Every CEO knows that a stronger customer focus can be the answer to many – dare I say most? – of their business challenges!
So why do so many companies continue to struggle in successfully adopting a customer-first strategy and culture?
Here are the seven main reasons why companies fail to effectively adopt a customer first strategy; which one are you struggling with the most today?
1. The CEO has stated it as a company objective but has not detailed what nor how the organisation will change
While it is essential that a customer-first strategy has a board-level sponsor, it is important that every employee understands their role in making it happen. It should not be treated as just another project for one department to complete, but as a long-term, top 3 company objective.
When this happens, every division is driven to identify how their actions will impact their customers and what part they will play in meeting this important company objective.
This is one area where the CEO can’t set it and forget it. He/she needs to be regularly informed of progress and should ask some “awkward” questions to ensure that everyone is truly embracing the objective. Without this company-wide support, the strategy will never succeed.
A few years ago, the Business Roundtable, which is an association of over 180 CEOs leading US companies, agreed to put people before profits. They specifically said they would be:
Delivering value to our customers.
Investing in our employees.
Dealing fairly and ethically with our suppliers.
Supporting the communities in which we work.
With many organisations now struggling to recover from the impact of covid-19, it is interesting to see whether they have all moved forward on these objectives.
The Business Roundtable updated their results one year later. In the summary you can read HERE they say:
One year later – through a period of unprecedented crises – companies have demonstrated a commitment to the values embedded in the Statement.
2. The organisation has not fully embraced the strategy
As mentioned above, everyone has a role to play in satisfying and delighting the customer. It is not the job of marketing, sales or market research alone to understand their needs. It is vital that each employee thinks customer first and ensures that every action and decision they make is customer centric.
One easy way to do this is to ask this question at the end of every meeting:
“what would our customers think of the decision we just made?”
If there is something they wouldn’t like or you know that you yourself wouldn’t approve of, then it needs to be reconsidered.
I would also suggest reading the recent post “7 Ways to Deliver Awesome Customer Service.” It includes seven recommendations so that everyone in an organisation can treat the customer with the respect and great service they deserve.
3. The project is treated just like any other
As with every well-defined objective, it is important that there is a responsible leader supported by a well-rounded and experienced team to lead the customer-first adoption. They will be responsible for ensuring that every department identifies and makes progress in the desired direction. They will also be able to adapt and adjust the plans as challenges arise in its execution.
However, unlike most other projects, adopting a customer first strategy will not have an end date! It should have a timeline to identify milestones, of course. But as the customer will continue to change, the actions needed will need constant adaptation. I like to say that “customer-centricity is a journey, not a destination.”
The initiative must have an executive sponsor and a passionate and charismatic leader, to excite and drive the whole organisation towards a more customer-centric approach to business.
Once the board has endorsed the initiative, the every-day leadership should be handled by someone who exemplifies customer-centricity and has a passion for customer delight.
In the most customer-centric organisations, this person is a CCO (Chief Customer Officer) or CXO (Chief Experience Officer) who sits on the executive board alongside the CEO, CFO and CMO.
According to this article in Forbes, the responsibilities of a CCO are to:
Bring The Customer To Life
Reach Outside The Organization
Involve The Front Lines
Embrace The Data
As you can see, these are actions that demand specific capabilities that complement rather than replace those of the heads of sales, marketing and PR. That is why a customer-first strategy needs a separate functional head. Trying to integrate these into the responsibilities of these other leaders is unlikely to meet with much success. Some of the best CCOs / CXOs come with a background in customer service or market research. This is because both professions prioritise the need to not only know but also understand the customer. Another Forbes article highlights some of the dangers of appointing a CCO or CXO. These include thinking that the job is then done, or that the person remains just a figurehead without any power to change company structure nor culture. It certainly makes interesting reading if you too are contemplating recruiting a customer representative and will help you to avoid many errors.
5. No-one understands how to move the initiative forward.
When you don’t know where you’re going, most people are afraid to take the first step. But that’s the only one you need to know. It’s easier to course-correct when you are moving than when you’re standing still. As already mentioned, customer centricity is a journey, not a destination.
That’s why many organisations now work with a business catalyst to help them take those all important first few steps. Once the project is up and running, occasional sessions are then sufficient to keep the internal excitement for the customer growing.
If you are nervous about “going it alone” then let’s discuss your first moves. Just contact me for an informal chat.
