How to Measure Customer Centricity the Right Way

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As a customer first strategist (hopefully just like you), I spend a lot of my time searching how to better measure customer centricity for my clients. I also do a lot of analyses on what customers really want today. I’m always trying to understand exactly the solutions customers need, desire and dream of having.

My regular searches include customer service, customer satisfaction, customer care and similar topic areas. Google is my best friend! However, I recently came across some surprising facts, which prompted this post. I believe they show a serious problem in the business of looking after our customers today. Read the article and then let me know whether or not you agree with my analysis.

CUSTOMER CENTRICITY

Wikipedia, another online friend of mine, doesn’t have a definition of customer centricity! If you look up the term, you get redirected to customer satisfaction!  Try it for yourself and see.

My other go-to source for definitions is  businessdictionary.com which defines customer centric as:

“Creating a positive consumer experience at the point of sale and post-sale.”

It then goes on to say

“A customer-centric approach can add value to a company by enabling it to differentiate itself from competitors who do not offer the same experience.”

Now although I find the definition limited, since it refers only to sales and post-sale activities, I do like the fact that it mentions three important elements of customer centricity:

  • a positive customer experience
  • adds value to a company
  • enables differentiation

This clearly identifies three huge benefits of becoming (more) customer centric:

  1. A positive customer experience has been shown to increase both loyalty and advocacy.  As we all know, it costs five times more to acquire a new customer, as it does to keep a current one. Therefore loyalty is an incredibly valuable benefit for a brand.
  2. Adding value to a company also increases the ROI of its marketing investments. This is something that marketing is challenged to prove today, with the risk of seeing their budgets cut. Luckily, what’s good for the customer is good for business. You can see many more facts and statistics about this in Forrester’s report “The Business Impact of Customer Experience.”
  3. The third benefit is just as important to the growth of a business. Enabling differentiation in this complex world is invaluable in standing out from the competition. In so many industries product performance and services are almost identical, so how can you stand out? By your customer care, that’s how and knowing what your customers really want . It has been shown that customers are willing to pay more for excellent customer service. You can read a summary of this and more in the summary report of the American Express research.

I would also add that what customers really want today is a seamless experience from pre- to post- purchase, as well as from on to offline. That’s how you deliver satisfaction and build loyalty.

Find out how good you are at customer centricity. Take the quiz now.

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THE IMPORTANCE OF CUSTOMER SATISFACTION AND UNDERSTANDING

There is no denying that customer centricity is important. However some companies are (too?) slow to adopt best practices in this area, which concerns me for a number of reasons:

  1. It is now proven that it is important for the business, so what is stopping companies from quickly adopting a more customer centric approach? The longer they wait, the more they risk being beaten by a more customer friendly competitor. It’s no longer (just) about product performance.
  2. Customers are complaining – a lot – about the way they are being treated. Why are companies not accepting these criticisms as the gifts they are? Acting promptly before the issue becomes a social media viral discussion is essential today.
  3. Customer service is confused with customer satisfaction. Companies are happy when their customers say they are satisfied, but they should be looking not just to satisfy them but to delight them too!

As mentioned before, the research that prompted this post was a google keyword investigation of terms related to customers. Having seen the strong positive trend for the word customer, I then wanted to understand what it was about customers that was of interest. I found that both customer service and customer care showed almost identical positive trends.

However, when I looked at customer satisfaction and customer understanding the trends were flat and worse, minimal. (You can see the trend graph below with service in green, care in blue, satisfaction in red and understanding in yellow)

Google trends on measuring customer centricity

Click to see original

These trends suggest to me that companies search how to improve their customer service and care, but not about how to understand their customers or increase their satisfaction!

How can this be? Surely an interest in customer service should come from an increased understanding of how to deliver customer satisfaction? Apparently not.

And this is when I realised that perhaps businesses are more interested in the process than the real benefit of customer centricity. That is a serious flaw in their thinking in my opinion. What do you think?

To confirm my hypothesis, I looked into customer satisfaction levels and their trends. After all, many more companies are interested in customer service these days. So you would think it should have a positive impact on customer satisfaction.

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According to the latest report from  The Institute of Customer Service on customer satisfaction across Europe, retail, insurance and banking are the three best performing industries.

This was a surprise to me because they used to be the most heavily criticised. However this suggests that they have taken action, albeit because they had little choice, but most other industries continue to ignore what their customers really want. You can see the Infographic overview above; click on it to see the full-sized original.

I then went back to Google to find ways which were suggested for increasing customer satisfaction. I found more than  two million articles on how to do it, but very few on the results. Again, extremely worrying.

According to the US ACSI (American Customer Satisfaction Index) August 2019 report, customer satisfaction is once again on the decline in the USA.

measure customer centricity

National ACSI Scores, 1994 to Q2 2019 (0-100 Scale) (PRNewsFoto/American Customer Satisfaction)

As mentioned in their press release accompanying the Q2 2019 results “With few exceptions, the rate of growth in consumer spending – which accounts for almost 70% of GDP – has declined since 2016. ACSI is still below its high watermark from 2017, yet GDP growth has, by and large, increased over the same time periods.”

“This is untenable in the long run,” said Claes Fornell, ACSI Founder and Chairman. “It’s also untenable for customer satisfaction to weaken and for consumer spending to strengthen in the long run. But that’s what happened in the second quarter of 2019.”

