Much has been written about the reasons why the locus of control in relationships between organisations and customers is moving firmly, but not completely, towards the customer. In increasingly global and commoditised markets, where there is increased competition and little difference in price and product specification and quality, the main competitive difference will be in the way companies deal with customers and the experience they deliver. In response to the above, organisations should be, in theory, more customer-focussed or customer centric and our SCHEMA® benchmarking shows that they are– but only just! But how can you tell a customer centric company? Below, we explore what it means to be a customer centric company – what it feels like to be a customer of one and what it looks likes from the inside.
1. What is customer centricity…?
Customer centricity is not necessarily about offering world class ‘mandarin hotel style’ customer service or providing the most luxury products possible. It might be about this, or it might be about offering fantastic value and product availability with an acceptable customer service (e.g. IKEA). It might equally be about being lower priced (e.g. Lidl), more convenient (e.g. Amazon) or more innovative in product design (e.g. Apple). So what does a customer centric company look like?
…from an internal perspective
The table below is a checklist of what it means to be a customer centric versus a sales centric organisation. Note that both columns may imply a profit focus, but companies who relate better to the statements in the left hand column are more customer focussed, and are conscious about balancing short term revenue with a longer term customer value objectives, whereas companies relating better to the right hand column are mostly about winning sales.
|
A customer centric company… |
A sales-centric company… |
|
? Knows what customers it wants to manage (win, keep and develop), |
? Will acquire and sell to any customer. Little retention activity |
|
? Understands its competitive positioning and has defined and communicated its ‘purpose’ and detailed value proposition to customers and colleagues. |
? May have clear competitive differentiation at a strategy level but unlikely to have a value proposition which is well communicated to customers or colleagues |
|
? Listens to its customers and makes a great effort to deliver the appropriate customer experience in the context of their proposition |
? Carries out market research but is more focused on internal processes and selling product than on the customer experience |
|
? Engages with its customers, building trust and maybe relationships over time with at least those customers with the highest actual, potential or strategic (influence) value |
? Is purely transactional in the way it deals with customers, dealing with them on an interaction by interaction basis using low cost channels wherever possible |
|
? Integrates traditional customer management with digital, social and mobile approaches to facilitate an increasingly real time, relevant, timely and contextual dialogue with customers |
? Broad based marketing communications pushed out to customers through traditional media via periodic sales campaigns |
|
? Develops and empowers its employees to deliver what is right |
? Manages employees as a cost and controls their activities, giving them little flexibility to deal with customers |
|
? Understands how costs (of sales, marketing and service activities) impact on sales and engagement |
? Understands how costs (of sales, marketing and service activities) impact on sales |
|
? Facilitates a supportive culture with the right leadership, policies, processes, ways of working, data and IT to make delivering the right customer experience more effective and efficient. |
? Has a culture and measurement system which is designed to reduce costs and increase sales |
|
? Recognises the need for short and long term measures to balance the need for immediate sales and the creation of longer term engagement and value |
? Will analyse ROI on a campaign by campaign basis, looking for short term returns and ignoring initiatives which may develop longer term customer value |
|
? Balances the needs of multiple stakeholders (typically, shareholders, employees, partners, customers, community), building trust in each group. |
? Focuses on satisfying the needs of shareholders, which are typically, but not always, short term in nature |
If you ticked each of the statements in the left hand column then you are a customer centric organisation. Companies must structure themselves to deliver the most appropriate experience within the proposition they have defined and they must do this as cost effectively as they can because price is a key component in almost all markets. Although propositions will vary, what is consistent is what customers say it feels like to be a customer of a customer-centric company?
…from a customer’s perspective
Over the years, we have studied £mms of research from customers of large organisations. Research across markets, across business to business or business to consumer organisations, is reassuringly consistent in its core findings about how customers describe companies they prefer to buy from.
“The company provides me with the products or services I want, when I want them, in full, on spec and at a price that I think represents good value. They get it right nearly every time. If I have a question, I can find the answer and talk to someone whenever I need to. If I have a problem, they sort it out for me quickly with little fuss. They seem to care about me – I feel connected with them. Occasionally they really surprise me – in a good way!”
What all customers of customer centric companies say is..
“I like dealing with them, will buy again and I’ll speak highly of them.”
Just to repeat, these statements are core to most markets and will hold across sectors, whether you are customer flying on Easyjet or Singapore Airlines, buying from Lidl’s or Waitrose or whether you are a business buying office products or earth moving machinery. Whatever sector you are in, you’ll have some additional specific and important statements about what customers want. For instance, “Association with the brand makes me look and feel special”; “they know who I am”; “they tailor their solutions to help me achieve my objectives”; “they make me look smarter” and so on.
A customer of a customer-centric company will buy again from them, and maybe recommend them, because they are engaged with the brand.
I really liked your article, but wonder what your thoughts are when things are not black and white. Sometimes specific pressures and issues may cause you to act more sales centric for a specific case than customer centric (and vice versa).
You may find that you strive to put checkmarks in all the customer centric columns, but, when push comes to shove, you divert to sales centric actions.
I think occasionally this is okay, because business is never black and white, but you need to push yourself to over-correct toward customer centricity to really change the core of your business approach.
This can be hard, due to short term pressures, but, as you point out, it will generally be better for the long term (if you are in a position to wait that long).
Hank
@HBonCX