6. Everyone in the organisation is unclear about their role in satisfying and delighting the customer.
It is well-known that companies such as Amazon and Zappos have new employees enjoy direct contact with the customer from their very first days’ working in the company. However, this is something that should also be encouraged on an ongoing basis as well.
Ideally, every employee should get the chance to watch, listen and interact with customers regularly. The best organisations have such connections on every employee’s annual objectives, specifying such exchanges on a monthly basis as a minimum.
If you would like to start making regular contact with your customers in person, rather than through your care centers, then I would highly recommend you read “Five Rules of Customer Observation for Greater Success.”This article will help you to avoid the mistakes many make when observing the customer for the first time. It is also a useful reminder for those who have been connecting for a long time and may have some bad habits they need to correct.
7. They think it costs too much
While this may be the perception, in reality, it costs a lot more NOT to adopt a customer-first strategy. It makes both business sense AND customer sense.
There has been so much research done on the impact of adopting a customer- first strategy that there is no doubt that it provides a positive ROI (return on investment):
Walker found that 86% of buyers would pay more for a better experience.
Genesys showed that improving the experience for customers is the key to increasing retention, satisfaction and sales.
Bain & Companyresearch shows that increasing customer retention rates by 5% increases profits by between 25% and 95%.
These numbers should be sufficient to convince every CEO that a customer-first strategy is worth investing in. In fact, it is an essential strategy every CEO would be wise to adopt, no matter what industry they are in.So what are you or your CEO waiting for? Did I miss a different problem you are currently facing? What other challenges have you faced or are now facing in adopting a customer-first strategy? Please let me know by adding your comments below.
If you would like to know what support we can provide in helping you to adopt a customer first strategy, check out our website then contact us here:
Every business should strive to improve their customers’ experience with their products and services. Adopting a customer first strategy is therefore often mentioned as a company objective. Unfortunately, it rarely goes beyond the theory in most organisations, so I decided to help out with these six suggestions.
Hospitality is perhaps one of the most visible industries where customer satisfaction, or lack of, is quickly shared with the world. (Read my last post for more on this)
It is true that without satisfaction, customers will not return to a hotel or restaurant. And they will almost certainly share their (bad) experiences with anyone who will listen – including online!
Hospitality is also one of the industries that receives the most comments online, thanks to TripAdvisor and other booking sites. There is no hiding from their clients!
Now while I empathise, this is not all bad news. Because it means that great service will also be more quickly known about online. Therefore you can make changes and see the results almost immediately, or at least far quicker than in most other businesses.
However, despite this, I believe that the hospitality industry has a lot it can learn from consumer packaged goods (CPG) where improvements take the consumer longer to appreciate. In fact most other industries could benefit from taking a look at some of CPG’s best-in-class processes.
Both the hospitality and CPG industries have their customers at their heart; after all it’s in their name. They are both founded on pleasing and hopefully delighting their clientele in the quality of the products and services they offer.
However, as the world changes, customer demands do too and companies need to stay current if not ahead of these requirements, in order to ensure continued growth.
The 6 essentials of a customer first strategy
#1. From ROI / ROR to ROE
There has been a lot of talk recently on moving from a return on investment to a return on relationship metric. While I agree with the importance of relationships, I believe that what we should be talking about is engagement. Be honest, other than the author of the once popular book that started talking about brand love, who wants to have a relationship with a brand?!
Brands that have a high following and loyalty have found a way to consistently engage their fans and keep them coming back. They become involved and interested in the brand, the product, their website, even their communications.
While the hospitality industry is based on serving and satisfying its guests, in today’s connected world, it also needs to consider people who are currently strangers – but who could potentially become clients.
These might be the friends of current guests, who for example the Rosewood Mayakoba resort in Mexico tries to attract. Let me explain.
This wonderful hotel encourages its guests to photograph their experiences during their stay at the resort and then to share them with their friends on Facebook. This not only provides free publicity for the hotel, but also enables it to start engaging these potential clients, since they probably have similar lifestyles to their current guests.
User generated content (UGC) works well because customers trust each other a lot more than they do brands.Research from Forbes shows that 81% of consumers’ purchase decisions are influenced by their friends’ social media posts.
Having additional control in their lives today means that customers are re-evaluating what they are offered. They have higher expectations and are more discerning in their choices. They expect recognition at every touchpoint, even if in reality their peers influence their decisions more than does traditional marketing. This is important to keep in mind as you build your customer first strategy.
