Customer Experience = Seeing + Being + Doing
Customer Centricity is the umbrella for concepts like Customer Experience, Customer Intimacy, Customer Advocacy, Customer Loyalty, etc. With their 1998 Harvard Business Review article “Welcome to the Experience Economy” (and 1999 book), Joe Pine II and James Gilmore introduced the term Customer Experience as the next competitive battleground. Since then, customer experience has become ‘institutionalized’ as a key domain to generate sustainable competitive advantage. With many companies struggling to successfully do so, to walk the talk, combine a holistic understanding of the ecosystem (‘seeing’)*with a way of leadership (‘being’)*, an end to functional silos, cross-functional collaboration, multiple value creation and a cross-functional governance framework (’doing’)* to successfully and sustainably transforms organizations into doing and being truly customer centric.
The purpose of a large multinational:
“To put a Smile on our customers’ faces today and tomorrow. It is always our pride and joy to bring a Smile to everyone we come in touch with. A simple smile can make a huge impact.”
On the same day I happened to read this, I came across a post on Facebook going viral about the horrible in store experience of a customer of this company, made even worse by the switched off behavior of the shop assistants and their manager.
This example is illustrative for what happens to many companies that set out to be customer centric. The company uses a catchy one-liner which is not consistent with what their customers (and their employees) experience. “Putting our customers at the heart of everything we all do” is easier said than done.
Customer Centricity is often driven by a passionate ambassador driven by the ambition to make a company more successful, whilst making employees and customers happy. Well aware of the benefits it will bring the company, like greater employee engagement, efficiency gains (15 to 25% lower costs), enhanced customer engagement (20 to 40% increases in customer advocacy, and increased loyalty), and top-line growth (10 to 20% increase in revenue; improved conversion rates, relationship deepening, greater share of wallet, autonomous growth).
Customer Experience is a much-hyped concept, and the span of it is often underestimated. Which is more than a missed opportunity for a company. Not being successful also has consequences for people. This applies to both customers and employees. All too often people draw hope from the ambition that things will change for the better. If they are disappointed in this, it not only has negative consequences for the resilience of the organization, but also translates into increasing costs and declining profitability.
Gus Speth, former dean of the School of Forestry & Environmental Studies at Yale, has been widely attributed to say: “I used to think the top environmental problems were biodiversity loss, ecosystem collapse, and climate change. But I was wrong. The top environmental problems are selfishness, greed, and apathy.” Speth went on to say that “to deal with those issues we need a spiritual and cultural transformation”.
Having been responsible for customer operations departments employing thousands of people, I can especially relate to the apathy in Speth’s quote. Many times, when I started in my role, I was confronted with a frontline consisting of people who showed apathy. With Customer Centricity, one of the biggest challenges is to create an environment that feels safe enough for people to (be brave and) transform. From the ‘human doing’ that they have become, hanging 80 percent of who they are, of their potential as human beings, with their coats on the coat rack, to only bring in the 20% needed to carry out the tasks assigned to them. To bringing with them to work their 100%, i.e., their full potential as human beings. To start serving customers in ways that make them and the customers they serve happy. Creating experiences that are meaningful to customers, and themselves. An environment that is satisfying for both, and fun to work in and to be a customer of.
Why Customer Centricity fails
Customer Centricity is essential for a company’s long-term success and growth. Key because it leads to long-term business success. It helps companies gain a competitive advantage and differentiate themselves in the marketplace. It leads to improved risk management and brand reputation.
Customer-centric companies attract and retain top talent. Employees who feel that their contributions are valued and that they are working for an organization that is making a positive impact in the world are more engaged and motivated in their work and perform better.
Reasons why Customer Centricity fails:
- Lack of proper alignment and buy-in from senior leadership
- Limited customer insight
- Inadequate processes
- Failure to adapt
- Short-term focus
- Resistance to change
- Lack of resources or investment in customer-centric initiatives
- Lack of clear metrics and measurement
- Lack of accountability
The latest research from MyCustomer.com in collaboration with the European Customer Experience Organization (ECXO) reveals that half of all CX leaders view organizational silos as a significant obstacle to success. Published in March 2023, the research report –Customer Experience Leadership In An Uncertain Economy*– asked 150 senior customer experience leaders about what they believe will be the biggest obstacles to the success of their CX programs in the next 18 months. As with the previous two studies – conducted in 2020 and 2022 – organizational silos was the most commonly cited obstacle (reported by 50% of respondents), with company culture the next biggest challenge, cited by 40% (see Figure below).
Taking an organization from talking about Customer Centricity to actually being and doing it, is no small feat, and most companies fail at sustainably transforming their organization. The BIG5 of Customer CentricityTM is a framework to guide and inspire people with the ambition to sustainably transform their organization into a customer centric environment. The pieces of the puzzle are shaped like a heart (see Figure 2), bringing the message home that if you take out one of the 5 puzzle pieces, you lose the heart, illustrating their interconnectedness.
It provides the building blocks to help companies on their way, as well as measure and manage their progress during the journey. It’s not a tool to ‘manage the process’ but a guide for the journey to a different way of being and doing, because it’s not something with a start and a finish, but needs to become an intrinsic part of the way of working of a company, making an organization much more resilient. Which is what makes it so valuable in these times were the only constant is change.
Value creation is about more than money. Customer Centricity means to transform from profit at the core (everything focused on the bottom line) to value at the core (multiple value creation). Humans are meaning makers. Only humans are capable of adding value at an emotional level. Their performance can be measured in quantity (output) and quality (impact). The two must be balanced, by not directing people at task level, but at the balance between output and impact. Not only doing things right, but also doing the right things in the perception of people (customers, but the same goes for employees). From shareholder to multiple value creation, stakeholder and people-driven, increasing value for all involved.
What gets measured gets done! Measuring, managing people in old ways (the ‘industrial paradigm’), keeping your eyes on the quantitative KPIs, results in efficiency without a soul, and an organization at risk of being outpaced by competitors who successfully add soul (meaning). With a Customer Centricity governance framework (‘Value’) comes visibility, and accountability. It also comes with (rare) business analyses capabilities, and, obviously, dependable data sources and a good data warehouse (‘Brilliant Basics’). It is crucial to create insight across organizational boundaries (see Figure 1, the most commonly cited obstacle), making causal relationships and interdependencies visible and tangible, facilitating cross-border connections and dialogue, aligning departmental and organizational goals, creating synergy, focus and ownership of a shared goal. Avoiding isolated departments that pursue their own goals (especially paying attention to compensation and bonus structures). Too often KPIs are isolated in silos, and not correlated across departments. And that is where the most valuable insights lie. A Customer Centricity governance framework is a challenging project, and learning process, which takes time to build, and to learn to work with. It’s the piece of the puzzle where everything comes together. Once it starts to work, enthusiasm grows, and becomes more and more contagious. Which feeds into culture (see Figure 1, company culture being the next biggest challenge; the puzzle pieces ‘Strong, Shared Sense of Purpose’; ‘Care’; and ‘Consistency’).
A company that desires to be customer centric has to keep its eyes on the horizon (why, ‘dream’, ‘Strong, Shared Sense of Purpose’), and at the same time the bottom-line. The art is to combine the two.
Customer Centricity can only be successful when each and every department, discipline, and person in the organization is aligned and consistent in their Seeing + Being + Doing.
Copyright: Nicolette Wuring (June 2023)