Why is customer centricity such a challenge?
Theories abound ranging from customer ownership delegated to someone other than the CEO; a culture that does not appreciate the link between employee engagement and customer success; lack of in-depth customer understanding; processes that don’t consistently deliver a valued lifetime experience; or a perspective that customer engagement belongs to marketing, to name a few.
From my experience working with Fortune 100 to 5000 companies across a wide range of industries, these ‘theories’ are at play but they are not the root cause of the challenge. That lies in their business strategy.
Setting business strategy is as critical to an organization’s success as having delighted customers. The first sets direction and focus. Done correctly it enables employees and partners to align their efforts, resources and plans to achieve the measurable and time-bound objectives of the organization. The second, delighted customers, is the path to market share growth. Yet many business plans lack specific goals or objectives for customer success. The two are one; not separate.
The role of the annual business plan is to get everyone in the organization to have a shared vision of the future and agree on what needs to be done, when, by whom and with what resources to achieve target end state. Only through planning can we confirm that everyone sees the same thing and has worked through the issues to reach that point of acceptance. Not only does everyone in an organization need to sing the same verse from the same hymn from the same book, they need to also sing it with the same level of gusto. It sounds trite but it can be hard to achieve.
Most organizations have no problem setting goals. Goals are broad statements of the company’s aspirations for the future, stated in external business environment terms, are generally enduring and often not measurable. Rarely do companies struggle with setting goals around revenue/profitability, mindshare, reputation, market share, product mix, thought leadership, organizational agility, culture or customer success. A typical customer success goal is worded along the lines of: “To maintain solid, sustainable customer relationships with the highest level of loyalty and sustained satisfaction.”
The challenge comes in defining objectives. Objectives are internally focused and defined in financial, statistical or numerical terms. Performance against measurable objectives is the prime indicator of whether the related goal is being achieved. While goals are stated in multi-year terms, objectives are time bound and stated in quarterly, monthly and/or annual terms.
Planning teams inevitably get stuck on setting objectives for the ‘customer success’ goal. They get stuck because the company often views customer delight / loyalty / satisfaction (pick your favorite label) as a separate set activities loosely related to other goals.
Nothing could be further from the truth. Customer success is interdependent as well as part of all other goals. Miss any goal’s objective and it will have a direct impact on achieving customer success.
Two things typically happen at this point. An epiphany occurs on the depth of the interdependency between the rest of the business plan and customer success. Or management focuses on putting customer success in a box. Most companies opt for the latter because addressing the interdependency is seen as “opening Pandora’s box”. Their focus, incorrectly, is on finishing the plan instead of planning a path to assured success.
The missed opportunity is on the road less traveled.
Companies that invest the time to understand their current and future target customer groups’ lifetime ‘value’ expectations and match them to the organization’s strengths, weaknesses, market opportunities, threats and resources consistently develop more achievable strategic plans in good times as well as bad. Best-in-class companies do this matching across a number of internal and external scenarios to identify where the ‘rubber meets the road’ in achieving true customer and company success. Not only are their plans more consistently achieved, their companies also have significantly greater internal alignment, are more agile and innovative.
The most common push-back to this approach that I hear is “it takes too long”, “we know our customers”, “our business strategy is not dictated by customers”, and/or “we don’t have time to overhaul our strategy”. None of these are really true; they are just excuses for not getting outside of one’s comfort zone and seeing the many shades of future reality.
Leaders looking to ground their business strategy in customer success can start by:
1. Journey map the lifecycle of their highest value current and target customer groups.
2. Map interactions, their associated emotional and value states.
3. Conduct a detailed SWOT, emerging trends and competitive chessboard analysis.
4. Co-create with highest value customer groups a higher value-producing, distinctive customer lifecycle experience.
5. Evaluate current 12 to 36-month macro-strategy against #3 and #4, identifying areas of change.
6. Define the target end-state and timeframe for change area.
These six steps will give you a solid start down the path of customer-centric business strategy. The key is to not boil the ocean, be too attached to sacred cows, and limit future opportunities by screening them based on today’s resources and market states.
The holistic focus enables employees to understand the key interaction/process activities, emotion/culture intersections, and internal/external variables that drive preference, engagement and market share growth. Embracing the interdependency of customer success turns the platitude of customer delight into a tangible, achievable reality.