The internet enables people to compare offers, so they are less interested in bundled propositions, preferring to decide what is best value for them personally for each element. Several brands have understood this and now offer their customers the possibility to define their own, personal bundle of options. Liberty Mutual is one such example of this.
According to research by Walker, 86% of consumers would be willing to pay more for a better experience. So don’t get fixated on price; find ways to add value that consumers may appreciate far more than its actual cost to you.
Most CPG companies have targets for innovation and renovation; sometimes it can be as much as 30% or more of annual revenue. They also have mid-term innovation pipelines which can include partnerships in joint ventures with what were previously mere competitors. These have mutual benefits as each partner can concentrate on their individual skills, which enables each partner to then develop better new products and services.
Consider building partnerships and joint-ventures into your own customer first strategy. They will enable you to satisfy and delight your customers far more quickly than you could do when working alone.
For hospitality, innovation can no longer be purely physical or rational; we need to consider more emotional and relational ways to satisfy. The Rosewood Mayakoba resort, already mentioned above, is one good example of this. The Art Series Hotels were another, until they were bought by the Accor group. Check out one of the latter’s last campaigns to appreciate how they excelled at understanding their guests: Art Series Overstay Checkout. Sadly they have now become just another chain hotel, despite trying to communicate something different. I also recommend reviewing the amazing pictures posted on MayaKoba’s Facebook page?
One of the reasons that I believe we need to work on building engagement in all industries, and not just in hospitality, is because customer demands are constantly evolving. What satisfied them yesterday, can bore or even disappoint today.
To acquire and retain our customers, we need to be constantly upgrading our products and services, so that they remain surprised and delighted. This means that loyalty is much less long-term than in the past, and lifetime value is now measured in years rather than in decades.
Ensure you build loyalty actions into your customer first strategy, not just for attracting new customers. Remember it costs far more to get new customers than to keep and grow your current ones. So don’t ignore them by considering that they don’t need further efforts once won. Loyalty doesn’t last for ever!
#6. Dialogue and Exchange, Don’t Just Communicate
In today’s connected world, customers want a say in not only what they consume, but also where, when and how they are marketed to. They want a say in what they buy and expect a rapid resolution to any queries or complaints.
According to SuperOffice nearly half of all customers (46%) expect companies to respond to social media postings within 4 hours, while 12% expect a response within 15 minutes or less. This means that 24/7 monitoring is essential for all organisations if we are not to disappoint our most engaged customers.
These are just six of the many ideas I shared during a talk I gave to the faculty of a world- renowned hospitality school. If you are interested in seeing the full talk, I am happy to share it. Just email me with your details and what your biggest business challenge is currently in adopting a customer first strategy.
Are you struggling to improve your own customer centricity? Whatever people-facing industry you are in, we would welcome the chance to catalyse your growth. Check out our website for more information about our services and training programs, then contact us here.
In most countries, the population have a love / hate relationship with their police. You can imagine my surprise, therefore, to find myself writing about how they appear to be adopting a customer first strategy in Switzerland!
Let me explain. A few years ago they introduced a new-style speed radars in the villages around my home town. The elements are not that new per se, I know, but last week it suddenly hit me why these speed cameras seem to be so effective. It’s simple; they’re customer centric! The Swiss police have adopted a customer first strategy! And that’s why I want to share more about this story here.
One of the reasons why the Police are disliked in many (dare I say most?) countries, is because of their insidious speed controls.
Whether they are permanent fixtures as on the right, or temporary ones, we all dislike the flash that tells us it’s too late, that we’ve been “caught.”
We then wait a few days, to weeks or even months, naively hoping that it wasn’t our car that was flashed. But eventually the letter arrives asking us to pay a fine.
I think the worst of them all are the laser guns that the Police have been using for many years now. We don’t even know we’ve been flashed until the communication arrives at our home! Or we are pulled up a few hundred meters down the road.
The relatively new types of radar that are being introduced in my home area don’t flash either. But that’s because we never get “caught” as such.
You see they measure our speed and give us immediate feedback. Take a look at the photo on the right; I’m sure you’ve seen such installations before in your own area.
Now if we make the assumption that all four types of equipment are to get road users to decrease their speed in critical areas – and not just to gather money as I’ve heard suggested – then the results must vary widely.
So let me share my thoughts from the perspective of a customer first strategy champion.
Everyone quickly knows where these are located. In fact, in some countries there are warning signs and they are actually highlighted on the GPS mapping system you may have in your car.
