7 Reasons for Failure When Adopting a Customer First Strategy

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By now, every CEO knows that a stronger customer focus is the answer to many of their business challenges. Why therefore do so many companies still struggle to adopt a customer-first strategy and culture?

Read on for my own thoughts and perspectives on what should be a top company objective which results in proven business success. 

I provide answers to the seven main reasons why companies fail to adopt a customer first strategy; which one are you struggling with today?

 

1. The CEO has stated it as a company objective but has not detailed what nor how the organisation will change

While it is essential that a customer-first strategy has a board-level sponsor, it is important that every employee understands their role in making it happen. It should not be treated as just another project but as a long-term company top 3 objective.

When this happens, every division is obliged to see how they will be impacted and what part they will play in meeting it. This is one area where the CEO can’t set it and forget it. He/she needs to be regularly informed of progress and then ask “awkward” questions to ensure that everyone is truly embracing it. Without company-wide support, it will never succeed.

In August of last year, the Business Roundtable, which is an association of over 180 CEOs leading US companies, agreed to put people before profits. They specifically said they would be:

  1. Delivering value to our customers.
  2. Investing in our employees.
  3. Dealing fairly and ethically with our suppliers.
  4. Supporting the communities in which we work.

With many organisations now struggling with the impact of covid-19, it will be interesting to see whether they will have all moved forward on these objectives one year later. For more details on this announcement I suggest you read the Forbes article.

 

2. The organisation has not fully embraced the strategy

As mentioned above, everyone has a role to play in satisfying and delighting the customer. It is not the job of marketing, sales or market research alone to understand their needs. It is vital that each employee thinks customer first and ensures that every action and decision they make is customer centric.

One easy way to do this is to ask this question at the end of every meeting:

“what would our customers think of the decision we just made?”

If there is something they wouldn’t like or you know that you yourself wouldn’t approve of, then it needs to be reconsidered.

I would also suggest reading the recent post “7 Ways to Deliver Awesome Customer Service.” It includes seven recommendations so that everyone in an organisation can treat the customer with the respect and great service they deserve.

 

3. The project is treated just like any other

As with every well-defined objective, it is important that there is a responsible leader supported by a well-rounded and experienced team to lead the customer-first adoption. They will be responsible for ensuring that every department identifies and makes progress in the desired direction. They will also be able to adapt and adjust the plans as challenges arise in its execution.

This is the same for every project, not just that of adopting a customer-first strategy. For more on project management I suggest reading the post “Getting to Yes: A 7-step Roadmap to Successful Project Management.”

However, unlike most other projects, adopting a customer first strategy will not have an end date! It should have a timeline to identify milestones, of course. But as the customer will continue to change, the actions needed will need constant adaptation. I like to say that “customer-centricity is a journey, not a destination.”

 

4. The initiative does not have a visible leader

The initiative must have an executive sponsor and a passionate and charismatic leader, to excite and drive the whole organisation towards a more customer-centric approach to business.

Once the board has endorsed the initiative, the every-day leadership should be handled by someone who exemplifies customer-centricity and has a passion for customer delight.

In the most customer-centric organisations, this person is a CCO (Chief Customer Officer) or CXO (Chief Experience Officer) who sits on the executive board alongside the CEO, CFO and CMO.

According to this article in Forbes, the responsibilities of a CCO are to:

  1. Bring The Customer To Life
  2. Reach Outside The Organization
  3. Involve The Front Lines
  4. Embrace The Data

As you can see, these are actions that demand specific capabilities that complement rather than replace those of the heads of sales, marketing and PR. That is why a customer-first strategy needs a separate functional head. Trying to integrate these into the responsibilities of these other leaders is unlikely to meet with much success.

Some of the best CCOs / CXOs come with a background in customer service or market research. This is because both professions prioritise the need to not only know but also understand the customer.

Another Forbes article highlights some of the dangers of appointing a CCO or CXO. These include thinking that the job is then done, or that the person remains just a figurehead without any power to change company structure nor culture. It certainly makes interesting reading if you too are contemplating recruiting a customer representative and will help you to avoid many errors.

 

5. No-one understands how to move the initiative forward.

When you don’t know where you’re going, most people are afraid to take the first step. But that’s the only one you need to know. It’s easier to course-correct when you are moving than when you’re standing still. As already mentioned, customer centricity is a journey, not a destination.

That’s why many organisations now work with a business catalyst to help them take those all important first few steps. Once the project is up and running, occasional sessions are then sufficient to keep the internal excitement for the customer growing.

If you are nervous about “going it alone” then let’s discuss your first moves. Just contact me for an informal chat.

 

6. Everyone in the organisation is unclear about their role in satisfying and delighting the customer.

It is well-known that companies such as Amazon and Zappos have new employees enjoy direct contact with the customer from their very first days’ working in the company. However, this is something that should also be encouraged on an ongoing basis as well.

Ideally, every employee should get the chance to watch, listen and interact with customers regularly. The best organisations have such connections on every employee’s annual objectives, specifying such exchanges on a monthly basis as a minimum.

If you would like to start making regular contact with your customers in person, rather than through your care centers, then I would highly recommend you read “Five Rules of Customer Observation for Greater Success.”This article will help you to avoid the mistakes many make when observing the customer for the first time. It is also a useful reminder for those who have been connecting for a long time and may have some bad habits they need to correct.

 

7. They think it costs too much

While this may be the perception, in reality, it costs a lot more NOT to adopt a customer-first strategy. It makes both business sense AND customer sense.

There has been so much research done on the impact of adopting a customer- first strategy that there is no doubt that it provides a positive ROI (return on investment):

  • Walker found that 86% of buyers would pay more for a better experience.
  • Genesys showed that improving the experience for customers is the key to increasing retention, satisfaction and sales.
  • Deloitte and Touch claim that customer centric companies are 60% more profitable.
  • Bain & Company research shows that increasing customer retention rates by 5% increases profits by between 25% and 95%.

These numbers should be sufficient to convince every CEO that a customer-first strategy is worth investing in. In fact, it is an essential strategy every CEO would be wise to adopt, no matter what industry they are in.

So what are you or your CEO waiting for? Did I miss a different problem you are currently facing? What other challenges have you faced or are now facing in adopting a customer-first strategy? Please let me know by adding your comments below.

 

2 COMMENTS

  1. Customer experience is arguably the most critical aspect of growing your business as it plays a role in lead conversion, customer retention, and that all-important bottom line.

  2. Thanks for your comment sachinreddy.
    Numerous research studies have shown that companies putting the customer at the heart of their business, grow faster and more profitably than those that don’t. I am always amazed how many organisations only talk about it and don’t walk the talk. They are leaving money on the table.

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