Can you hear that? It’s the shot being fired into the air by CEOs the world over saying that they want focus on the customer. CEOs now know that customer profitability is the Promised Land, the final frontier of validation that they’re running their business well. The problem is that while the goal is clear, the quest for how to get there remains elusive. At the root of the matter is that frequently the CEO personally hasn’t thought through how accountability for customer experiences and customer profitability will be wired in, and just exactly what they’re going to ask for and how. In the absence of clearly redefined metrics and methods for accountability, nothing changes.
In my work reporting to company presidents for 25 years, this is the situation I’ve encountered each time I was brought in to work for the CEO to revive and redirect the customer focus agenda. My book, Chief Customer Officer: Getting Past Lip Service to Passionate Action, packages those years of driving customer focus and the customer profitability agenda at Lands’ End, Allstate, Microsoft and many others. It gives both CEOs—and those driving the charge for customers—the tools, decision-making process and approach to make progress inside the "corporate machine." It also gives them the methods to avoid the corporate exhaustion created in the ill-fated cycles of customer "focus," and it tells you how to connect the company for customers to actually get something done!
See if you recognize a bit of your company in this example: A home builder declared its mantra to be "customer partnership." This was based on a new strategy to improve the relationship with customers to such a robust level during the home sale that the customer would rely on the builder for more than just the home. The thinking was that the customer would rely on the builder for services such as move-in support, spring cleaning, fencing, security and ongoing warranty and maintenance. Scads of data were calculated predicting the new revenue stream and the future rates of profitability the customer base would grow to.
The shot was fired into the air by the CEO that the "partnership" challenge was on, and it got every area going with plans, ideas and tactics. However, the metrics everyone was rated on continued to be about the number of houses, the revenue stream of upgrades and the operational-based costs of running the business. Customers were lost in the shuffle.
The language of "customer partnership" wasn’t woven into the metrics of accountability. And that eventually sent a lasting signal to people that, while long-term customer relationships and profitability seemed important, what was being asked for (and paid for) wasn’t changing. "Getting people to sign the contract" was still the end game, not the wonderful experience or robust relationship that would drive them to the heralded new direction of "customer partners."
Guerrilla Metrics
The example above might have been avoided if that company measured and managed the "Guerrilla Metrics," one of the key concepts in my book. Guerrilla Metrics help break through the corporate clutter to actually get customers on the agenda and part of the language of the business. They give the CEO a personal platform for driving the charge and a new set of priorities required to drive the business goal of customer profitability. Guerrilla Metrics give the CEO five simple things they should care about and demand knowing about customers:
- New customers, volume and value
- Lost customers, volume and value and reasons
- Renewals with reasons
- Revenue and profitability by customer group
- Referrals by customer group
This is the elusive personal platform that’s missing for people after the big focus on customers is announced. After the kick-off memo, it’s often extremely difficult to figure out where to perform to meet the challenge. So all of the silos go off and do their own thing. The CEO meets with each independently to hear a report … and the beat goes on. But the efforts aren’t connected to understand their total impact with customers. These questions bring the company together to commonly think about where they need to perform. And most importantly, they cast the effort for the CEO in key areas he or she should constantly be probing for. Here’s what the "Guerrillas" specifically can do for you:
- They can recast business success—based on managing customers as assets. Nobody knows what win or lose is in Customer Land. The quarterly sales goals win out because they are understandable, historically important and quench the need for short term results. Guerrilla Metrics guide the company’s hand at ensuring that a customer is defined the same way across the organization, so customer measurements are consistent and their value can be measured and tracked. Most importantly, they establish a way to clearly know what "Score!" means regarding customers. And it gives the company a way to think about setting customer goals and driving toward achievement of them.
- They can power the customer conversation into the board room. Managing customers as an asset of the business is anecdotally understood but not rigorously established or discussed as a corporate priority with many boards of directors. The Guerrilla Metrics will help to introduce the concept of customers as the asset of the business. They will help you to raise customer issues requiring investment in the light of the customer profitability attached to correctly executing improvement efforts. They will get your board to know the business more intimately, through the lens of customer experiences.
- They can simplify the action and drive accountability. It’s not enough to simply have the metrics. It’s what the CEO does with them that matters. They need to be taken out of the hordes of reports and paperwork and put front and center as part of the CEOs personal mantra.
The Guerrilla Metrics can be used to form the language of meetings. Every major company meeting should begin with a review of them. Consider establishing a "Customer Accountability Room," where a regularly scheduled spotlight is shone on these metrics and their advancement. Use it to kick-start the Guerrilla Metrics into action.
