One of my clients has done an excellent job in the last couple of years improving their customer experience. However, much of it was the easy stuff and hasn’t had the breakthrough effect they hoped to get. I wasn’t surprised by this problem, and I will explain why in this issue.
It is critical to mention that my client has done an excellent job prioritizing. They focused their attention on the customer-facing teams at first. This strategy is ideal for getting an improvement program off the ground. After all, no one can address everything at once.
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However, to create a breakthrough to change the organization’s culture, you can’t stop there. That would leave one group with a customer-centric mindset and the rest without one. This situation can lead to policies and procedures that conflict between the groups.
Therefore, everyone in the organization has to embrace the customer-centric mindset—even those who never interact directly with a customer. Customer centricity should be an entire organization’s philosophy, not specific departments.
So, today, let’s take a closer look at some of the areas that need addressing in this change effort. Starting with…
Help People Realize How Their Role Affects The Customer
Many people in the organization who do not work with customers might need help with this connection. For example, we worked with RICOH Printers, Canada, which became our case study based on their improvement of 34 points in the Net Promoter Score®1 over 30 months. This increase in NPS also resulted in a ten percent revenue growth in a declining market. The CEO once told me that the only thing he would have done differently would have been to put a measure in every person’s compensation tied to customer experience metrics from the beginning. In his case, RICOH did that later in the process, but when they did, significant improvements manifested.
1Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., NICE Systems, Inc., and Fred Reichheld. Net Promoter ScoreSM and Net Promoter SystemSM are service marks of Bain & Company, Inc., NICE Systems, Inc., and Fred Reichheld.
Don’t Forget the Critical Role Human Resources Plays
Human Resources (HR) significantly influences your efforts to have the whole organization embrace the customer. First, they handle recruitment and talent acquisition. Employing the right people is a significant ingredient in your recipe for success. Next, HR often conducts training, which is another big part of the success of your improvement program. So, having the people on board with your philosophy that will train your team is essential.
Another massively important area that HR deals with is employee engagement and internal communications. We all know happy employees make happy customers. So, you can see that HR plays a critical role in this agenda.
In another case study, the world’s largest shipping company, Maersk Line, improved its NPS by 40 points over a 30-month period, leading to a ten percent rise in shipping volumes. We helped them set the strategy to deliver a customer experience where the customers felt they could trust Maersk and were cared for and pleased. Getting there required every person in the organization to reflect on how they could help achieve that.
So, Maersk’s HR recruited people who are naturally good at creating trust or feeling cared for, and then they trained them to embed those principles into their work.
However, it doesn’t stop there for HR. Next, they created an employee environment that mirrored that, making employees feel they could trust the company and that the company cared for them. They also determined how to incentivize people and communicate those principles in their internal communications.
Recognize How Finance Affects the Customer Experience
This connection becomes evident once you remember who controls the budgets. Finance determines how and when to spend money. Therefore, they will be the ones that will allocate funding for your experience improvement efforts.
Budgets significantly affect whether you can afford the technology that can help you gather data and measure your results. One of the best things I ever did in my corporate role, where I oversaw the experience program, was to get somebody from the finance team to sit in on my meeting to qualify everything we did in financial terms.
Moreover, Finance often does the Cost-Benefit analysis. Now, cost-benefit analysis sounds like an objective comparison from one number to another. However, the reality is that Finance makes many subjective decisions regarding how to account for costs, what comprises a benefit, and how to estimate these amounts, to name a few. Having that experience and knowledge to work with from the beginning of your project ensures that everything that should be included and accounted for regarding costs and benefits will be.
Finance is also helpful regarding pricing strategy, customer profitability, and determining the lifetime value of customers. When I think back to my time in corporate life, we learned through financial analysis that our most significant customers had limited profit, mainly because of the resources it took to take care of them. Also, we found that customers who complained the most and, as a result, were allocated more resources were also unprofitable. So, that profit analysis skill set is another crucial area when building a program that will get the whole company to embrace the customer.
The Legal Team Is Essential, Too.
You might think as you read this one that legal is one department that shouldn’t be customer-focused, and, to be clear, their job is to protect the company. However, how Legal is essential to the experience comes down to these two words: contract clarity.
Suppose an account manager lands a new account. This account was a lot of work to convert and to make it work, the account manager had to make some concessions. However, when it comes time to sign the agreement, Legal hasn’t included these concessions and, worse, has presented an extremely long, very oppressive contract. This situation sets up the experience for failure almost as soon as it begins.
In any business, there is some leeway regarding handling returns, service failures, and related compensation. You can have a strict policy that protects the company or a generous policy that favors the employee. If you leave it up to Legal, they will likely have a strict policy. However, that strict policy may conflict with the experience you want to deliver. Therefore, by working with your Legal department to get them on board with what you need to live up to your brand promise and what they need to protect the company, you will have a much better contract that is clear to all parties.
Balance is critical here. If the organization aims to create an experience that evokes particular emotions, the contracts should reflect that and spur that same one.
However, this balance is in more than the contracts. Legal also affects the balance in regulatory compliance, product liability, marketing and advertising compliance, data privacy, and more. Here is where Legal has an impact on the customer experience.
IT Rules It All (and in the Darkness Binds Them)
It has become a pivotal part of the experience. It handles the website, the apps, the customer relationship management systems, the data security, integration and analysis, and technical support down to the last chatbot. IT was heavily involved in the digital transformation hastened by the recent pandemic. As we move further into artificial intelligence, IT will also handle that. IT has its fingerprints all over the Customer Experience.
So, What Should You Takeaway From All This?
The long and short of it is that you will never achieve true customer centricity without recruiting and converting these inside teams that rarely interact with customers directly. The first step is to let those inside groups know how their roles affect the experience. Then, measure their performance against the metric you choose to analyze your experience improvement efforts.
Customer centricity is an organizational philosophy. It’s not it’s not a philosophy for various departments within an organization. This concept isn’t something one group owns. This centricity should be the focus of the entire company.
Peter Drucker said, “Because the purpose of a business is to create a customer, the business enterprise has two and only two basic functions: marketing and innovation. Marketing and innovation produce results. All the rest are costs. Marketing is the distinguishing, unique function of a business.”
Your business is not a finance organization or an IT organization. You’re not a law firm. The organization serves customers, so fundamentally, that is everybody’s job. Customer centricity has results, too. But to succeed, it needs to be a company-wide effort.
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