Customer centricity can unlock a multitude of benefits. Aaron Bean, advisory services, UK&I sales and marketing group lead at EY, provides five tips for putting the customer first
In today’s intense competitive environment, where customers are increasingly informed buyers with a plethora of options at their fingertips, every organisation understands the importance of meeting the needs of their customers. After all, if you don’t someone else will. Most organisations nowadays have bold customer ambitions but, in our experience, often fall short in delivering on these good intentions. In reality, most organisations talk a good game and may well be customer focused but fail to deliver on being truly customer centric. Evidence suggests this is costing them between 12-18 per cent of incremental profit per year.
Customer centricity can mean many things. Just typing the term into Google returns over 645,000 hits. We define it as ‘truly understanding and anticipating customers’ needs and using this to design and deliver a unique experience across the entire organisation that effectively meets these needs in a profitable way.’ This is easier said than done, but getting it right unlocks huge value in the form of increased loyalty and cross-sell, improved acquisition and lower cost-to-serve.
Here are five key reasons why companies fall short, and how they should respond:
1. Organisation first, customer second – organising the customer experience around internal functions and constraints as opposed to making the customer’s life easy.
• Ensure customer journeys are designed without organisation constraints in mind and are agnostic of organisational structure, minimise handoffs and focus on solving the customer’s problem in the most efficient and effective way for them.
• Beware the hidden impact of aggressive cost cutting efforts and driving customers online. Customers like choice (but not too much) and to do business on their terms.
2. Poor sales and marketing alignment – the success of sales and marketing is inextricably linked, contrary to the perception of many sales and marketing functions. Often the role of one of these groups needs overhauling to give it more influence and drive mutual value.
• Get marketing involved further downstream (i.e. supporting the sales cycle) and sales involved further upstream (defining customer strategy, campaigns etc) and create mutual objectives.
• Increase the value of marketing in the eyes of sales by making them responsible for articulating (in your customers’ own words) how your offering helps make your customers more money, what this equates to in profit versus your competitors, and getting this insight into the hands of the sales teams when it matters.
3. Too much self-promotion – nothing turns a customer off and fosters distrust more than pushy sales. The era of pushy sales is over.
• Focus on understanding customers’ true needs and help them make the right, informed decisions about how to best address those needs – it’s a far more powerful way to sell.
• Improve insight-based selling that creates customer pull.
4. Talking big data and not using the ‘little’ data available – failing to use data to manage and optimise the customer experience. A recent Havard Business Review blog showed, on average, marketers depend on data for just 11 per cent of all customer-related decisions. Too often data does not lead to insight, and insight into practical action.
• Don’t obsess over big data – focus on extracting maximum value from your ‘little’ data first, which is in abundance.
• Ask the right questions and capture data that helps you do something different or make a decision.
• Understand the economics of your business including potential value and the cost of poor service so you can invest accordingly.
• Invest in analytical software packages to put advanced analytics in the hands of decision makers in an easily digestible format.
5. Not focusing on what really matters – under-investing in the things that do matter and over investing in things that don’t, and then measuring and rewarding the wrong behaviours, such as average call times instead of spending adequate time resolving the customer’s issue first time.
• Understand the true drivers of satisfaction and dissatisfaction. Not all touchpoints are equal in the mind of customers.
• Beware volume or time-based activity metrics that can have an adverse effect on quality outcomes.
• Design flexibility into customer processes and empower your employees to deal with issues when they occur – avoid over-managing processes.
• Don’t overlook the emotional aspects of a great experience. As Maya Angelou wrote: “People will forget what you said, forget what you did, but never forget how you made them feel.” So you should hire attitudes. Develop skills.
• Design in opportunities for staff to be spontaneous when dealing with customers and foster authenticity.
There are no silver bullets with being customer centric. It’s tough to achieve and takes time, but the rewards are worth it; typically that incremental 12-18 per cent of profit. Getting it right requires strong discipline, commitment and ownership from across the organisation, not just one area. As organisations look towards growth again, now is the time to take a step back, carry out an assessment of how customer centric they are and really challenge themselves to avoid being left behind. The ones that do are often surprised by what they find, the opportunities for improvement it uncovers, and what it is worth to their bottom lines.