In some places, the permanent radars are not always functioning, as the cameras inside them are rotated between installations. It is therefore not possible to know which radars are active and which aren’t. The Police then get a multiple deterrent effect, beyond the number of cameras they have actually installed.
A driver’s behaviour when passing this type of installation, tends to be the following. The traffic is rolling along “normally” and probably over the speed limit. Then everyone brakes hard just in time to pass the radar below the maximum speed allowed. They then speed up again to continue along the road at their previous faster pace.
This phenomenon is in fact well known by the Police. In fact, they sometimes add a second, mobile radar a few hundred meters down from the permanent one, to catch those who are once again speeding!
Even the warning signs, as on the left, don’t have much impact on drivers and the speed limitation is quickly forgotten.
Whether they get caught with the first or second radar, the impact on the end customer, the driver, will be the same.
They feel angry and frustrated, which makes them less attentive, and may result in them driving more erratically. They may even speed up feeling that now they have been caught, there is nothing more to lose!
Not good for the driver nor the Police’s objective of maintaining a slower, safer speed in the vicinity. Clearly not a part of a customer first strategy!
In Switzerland they did try painting the cameras to make them stand out in a fun way. The Emmental cheese on the right used to be close to Geneva airport, but I have seen giraffes and other designs here too. Of course I have also seen other radars that have been painted, but these were done by angry motorists!
Temporary radars have a similar function to the permanent ones, but it usually takes a day or two for drivers to become aware of their location. Their reactions will then be similar to the permanent radars, with the slowing down before and the speeding up after the radar has been passed.
This is not good for traffic fluidity, nor for slowing it down. And the drivers’ reactions if flashed will be just the same as with the permanent installations. Again, not good for making the roads safer by slowing down the traffic, and clearly not a demonstration of a customer first strategy.
Laser speed guns
These are probably the most hated form of speed control by drivers. They have no knowledge of where they are, nor even that they have been flashed. It could be argued that they are therefore not a deterrent to speeding, but a pure money-making exercise for the Police.
I admit that the Police do tend to stand in certain places where speeding is a common occurrence. Knowledgeable, local drivers look out for them when approaching the areas and adapt their speed accordingly.
But overall they are not really a device to deter speeding and therefore the associated sentiments are very negative.
Once again this type of radar would not be used if the Police have adopted a customer first strategy.
The speed radar that prompted this post measures your speed but then immediately gives you feedback. You are rewarded with a happy green smiley if you are within the speed limit. Or a red frown with a message to slow down if you are speeding.
I have witnessed people approaching these devices and slowing down whether or not they are speeding. And they don’t speed up after they have passed them either. How’s that for having a positive influence on behaviour?
Also, if the drivers are like me, they also get a feel-good feeling for being congratulated for not speeding. I find these by far the most efficient at controlling traffic speed and fluidity, but of course the Police don’t get any money.
What This Has to Do with Your business
So why is this example relevant for you and your own customer first strategy? Well, ask yourself what you really want for your business?
In the case of the police, I am assuming that they want to reduce the speed of drivers in certain areas and make the roads safer for everyone. In this case, the customer-centric approach, which has by far the most success at slowing drivers down to within the speed limit along a larger portion of the road, is the information panel. If that is their objective, then the Police in every country should adopt these new style radars.
But if those who consider speed checks to be a mere money-making operation are right, then the Police will continue to use one of their other options. And they must accept the negative consequences on so many levels, not just on their image or speeding in their localities.
So, take a hard look at your own business actions and ask yourself what you really want for your business? If you are sincerely customer centric, you will stop any practices that you know your customers wouldn’t like.
Half filled packaging – gone. False claims and promises – deleted. Getting credit card details for free trials in the hope customers will forget to cancel and you can automatically charge them for a service that haven’t specifically requested. Not any longer! These all might get you that first sale but you won’t get you happy and loyal customers who become advocates for your brand.
If you don’t want to cheat your customers – and who would as it is not a viable long-term business model? – then you must objectively evaluate your current practices. Ask yourself what you want your customers to think and feel about your brand. What are the objectives you have for your business and your customers? What changes in your customers’ attitude or behaviour are you looking to encourage? How does your brand provide a solution to your customers?
These questions are just a small selection that we use in our highly successful 7-step insight development process that is called CATSIGHT™.
If you’d like to know more about it, or get trained in insight-development and adopting a customer first strategy, then check out our new courses in the C3Centricity Academy. You could learn how to develop actionable business insights in under two hours!