The UK is showing a similar negative trend. The UKCSI is currently 77.1 (out of 100), 0.8 points lower than a year ago. This is the fourth consecutive, though small, drop in customer satisfaction since July 2017, when the index score was 78.2. This has no doubt also been negatively impacted by the Brexit vote and ongoing struggle to negotiate terms with the EU.

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UK Customer Satisfaction Index 2019

THE KEY TAKEAWAYS

So what does a business need to do to deliver what their customers really want today and increase their level of satisfaction? There are seven facts that become apparent from this analysis:

  1. Businesses should always provide a positive customer experience and do whatever it takes to satisfy, but ideally delight.
  2. Companies need to go beyond the mere process of customer centricity, to truly put their customers at the heart of the organisation.
  3. Customer centricity adds demonstrated value to a company; it should be a no-brainer.
  4. Customer centric improvements are happening too slowly in most industries, especially when customers are becoming increasingly demanding.
  5. Providing customer service doesn’t guarantee customer satisfaction.
  6. A positive customer experience increases loyalty and advocacy.
  7. Excellent customer service enables differentiation and even higher prices.

In summary, people want businesses to listen and understand them. When a customer takes the time to contact a company because they are unhappy, they expect a satisfactory outcome as a minimum. Those organisations who go beyond, to deliver delight, will see their reputation improve, as well as an increase in their customers’ loyalty and advocacy.

Customers also want companies to be open and transparent. They want answers to their questions and criticisms. They have a right to know the source of ingredients, the ingredients themselves, their country of origin, the charities the company supports, or the organisation’s policies on waste, water and sustainability. What customers really want today is to have their questions answered (almost) immediately, especially on social media. They expect things that go wrong to be put right – quickly, with an equally rapid explanation and apology.

So how are you doing? Are you living up to your customers’ expectations? Are you delivering what your customers really want? How have you made progress in this area in the past year or so? Please share your success stories below.

Republished with author's permission from original post.

Denyse Drummond-Dunn
Denyse is the Creator of the Quantum Customer Centricity (QC2™) Model. QC2™ is the New CX for organisations that want to find atomic steps that deliver quantum results, attracting, delighting & retaining more customers. Denyse is Nestle’s former Global Head of Consumer Excellence and has >30 yrs’ experience as a Speaker, Advisor and Author. She delivers inspiring keynotes, motivational talks and actionable training. Her global business consultancy, C3Centricity, has expertise in over 125 countries! Check her website and connect to discuss if she would be a great fit for your next event.

3 COMMENTS

  1. Denyse,

    I think the challenge of customer-centricity is that we have always put the customer at the center, which means you must already have a customer. How do you figure this out with nothing but lagging indicators if you are creating a new business, or a new offering?

    I’m sure there is a way to understand “customer” needs using a set of predictive metrics that both targets unmet core needs (the ultimate reason a product / service is acquired), and also needs that are specific to how related services wrap around the solution (e.g., how it’s acquired, how they learn to use it, how they configure it, how they get support, etc.).

    The missing ingredient in customer centricity today is not the customer, it’s what the customer is ultimately trying to accomplish…which can be understood without having a customer at all.

  2. Hi Mike,
    Thanks for your comments.
    First, let’s agree to disagree about putting the customer at the heart of business; from my experience most say they do but you just need to take a quick look at their website to see they don’t!
    I actually believe that new businesses have a better chance of being customer centric IF they do the right work before launch. By right I mean identifying a gap in the market based on customers needs and / or desires, and then clearly describing those most interested in the concept.
    Can you explain a little more how you would go about understanding how to identify what a group of customers is trying to accomplish without them? I have always found observation and listening to be the clearest way, but open to your suggestions.
    Thanks again for commenting.

  3. I completely understand your initial reaction. First, I should frame this customer experience conversation as both

    1. creating the right product or service (helps customers get done what they are trying to accomplish, hopefully without cobbling multiple solutions together (problem space)
    2. create the best experience for users of the product (or service): learning to use, using, maintaining, upgrading, etc. etc. (solution space)

    If you haven’t done the former, then you can optimize the latter until the cows come home. Once another option comes by that helps them accomplish their goal better, or get it all done on a single platform, they will discard yours. These two things must work in tandem, and the organization has to work together using a common operating / thinking model.

    We can both think of many examples of disrupted industries. Think of the vinyl record / turntable industry, or the cassette tape, cassette player industries. I had a really cool component system at one time. I loved it. It had all kinds of cool features. But, I couldn’t take it to the beach (boom boxes), I couldn’t listen to music while out for a run (walkman, mp3, ipod, smartphone. I certainly couldn’t watch netflix on it!

    My point is that the best customer experience comes from looking at markets through a stable model; such as the market of music enthusiasts who listen to music. Solutions continually change to address more of what we are trying to accomplish, in many contexts. There is nothing my turntable brand could have done to keep me. There is nothing Eastman Kodak could have done to keep me.

    Imagine staying with a brand for 50 years today. I can’t. That can only happen if they have a lens that sees the market beyond the current solutions. The opportunity to continue delivering value to your customers simply requires it. The evidence is clear. Optimizing customer interactions is in the solution space. We also need to focus on the problem space – which is about goals and objectives, not solutions and interactions.

    You can read more at jobs-to-be-done.com.

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