Top

7 Reasons Most Companies Fail to Adopt a Customer-First Strategy 

Denyse Drummond-Dunn | Jun 13, 2017 909 views 11 Comments

Share on LinkedIn

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 for proven business success.

1. The CEO has stated it as a company objective but has not detailed what and 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 ask “awkward” questions to ensure that everyone is embracing it. Without company-wide support, it will never succeed.

The CEO needs to ask the awkward questions to ensure everyone is embracing a customer-first strategy Click To Tweet

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. 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.

What would our customers think of the decision we just made? #CEX #Customer Click To Tweet

3. The project is treated just like any other

As with every well-defined objective, it is important that there is a leader supported by a team, to make progress while also adapting and adjusting as challenges arise in its execution. The same is true for a customer-first strategy.

However, unlike most other projects, this one 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.”

Customer-centricity is a journey, not a destination. #CEX #Customer Click To Tweet

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 Chief Customer Officer who sits on the executive board alongside the CEO, CFO and CMO.

According to this recent 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

Related Post  Four Tough but Essential Decisions Every Business Leader Must Make: Who, What, Why & How?

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 leaders is unlikely to meet with much success.

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.

Successful businesses work with a business catalyst to help them take the important first few steps of… Click To Tweet

6. Everyone in the organisation is not clear 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 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.

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 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.

Print Friendly, PDF & Email

Republished with author's permission from original post.


Recent Editor's Picks:


Categories: BlogEditor's PickLeadershipThink Tank

909 views

11 Responses to 7 Reasons Most Companies Fail to Adopt a Customer-First Strategy

  1. Lisa Yetman June 14, 2017 at 7:08 am (12 comments) #

    I have seen this statement in print and heard it quoted elsewhere, that I am astonished that so many companies do not add this as part of their training – “Customer Service Is Not A Department!” Of course, there may very well be a department with this label, but -in truth- anyone who works for a company, no matter their role, is responsible for customer service. In fact, I believe that the concept of customer service should be a vital part of any company’s culture from the start. Walt Disney took that concept and did, indeed, ingrain these great ways to exceed a Guest’s expectations into the company’s culture – not just for the resorts and parks, but way before that when he started his animation business in Kansas City, Missouri. That is why so many companies have used the same concepts in their own cultures. I am not an owner of any type of company, but if I were, I would definitely model my culture on this tried and true – and proven – method.

  2. Michael Lowenstein June 14, 2017 at 7:09 am (1287 comments) #

    All of these are contributing factors. A customer-first strategy requires a stakeholder-centric culture and set of processes. Without leadership, communication and continuity, employees who are hired, trained, rewarded, and recognized for ambassadorship and value delivery, and a VOC system and analytics which provide real insights into the state of customer experience, it is pretty much impossible to make this happen.

  3. Andrew Rudin June 14, 2017 at 7:47 am (208 comments) #

    The biggest problem in adopting any strategy that carries an adjective (e.g. customer-first, profit, growth, innovation, talent-development . . .) is defining what, exactly, that label means. What does customer-first mean? If no one provides clarity, I trust that your article will be just as current in five years as it is today. When executives in companies don’t understand what certain strategy labels mean, how can they adopt them?

    However customer-first might be defined in a strategic sense, it still has to be translated into goals, objectives, pay incentives, non-pay incentives, organizational structures, guidelines, policies, procedures, contracts, codes of conduct, project initiatives, software design, and ultimately, lines of code and data structures. I’ve left out whole bunches of things, but hopefully you have the picture. If things aren’t clear at the top, downstream efforts become less meaningful and effective.

    In my experience, customer-first has become a reliable talking point, and a common headline on PowerPoint slides. But I think its ubiquity has created knee-jerk acceptance, and corrupted its intended meaning. To me, customer-first means to consider customer outcomes in decision-making, to ensure customer safety is protected, and to ensure their trust is not violated. Can an entire strategy be built on these ideals? Should an entire strategy be built on them? I don’t know. At the very least, I believe they should be included. No epiphany that strategy is complicated, so I eschew any temptation to assign adjectives for my strategic designs.