Why would you want to quickly adopt a customer first strategy?
Well, every few days there seems to be another customer service disaster that fills the newspapers and goes viral on social media. Amongst the most notable recent examples include United’s Flight 3411 incident disembarking passengers by force and Walmart refusing to match their online prices in-store. These types of incidents almost only ever happen when an organisation doesn’t adopt a customer first strategy, so the solution is relatively easy.
Every single organisation, big or small, recognises the importance of their customers today. They talk about customer centricity but very few actually go beyond voicing their opinions. Perhaps yours is one of these? Do you know why this is? What’s stopping you from taking the necessary actions?
A customer first strategy is not that difficult to implement. Just think customer first in everything you do! So how come most businesses get it spectacularly wrong?
I think one reason, and probably the most common, is because they don’t see an immediate return on their investment. You see, it costs money to make changes in internal processes and procedures.
Another possible reason is because some organisations have hesitated to start for so long, they now feel that they have been left so far behind that they don’t know where to start. What do you think?
The good news is that if you’re in one of these situations, then help is at hand. Read on because this article shares some of the most useful tips I’ve seen on the topic of adopting a customer first strategy.
There has been enough research done to prove that the return on a customer-first strategy is significant. Here are just a few of the most noteworthy numbers I found during my research online; if you are still not sure it’s worth it, then this data will no doubt convince you.
86% of buyers will pay more for a better customer experience. But only 1% of customers feel that vendors consistently meet their expectations. (Source: CEI Survey)
74% of consumers have spent more due to good customer service (Source: Entechus.com)
89% of consumers have stopped doing business with a company after experiencing poor customer service. (Source: RightNow Customer Experience Impact Report)
49% of consumers have left a brand in the past year due to poor customer experience. (Source: Emplifi)
Companies earning $1 billion+ can expect to earn an additional $700 million within 3 years of investing in CEX. (Temkin Group now Qualtrics)
A 10% increase in customer retention levels result in a 30% increase in the value of the company. (Source: Bain & Co)
Those are numbers that would make any CEO sit up and take notice! But will it make them act? What’s holding yours back from investing in your customers rather than (just) in developing and marketing the products and services you offer?
I believe that those numbers can no longer be ignored. It’s time every CEO started to adopt a customer first strategy. NO more excuses! This has to be (one of) your organisation’s top priorities!
With so much information available today, marketing is being challenged to demonstrate its ROI. This might explain why marketers are still putting their efforts into brand building, sometimes to the detriment of their customers, consumers and clients.
However, an analysis by IBMon some research carried out in the UK by the Callcredit Information Group gives a different reason. They found that the majority of marketers are feeling overwhelmed by all this data. Their explanation for this is that
“only 29% of marketers believe they have the necessary skills to analyse data, with 44% planning on investing in further training over the next two years to boost confidence within their organisations around the handling of information.”
According to a Forrester report, 44% of B2C marketers are using big data and analytics to improve responsiveness to customer interactions. But of equal importance in terms of top two mentions, is the desire to generate insights. ( Source)
It surprises me that despite the constant flow of data into companies they still lack insights into their customers. As I’m often quoted as saying:
“We’re drowning in data but thirsting for insights.”
Marketing is clearly so busy using data to manage such things as pricing, distribution and communication, that they are forgetting that they could be using the information to get to know their customers better. This conclusion is confirmed by a Forbes article which mentions that marketing is using big data to provide answers to
“which content is the most effective, how to increase conversion rates and customer lifetime value.”
It would be good if they (also) used it to increase customer satisfaction and loyalty, no?
Big data has actually done customer understanding a disfavour, since organisations continue to increase their advertising budgets far faster than that for market research.
According to the latest numbersthe global market research industry is expected to grow 8.1% in 2022, from $76.42 billion in 2021 to $82.62 billion. This growth is mainly due to companies rearranging their operations and recovering from the impact of covid, since previous year’s growth had been significantly lower around the 2-3% level.
However, organisations continue to grow the advertising budgets faster. Ad spend rose by a whopping 11.2% in 2021, although as you can see in the graph below, traditional advertising fell by 15.7% as companies transfer the lion’s share of their budgets to digital.
But there is some hope. A recent report on the KPIs used by marketing showed that Marketers are using a variety of metrics to measure the impact of their brand marketing activities. (OnBrand Magazine study) In surveying more than 560 global brand managers and CMOs, the analysis concludes that new customer acquisition (75%) and social media engagement (72%) are the two primary ways they use to determine the success of their brand marketing efforts.
