Customer centric company seems to be the buzz word these days. And I am sure your organization wants to begin its transition towards being customer centric.
But first let’s understand what kind of an organization you belong to?
Most organizations are sales focused. Their focus is on how to increase the numbers on a monthly, yearly basis. All their operations, hiring and other functions are based on their sales projections. This also looks like a most sensible way of building an organization, right?
But it comes with its share of disadvantages. The disadvantages vary with the market characteristics that present at each stage of the company.
For example, if the company is in the build stage, there are 2 challenges:
- There is a lot of unpredictability around what the numbers are going to be for the next quarter or year. Since there is no historical data available all the predictions would be based on common growth models like a hockey stick model etc; While this is a good practice, there is a lot of unpredictability surrounding the numbers. Hence around the hiring, inventory etc;
- A lot of time and energy goes into developing sales people and capabilities. There is also a high chance that the companies at this stage are not able to find the right message that would stick with their target crowd.
To read more about the challenges presented, read this HBR article.
To conclude, sales is important but if sales is the only parameter of success then the team may end up hard selling to every customer without seeing if the product is really a fit or not.
Product focused organization:
A product centric company focuses on developing newer and more advanced products irrespective of the demand that is existent in the market. The demand is non-existent. The utility & the quality of the introduced product creates a new customer segment. The best example of such a product is perhaps iPad. Apple, Google, and Tesla are great product centric companies.
One of the major criticisms of a product focused approach is that it blinds the company to what are the new developments, opportunities & requirements from the customers’ perspective. As a result, the company might lose relevance with its customers. This in turn might lead to loss of market share and sometimes even extinction of the company. The examples are aplenty. One of the famous ones is Xerox Corporation. Xerox pioneered the dry printing and copying technology, especially in the offices market. However it turned a blind eye towards the growing need of printers in the home market. Canon took away that entire pie that could have easily been Xerox’s if it wouldn’t have been so product focussed that it lost sight of it’s customers needs. The cases of Nokia & Kodak are other such examples.
Process/Systems focused organization:
It is advisable to be focused on process and systems. Protocols and rules help ensure there is minimal havoc and clarity of action for the team. You MUST make sure to evaluate the rules regularly to ensure they are updated and probably in line with the current requirements.
This is recommended and every startup treads this path once they are in the growth stages. However, the major concern is about how do they cater to customer’s requests which are mostly unexpected and ad hoc. Even though an organization is process/ system focused it shouldn’t hinder it from being dynamic about addressing the customer’s concern.
Operations focused organization:
An operations focused organization is all about minimizing the errors, improving efficiency and thus decreasing the cost. This is a great thing to be, most manufacturing companies aim to be operationally efficient. The very famous examples are Ford and Toyota.
But an example can give a sneak peak into the disadvantages with such an organization. Ford’s standardization can be summed up with one famous quote from Henry Ford, “A customer can have a car painted any color he wants as long as it’s black”. Though Ford held market dominance for a while, General Motors (GM) took the market by storm when they introduced new variants and colors in their car models. Operations focused organization poses such disadvantage.
Since each of the types of organizations have its share of disadvantages then what is the type of organization we should be building or aim to be. The answer is: Customer Focused.
And I am going to give you 2 reasons why it is so:
- 80% of buyers are willing to pay more for a better customer experience (Capgemini study)
- By 2020, customer experience will overtake process and product as key brand differentiator
Let’s begin with understanding what is a customer centric organization. A customer centric company focuses on identifying a key customer segment, their needs and desires. They then continuously develop products and services to fulfil those needs and desires. Such an organisation would typically expand by increasing the wallet share within its customer segment and by entering into newer markets to target similar customers there. One of the best customer centric companies is Amazon. They identified a customer segment of 20 somethings who are continuously connected to the internet. Then Amazon started off by selling them books online and went on to develop products like Kindle, Fire etc. Then they started bringing more products similar buyer persona could buy from Amazon. Similarly Nike, Zappos, TD Bank, Southwest Airlines are few more examples of great customer centric companies.
To build a customer-centric organization, here are the steps you need to follow:
Understand what it means to be customer focused:
“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better” ~ Jeff Bezos
Building a customer-focused organization is a culture-shift. Every decision should be made by keeping the customer’s perspective in mind. It requires you to be on top of your customers evolving needs….ALWAYS.
Bezos’ empty chair story is a very famous story among all those who have read about Amazon. During the earlier board meetings, Bezos would leave a chair empty in the room, asking the executives to assume that it belonged to the most critical and crucial member of the company – the customer. He’d then encourage his employees to take all their decisions bearing the customer in mind.
Employees should share a unified vision of delivering a great experience:
Your employees represent your organization. They can make or break your vision. Imbibe the thought of customer centricity throughout the organization, and that’s how a change is initiated; by making the members aware, and convincing them to adopt and implement.
Imagine this scenario, you initiate, you adopt, you implement. They follow they adopt, they implement. You are happy and so are they. And SO will the customers be.
Have systems and process in place to make CX the DNA of your organization:
The policies and strategies you make should revolve around your customers and it should become the main focus of your organization. This way, a system gets established that can potentially give you great ROI, you deserve it!
Look at CX as your strategy for growth:
Take the example of Tony Hsieh. He posted the numbers on the website where the customers could speak directly to humans instead of making them navigate a complex IVR.
There are stories of the Zappos team speaking to customers at length just because at times you want to speak with someone. This may not be practical for every company. The greater lesson is that if Zappos would have focused on only being efficient, it would have made the customers navigate through a complex IVR. Instead, they made it easy for customers to call. This may have led to higher costs of call center operations but it meant happy customers. If the customer wants his problem to be solved in 15hours he would have called after 15 hours.
In 2009, Amazon brought Zappos for a whopping $1.2 billion.
Your customer’s expectations, needs, and desires are evolving. To be truly customer you need to evolve along with them.
The customer centric approach has its share of disadvantages too. One of the major ones’ is that the customer is only going to stay with you as long as you keep your commitments to your customers, and do it better than your competitors. Customer centricity should be in the DNA of the organisation and should be spearheaded by the CEO to be sustainable. If the company has to continue to provide such a service then the costs increase exponentially. But by doing it right and making it the company culture, the customer loyalty will always make it worth every penny!