business

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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.

Pick your battles carefully

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“The goal is to make change happen, not to become a customer martyr”

Step #4


This is not a walk in the park

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Many companies have attempted – and failed – at integrated customer programmes.

The ride can be rough.

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


Start with a pilot project

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Gain (private) executive

sponsorship

Test your assumptions

in a pilot

Refine & test

again

Announce to the world

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.


Balance quick wins with structural improvements

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Time

€ Im

pac

tQuick wins

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.


Be patient and pragmatic

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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.

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.


STEP 4: Move with utmost deliberation

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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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Start a movement

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“Customer-centricity cannot be conscripted. You need to light the fire, and get out of the way”

Step #5

Start a movement

Customer centricity: it’s all about the people

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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 actYour primary focus

Those that waitGently encourage

Those that hinderEliminate or ignore

Start a movement

How to start a customer movement

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http://www.youtube.com/watch?v=fW8amMCVAJQ&feature=related

Start a movement

In practical terms: success will generate success

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1. Identify those who already behave in the right way2. Get their support for your bigger objective. 3. Find champions at all levels in the business4. Help them be successful as well5. Highlight these successes to the organisation6. Attract more supporters

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.


STEP 5: Start dancing

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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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Five steps to make your business (more) customer-centric

To Conclude

#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

And if all the above is too ambitious, just step out of your office and meet a customer.

Hi there,

If you have made it this far in the presentation, customer-centricity is probably on your mind. So perhaps we should talk.

Futurelab’s 30+ associates have been involved in over a dozen customer-centricity programmes involving tens of thousands of employees across each continent.

This makes them perfectly placed to assist you in your customer-centricity efforts. Not with complex methodologies and theoretical advice, yet with pragmatic recommendations rooted in experience.

So if you feel you’d like to have an informal chat about the ways we can make your business more successful, please do get in touch.

Alain Thys: Email: [email protected] Twitter: @FLB_alainthys

Stefan Kolle:Email: [email protected]: @FLB_stefankolle

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A world-class team that believed in customer-centricity before the word existed.

A moment of self-promotion