However, there is still a lot of room for improvement. A 2016 Spencer Stuart Survey showed data analysis and insights are one of the three main areas where CMOs need the most development as a leader. Unfortunately, they are also the skills which more than a half of them say are most difficult to find when building a team!
So if CMOs can’t develop insight about their customers, shouldn’t market research be more not less important to them? After all, it’s the one profession that spends its whole time trying to understand the market and customers. So what’s going wrong?
MARKET RESEARCH IS SEEN AS A COST, NOT AN INVESTMENT
Companies still need market research to understand their customers. Yes, there is a wealth of information flooding into organisations with the IoT, but those numbers don’t tell you their “why.” That’s where market research comes into its own. It needs to provide more “why” answers and not just the mere statistics they still seem comfortable dropping on the laps of executives and marketers alike.
I believe that (a large?) part of the issue is also the researchers themselves. They’re not sociable, speak a language others don’t understand and seem afraid to voice their own opinion in meetings, let alone make recommendations.
This was confirmed in The Vermeer Millward Brown Insights 2020 research. It clearly showed the advantages of a senior market research position at board level. But to get there, most researchers need new skills. The critical capabilities which were said to highlight the biggest differences between leaders and laggards were in business acumen, creative solution thinking, storytelling and direction setting.
It seems a real pity to me that the very people who should benefit from the explosion in data availability are not profiting from it. As if their skills that are so highly valued today are not enough, there is also a real opportunity for them to lead the customer first strategy adoption in many organisations.
CUSTOMER SERVICES ARE SEEN AS COMPLAINT HANDLERS
When I was first hired to head up the global consumer excellence division for Nestle, I found a group of siloed departments which rarely shared information. Even worse, the customer care centre was seen as mere complaint handlers. Their image was of a group of women who spent their days on the phone talking to other women!
I don’t think Nestle were the only ones who had this negative image at that time. I still find similar perceptions in many organisations which thankfully become my clients through a desire to make changes.
You only have to take a look at companies that excel at customer care to realise the business benefits of putting the customer first: Amazon, Southwest, Zappos to name but a few. And research consistently proves the benefit of such a strategy to a company’s bottom line.
“According to Forrester, 72% of businesses say that improving the customer experience is their top priority. A study from NewVoiceMedia indicates that companies lose more than $62 billion due to poor customer service. No company can afford to be a customer service laggard.”
The Forrester report from which Shep drew these quotes was from an ongoing analysis that has been run each year since 2010. Although it is a couple of years old now, the conclusions are still just as valid. The key findings from the 2016 report showed:
In all five sectors they covered, companies with higher customer experience (CX) scores outperformed their rivals in revenue growth
CX leaders showed an annual growth rate of 17% compared to just 3% for the others.
The cable and retail industries beat the field in CX by 24% and 26%, which is a huge boost to the bottom line.
Even in the sector with the smallest range (airlines), there was a 5% difference between companies.
This also translated into subscriber growth – in the cable industry leaders grew internet subscribers by 23.9% more than others and video subscribers by 13.9%
Along with the previously mentioned statistics, I can see no reason for a company not to invest in a customer-first strategy. If you can think of any yourself, then I’d love to hear them in the comments below.
So to answer the title of this article, a customer first strategy needs an organisation to recenter itself behind this as a company-wide objective. It can make a real difference in terms of both sales and profits to those who follow this direction. But it is essential to have executive support and true commitment from every employee to think customer first.
It will take skill upgrades for both marketing and market research departments to translate the data and information gathered into actionable insights. And it will mean every employee having the chance to get up close and personal with customers on a regular basis. This is the only way for them to understand the role they play in satisfying and delighting them.
Are you ready to adopt a customer-first strategy? If so, then it’s time to identify the priority changes you should make by answering our proprietary C3C Evaluator tool. Complete it now and then book a free half-hour strategy session so we can go through the results together.
This post is based upon and is an updated version of one first published on C3Centricity in 2016.
As a customer-first strategist (just like you I hope), I spend a lot of my time searching how to better measure customer centricity for my clients. I also do a lot of analyses on what customers really want today. I’m always trying to understand the exact solutions customers need, desire and dream of having.
My regular searches include customer service, customer satisfaction, customer care and similar topic areas. Google is my best friend! However, I recently came across some surprising facts, which prompted this post. I believe they show a serious problem in the business of looking after our customers today. Read the article and then let me know whether or not you agree with my analysis.
