How Customer-Centric Are You? Three Simple Questions

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Davis Rance’s recent post on Alignment Really Does Make a Difference—to Customers and Employees struck a chord with me. It also reminded me of a recent post by John Hagel on his Edge Perspectives Blog called Tests for Customer Focussed Companies. In the post, Hagel offers three questions to ask of any C-Suite executive who claims his company is customer-centric.

1. Who in the organisation holds real decision power.

As likely as not the answer will be an executive responsible for products, rather than one responsible for customers. If an executive responsible for customers isn’t calling the shots in the organisation, then how can it really be customer-centric?. As the old saying goes, “He who pays the Piper calls the tunes”.

2. What are the primary measures of performance of the organisation?

If those with real decision power are responsible for products, it is highly likely that in addition to the usual financial measures, it will be product measures, particularly sales & margin, that get measured. Other than the ubiquitous customer satisfaction, customer measures may not be measured at all. If customer measures aren’t center stage in the organisation, then how can it really be customer-centric?

3. What is the primary focus of the organisation’s brand promise?

Take a look around you. Most brands are about themselves or the companies that own them, not about customers. If the organisation’s brand promise isn’t all about customers, then how can it really be customer-centric?

C-Suite executives have tough choices to make. But if they really want to become customer-centric, working out what has to be done to answer these three questions in the affirmative is a great place to start.

What do you think? Is your organisation customer-centric? Or do products still rule the roost?

Post a comment and get the conversation going.

Graham Hill
Independent CRM Consultant
Interim CRM Manager

7 COMMENTS

  1. Hagel offers three interesting questions, that should cause CxOs to stop and think.

    But are these the right three questions? I’m not aware of any studies backing that up.

    I think there’s a difference between being “customer-focused” and “customer-centric.” A company that segments customers by their value and then assigns hard-charging sales reps to close business could rightly claim to be customer-focused. But would customers agree? I doubt it.

    Hagel’s questions are a product of inside-out conventional “CRM” thinking. They don’t really get at the essence of being customer-centric, which is about delivering the value that customers want.

    Dick Lee and David Mangen, in cooperation with this site, conducted a study that looked customer-centricity through the eyes of the customer. Two articles summing up findings of that work:

    My CEM study also shed some light on characteristics of companies that deliver “consistently excellent customer experiences”—one aspect of customer-centricity. Customers rated experiences (interactions with an organization’s people and systems) as equally important to earning their loyalty as the quality of the product/service purchased.

    The top five characteristics were: well-trained and helpful employees, excellent customer service, high-quality products and services, friendly and caring employees, and personal attention/rewards for loyalty.

    Based on these studies, I’d suggest questions like these as a better test of customer-centricity:

    1. Is your company delivering high-quality products and services?
    2. Are your employees empowered to take action to quickly resolve customer issues?
    3. Are employee/customer communications open and honest?
    4. Are you loyal to your customers?

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  2. Bob

    Hagel’s questions are easy to criticise. As you point out, the questions are not about what customers’ want. But that misses the point.

    Hagel’s questions are about creating an environment in which customer-centricity can flourish. It is management that is largely responsible for creating this environment, not customers. As Hagel points out, if those in power are not driven by customers, if key performance measures are not about customers and if the organisation’s brand voice to the outside world isn’t about customers, there is little chance that it will be customer-centric. Hagel’s questions are supported up by the Marketing Science Institute’s ongoing academic research programme into Market-Orientation.

    Hagel goes on to point out in his post (and earlier posts) that organisations increasingly are faced with a tough choice between focussing on relationships with customers, on innovation & commercialisation, or on infrastructure management. Too many organisation’s fall into the trap of wanting to be customer-centric without having first created an environment where this is possible.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  3. Graham, apparently you missed my point.

    Being customer-focused may be a step towards being truly customer-centric. Although I could argue that a sales organization is always customer-focused (how else to get that commission check), but this may have nothing to do with whether sales reps are customer-centric.

    I think it’s dangerous for you to take Hagel’s blog which used the term “customer-focused” and repost his points under the banner of “customer-centric.” You imply that they are one and the same. They are not. When customers are asked how they define a customer-centric organization, they don’t use Hagel’s questions.

    Hagel’s questions are fine for companies starting down the road, with a first step at inside-out “CRM” thinking. Just don’t stop there if the goal is to be truly customer-centric.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  4. Bob

    Is customer-focus the same as customer-centricity? What about customer-orientation (which academics generally use)? Does it really matter? Personally, I think not. What does matter is that we identify the attributes that underlie the concepts, that we understand how they work and that we prove how they work through robust, academic-grade research.

    Other than customer-orientation which academics have pretty much nailed over the past 20 years, the definitions of customer-focus and customer-centricity are still very much work in progress.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  5. Graham, you trivialize an important point.

    As David Rance has found in his work, there are stages to customer-centricity. It is not a case of, you have it or you don’t. Organizing internally around customer needs, which I believe Hagel’s questions are geared for, is one part of it.

    I don’t think academics have “nailed” much of anything over the past 20 years. The next study refutes the previous, in their publish-or-perish world. The study you referenced by (The SOCO Scale: A Measure of the Customer Orientation of Salespeople) was indeed published 20 years ago. Nothing more current?

    That said, at least the Saxe/Weitz paper provides a definition: customer-oriented sellers “adopt a problem-solving approach to their work.” Who’s problem? The customer’s problem. Now that would have made a great addition to Hagel’s list: “Do customers perceive your company as helping solve their problems?”

  6. Dick Lee – I’m thoroughly in Bob’s camp on this one. Not only does Hagel miss the boat, but academics in general overtheorize while missing essential ground level points regarding what is or is not customer-centric. But I’d also like to go back to Graham’s original post which confuses two terms, “customer alignment” and “customer-centricity.” I confess, I often do do the same while writing, but after experiencing in Graham’s post how much confusion can result, I vow to be more careful going forward.

    Customer-centricity is about putting the customer first. Customer-alignment, as I use the term and I believe David Rance does as well, is about infrastructure – specifically, changing what needs changing in organizational design, business policies, business process and supporting technology in order to make customer-centricity a functional reality. Clearly the terms are closely related, but they are two quite different sides of the same coin rather than being interchangeable.

    I’ll follow up this thought in a post of my own this week.

  7. Gents

    The lack of common-ground on this seemingly simple question shows how much work we have to do to understand what customer business is all about.

    I will agree to differ on the definitions of customer-focus, customer-centricity and customer-orientation. To me, they are all exactly the same. However, I am willing to be persuaded otherwise by cogent argument backed up with incontrovertible evidence.

    Let’s move on to setting out exactly what customer business is, how it works and how it creates value. This is the real heart of the matter.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

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