The New Path to Profitability and Engagement


Share on LinkedIn

The Path
Photo Credit: George Paulides on Flickr

When commerce was emerging in human history, there was an old path that entrepreneurs used to build networks and relationships. However, today as most leaders and managers take their wisdom from the last century, the old path seems like a new one. This new path leads to deeper levels of engagement with customers and employees, provides higher levels of performance for the business. This new path is the customer centric approach to business.

Customer centricity is not a business bolt-on. We can’t bolt customer experience improvement projects and NPS targets onto old business models and expect dramatic results. Iteration is not innovation. It is time to get on the new path.

The customer centric approach to business has Five Tenets behind it, and these Five Tenets demand Nine Imperatives from Leaders.

The Five Tenets to the Customer Centric Approach to Business.
1. Businesses Exist for Customers
Businesses cannot exist for themselves, however they attempt it. Recognising we exist for customers keeps our perspective grounded, it keeps the people in the business grounded on their core purpose – to deliver value for the customer. When we deliver value for the customer (better than alternatives), the customer responds, with repurchases and advocacy. Wells Fargo forgot this First Tenet, yes they have paid some hefty fines, yes some people have resigned or been sacked. But worse still, they have lost the trust of 100’s of millions of people.

2. It’s all about People
People bring businesses to life. Customers are people and that provide the revenue and profit for the business. Profit comes from the decisions customers make, not the product or service offered. And it is the other people – employees – that interact with these customers and design services for these customers. Businesses thrive when people around them flourish.

3. Not all Customers are Equal
Not all customers are right for the value you offer. Your awesome customer is the one that gets the value you offer. And they will reciprocate with increased spend and advocacy. The sum profitability for the business is made up of the profitability of the customer portfolio. In every customer portfolio there is a smaller percentage of customers contributing to the higher proportion of value for the business. The challenge for the business is to find the sweet spot of Two-way Value Exchange.

4. Businesses are Systems that Deliver Value
The business is a collective. The collective output is the delivery of value for the customer (good, bad or indifferent). Business results come from this delivery of this value. The optimal approach from last century was to create silos, for clearer accountability, and then make collaboration a value… As a leader do you manage a system or a collection of parts that compete and conflict..? You customers know the answer.

5. The Need for Progressive Improvement
Your status quo is an evil abode. Your customer’s expectations are changing. There are people out there vying for your customer’s attention. There are people out there disrupting your traditional market place. Your team is motivated by making progress. Make change the thing that does not change.

Using the Five Tenets to the Customer Centric Approach to Business, these Nine Imperatives for Leaders come into focus.

Mark Hocknell Engagement Flow

1. Perspective is about the attitude of the leaders. As we know, the culture of the organisation is derived from the perspective of leaders. In short this is about arrogance versus humility. An arrogant attitude or culture in the leadership group destroys businesses. Reflect on the leaders of the Woolworths/Masters mess whose focus was on beating Bunnings, rather than delivering value for customers. Humble leaders serve their customers, serve their employees and use their skills ensure the delivery of value.

2. A focus on the result or outcome we are trying to achieve will lead to a prioritised set of actions and learning to how achieve the result. Good leaders set the direction, then empower and coach their teams to learn, strive and improve. Distributing targets and KPIs that are not set collaboratively only leads gaming the system and getting a number, not an outcome.

3. Most businesses focus on what they do, then tell anyone who will listen what they do. Our customers today seek value, they seek experiences. People connect with brands and ideas emotionally and intuitively. Create a connection with your customers on value and on a purpose. Give them the reason why. Today, that is true differentiation.

4. The people that are your employees want to connect with the people that are your customers – not your financial outcomes. Employees want to know their work is meaningful, for other people, your customers. Our vision / mission / purpose cannot be about us, but about others, the customer and difference we can make in their world.

5. Most businesses go about their daily activity with a financial budget and set of targets to guide them. Then we wonder why our customer portfolio has customers within it that don’t get our value, they can’t reciprocate the value they don’t get, and then wonder why do they become ‘detractors’ on social media. The activity that attracts and keeps our customers, needs to be guided and coordinated to ensure the system delivers the value we have promised to our customers. Not all customers are equal.

6. To truly resonate with customers Value propositions need to be two levels. One: about why your customers should engage with you, your business. Two: about what your products and services do for them. Value propositions are then addressed to specific customer groups. If we only tell people what we do, we do not allow them to connect with us emotionally.

7. Let’s know what we need to be doing – let’s figure out the optimal activity that delivers value for our customers. That’s what we implement, not with a ‘set and forget’ mindset but with one that is about learning.

8. Now we need to improve it. We need to monitor how we are performing (performance measures help here), understand and interpret performance (learning) and initiate action. Repeat and repeat.

9. Once we have committed to a set of results we will monitor our progress towards the results and communicate to our teams the progress, the learning’s we have gained. People thrive on the feeling of progress.

For any business to achieve its ultimate goal and purpose – to be meaningful and relevant long-term to its customers, employees and owners – the Nine Imperatives for Leaders need to be their literal and moral compass.

Customer centricity is not a business bolt-on. The Five Tenets recognise that business is human centred. The Nine Imperatives for Leaders creates alignment of the resources of the whole organisation for maximum results, for all stakeholders.

Mark Hocknell
Mark is a Customer Centric Business specialist with experience spanning three decades, from line management to consulting and academia. Based in south east Queensland, Australia, Mark led one of the first, large scale CRM deployments for one of Australia's leading financial institutions. For the last fifteen years Mark has consulted to leading organisations in Australia, as well as small-to-medium sized businesses. He is the author of Profit by Design: how to build a customer portfolio full of profitable promoters.


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here