Wikipedia, another online friend of mine, doesn’t have a definition of customer centricity! If you look up the term, you get redirected to customer satisfaction! Try itfor yourself and see.
“Creating a positive consumer experience at the point of sale and post-sale.”
It then goes on to say
“A customer-centric approach can add value to a company by enabling it to differentiate itself from competitors who do not offer the same experience.”
Now although I find the definition limited, since it refers only to sales and post-sale activities, I do like the fact that it mentions three important elements of customer centricity:
A positive customer experience
Adds value to a company
This clearly identifies three huge benefits of becoming (more) customer centric:
1. A positive customer experience has been shown to increase both loyalty and advocacy. As we all know, it costs five times more to acquire a new customer, as it does to keep a current one. Therefore loyalty is an incredibly valuable benefit for a brand.
According to recent research by Bain & Company, along with Earl Sasser of the Harvard Business School increasing customer retention by just 5% can increase profits by between 25% and 95%. OK a very wide range, but I’m sure we’d all be happy with even a 25% increase in profits, wouldn’t we?
One further piece of research, this time from Marketing Metrics, shows that the probability of selling to an existing customer is 60 – 70%, whereas the probability of selling to a new prospect is less than 20%.
Clearly placing more attention on keeping our current customers satisfied brings greater rewards than going after new ones. And yet that is what most companies set as a priority. Any ideas why?
2. Adding value to a company also increases the ROI of its marketing investments. This is something that marketing is constantly challenged to prove these days. With the risk of seeing their budgets cut if they are unable to provide convincing arguments to their bosses.
3. Enabling differentiation in this complex world is invaluable in standing out from the competition. In so many industries, product performance and services are almost identical. So how can you be seen as different – and thus also more valuable to customers?
By the care you give your customers and the added value of your customer service, that’s how. And knowing what your customers really want, need or ideally dream of.
It has been shown that most customers are willing to pay more for excellent customer service. You can read a summary of this and more in the summary report of the American Express research.
THE IMPORTANCE OF CUSTOMER SATISFACTION AND UNDERSTANDING
There is no denying that customer-centricity is important. However some companies are (too?) slow to adopt best practices in this area, which concerns me for a number of reasons:
It is now proven that it is important for the business, so what is stopping companies from quickly adopting a more customer centric approach? The longer they wait, the more they risk being beaten by a more customer-friendly competitor. It’s no longer (just) about product performance.
Customers are complaining – a lot – about the way they are being treated. Why are companies not accepting these criticisms as the gifts they are? Acting promptly before the issue becomes a social media viral discussion is essential today.
Customer service is confused with customer satisfaction. Companies are happy when their customers say they are satisfied, but they should be looking not just to satisfy them but to delight them too!
As mentioned before, the research that prompted this post was a google keyword investigation of terms related to customers. Having seen the strong positive trend for the word customer, I then wanted to understand what it was about customers that was of interest. I found that both customer service and customer care showed almost identical positive trends.
However, when I looked at customer satisfaction and customer understanding the trends were flat and worse, minimal. (You can see the trend graph below with service in green, care in blue, satisfaction in red and understanding in yellow)
These trends suggest to me that companies search how to improve their customer service and care, but not about how to understand their customers or increase their satisfaction!
How can this be? Surely an interest in customer service should come from an increased understanding of how to deliver customer satisfaction? Apparently not.
And this is when I realised that perhaps businesses are more interested in the process than the real benefit of customer centricity. That is a serious flaw in their thinking in my opinion. What do you think?
To confirm my hypothesis, I looked into customer satisfaction levels and their trends. After all, many more companies are interested in customer service these days. So you would think it should have a positive impact on customer satisfaction.
According to the latest report from The Institute of Customer Service on customer satisfaction across Europe, retail, insurance and banking are the three best performing industries.
This was a surprise to me because they used to be the most heavily criticised. However this suggests that they have taken action, albeit because they had little choice, and that most other industries continue to ignore what their customers really want. You can see the Infographic overview above; click on it to see the full-sized original.
I then went back to Google to find ways which were suggested for increasing customer satisfaction. I found more than two million articles on how to do it, but very few on the results. Again, extremely worrying.
According to the US ACSI (American Customer Satisfaction Index) Q4 2020 report, customer satisfaction continues its decline started back in 2018. It is now at its lowest level since 2005, exacerbated of course by the covid pandemic.