    Besides the unclear meaning of customer-first, I believe another major reason for not adopting customer-first as a strategy is how often it breaks down when the rubber meets the road. No right-thinking executive would bleed his or her company’s profits in the name of customer-first. If my cost to produce a product is $X, I will sell it for $X plus $something. If that alienates some customers (i.e. puts them “not first”), so be it. Or, what about when paying customers behave badly toward my employees? “Customer first” connotes they should be allowed to do so. But they should not.

    My point is that when conjoining absolutist labels and strategy – and customer-first is one – implementation becomes a huge chore when you have to caveat your strategy with exceptions to the rule. When that happens, the original intent becomes compromised, if not meaningless.

  4. Denyse Drummond-Dunn June 14, 2017 at 11:23 am (29 comments) #

    Lisa, I agree that we have been speaking about the importance of customer satisfaction and even delight for decades. It is therefore shocking that so many organisations talk the talk but don’t walk the walk.
    There are enough examples of customer centric organisations and enough research that proves its positive ROI.
    I believe one of the reasons why businesses still hesitate to start along the journey is that they don’t really know what to do. That’s why I wrote a book on the topic and also this post more recently.
    Thanks for adding to the conversation.

  5. Denyse Drummond-Dunn June 14, 2017 at 11:25 am (29 comments) #

    MichEl, you have succinctly described the problem, but also shown just how much has to change to deliver a customer first strategy. I believe many organisations feel overwhelmed when all these aspects are considered.
    Thanks for adding your comments.

  6. Denyse Drummond-Dunn June 14, 2017 at 11:31 am (29 comments) #

    Andrew you make some great points.
    You mention the point about a customer first strategy meaning to consider them first but not only. I totally agree. A customer-first strategy doesn’t mean selling for less it means providing more value. It means providing the best possible e perience, but not to the detriment of your employees.
    It is true there is a lot of talk and presentations on the topic, which I believe is a good thing. At least it gives me hope that one day we will stop taking off our customers hats when we arrive in our offices.
    Thanks for your detailed thoughts on a customer-first strategy.

  7. Michael Lowenstein June 14, 2017 at 12:54 pm (1287 comments) #

    From my professional experience and personal perspective, it’s not really so much ‘customer-first’ as it is ‘people-first’, whether employees, customers, processes, and experiences are being considered. This is why, more than customer-centricity, the focus should be on stakeholder-centricity in the enterprise culture and processes.

  8. Bob Thompson June 14, 2017 at 8:15 pm (222 comments) #

    Terms like “customer-first” signify a priority or direction, and should not be taken as absolute.

    “Employee first” is another one that some senior executives like to espouse. Should you take that literally? Of course not. If employees are always or only first, how will the company serve its customers or other stakeholders?

    Speaking of stakeholders, I know Michael likes to talk about “stakeholder first” which, based on this comment seems to mean people. Not sure how this can be translated into a coherent strategy. I agree that all stakeholders need to see value (eventually), but can they all be “first”? If you focus on everyone, you’re not really focusing, are you?

    Business leaders have to choose where to focus their attention. Making customers “first” doesn’t mean all other stakeholders are losers. To me, it’s a sign that the organization is clear that, without customers seeing value and becoming loyal and profitable, none of the other stakeholders will have success for long.

  9. Denyse Drummond-Dunn June 15, 2017 at 6:05 am (17 comments) #

    Michael, we exchanged on a “people-first” strategy in one of my previous posts. I Believe Bob expresses my own feelings in a very articulate way, so I won’t add anything else other than to say I’m still happy you commented.
    This is a great forum for challenging each other to become ever-clearer on the priorities of business and I for one find these exchanges invaluable. Thanks Bob for creating this amazing site!

  10. Michael Lowenstein June 17, 2017 at 8:21 am (1287 comments) #

    To repeat, my perspective is not based specifically on customers-first or employees-first, Rather, it is closer to being a people-first strategy. It is a management concept based on stakeholder-centricity, the delivery of rational and emotional value for all involved with, or in, the enterprise. An upcoming post will further explain the position and concept.

  11. Denyse Drummond-Dunn June 18, 2017 at 2:07 am (17 comments) #

    Thanks for your clarification Maichael. I look forward to your next post and learning more.
    Thanks also for connecting.

Add Your Comment (All comments are reviewed by moderator, no spam permitted!)