The UK is showing a similar negative trend. The January 2021 UKCSI is 76.8 (out of 100), 0.1 points lower than January 2020 and the lowest level since July 2015.
No doubt influenced by the covide pandemic, customer satisfaction with the Public Services (National) sector has risen by 1.5 points, whereas that of Banks & Building Societies, Tourism and Transport have all fallen by at least 1 point compared to January 2020.
THE KEY TAKEAWAYS
So what does a business need to do to deliver what their customers really want today and increase their level of satisfaction? There are seven facts that become apparent from this analysis:
Businesses should always provide a positive customer experience and do whatever it takes to satisfy, but ideally delight them.
Companies must go beyond the mere process of customer-centricity, to truly put their customers at the heart of their organisation.
Customer centricity adds demonstrated value to a company; it should be a no-brainer to become a top business objective.
Customer centric improvements are happening too slowly in most industries, especially when customers are becoming increasingly demanding.
Providing customer service doesn’t guarantee customer satisfaction.
A positive customer experience increases loyalty and advocacy.
Excellent customer service enables differentiation and even higher prices.
In summary, people want businesses to listen and understand them. When a customer takes the time to contact a company because they are unhappy, they expect a satisfactory outcome as a minimum. Those organisations who go beyond, to deliver delight, will see their reputation improve, as well as an increase in their customers’ loyalty and advocacy.
Customers also want companies to be open and transparent. They want answers to their questions and immediate responses to their criticisms. They have a right to know the source of ingredients, the ingredients themselves, their country of origin, the charities the company supports, or the organisation’s policies on waste, water and sustainability.
What customers really want today is to have their questions answered (almost) immediately, especially on social media. They expect things that go wrong to be put right – quickly, with an equally rapid explanation and apology.
So how are you doing? Are you living up to your customers’ expectations? Are you delivering what your customers really want? How have you made progress in this area in the past year or so? Please share your success stories below.
You can no longer wait! You’re getting left behind by your competitors who are taking action today! If you need help in catalysing your organisation in adopting a customer-first strategy and aligning your business to what your customers really want, then you need see the free content from the latest course from C3Centricity:
Everyone is talking about customer first strategies and why they are important. However walking the talk is a different matter!
An interesting article on NewMR by Ray Poynter prompted this post. He spoke about the differences between customer focus and customer centricity and the often times confusion between the two terms. That is why I tend to speak about customer first rather than customer centricity these days.
In its simplest form a customer first strategy is about thinking customer first in everything you do. Yes I know it sounds easy, but it really isn’t. And it doesn’t come naturally, at least to start with. I believe that’s because it involves a culture change to move the organisation in this direction. But I can assure you it’s worth it; its value is now well proven.
If you would like to see some exciting statistics about the value of making your customers the heart of your business, then CMO.com has a great article. It’s called “15 Mind-Blowing Stats About Customer Centricity” and many of the research results reported are still valid today, so it’s definitely worth a read.
What Are Not Customer First Strategies
I have seen a customer first strategy defined as
“a strategy by which businesses create their products, content, and marketing campaigns so that they serve their customers first, and their organization second.”
I don’t agree! If you don’t think about your organisation then it will likely fail! That said, I am also a little sensitive to the comments of Sir Richard Branson, who says
“Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”
This may be true for an airline, where the client is primarily basing their opinion on the service on board and the “niceness” of the crew. After all, every airline will get you from A to B.
However for many industries, customers are enjoying (or not!) your product or service without your employees being present. They will remain loyal (or not!) to your brand, based upon their own personal experiences, at least in most cases.
A customer first strategy is therefore not about only thinking about the customer. It is about understanding how best to serve them in such a way as to delight them, while keeping your employees and shareholders happy. This is relatively easy to do because when the business is going well, all stakeholders are happy.
What Customer First Strategies Are
Econsultancy asked what effective leadership in the digital age is. Several key leadership qualities were found, including being ruthlessly customer-centric, data-driven, innovative, collaborative and agile. I am thrilled to see customer centricity coming first by a long margin.
So the leaders have got the message, but what are they doing about it? Not a lot in many cases. And why? From my experience it is because they just don’t know where to start or what to do. (If that’s your situation, try our Customer Centricity Mini C3C Evaluator™ – for free! It will immediately show you your biggest opportunities.)
Executing a customer first strategy doesn’t happen without a clear understanding of what needs to change. This is why I decided to take the four other qualities mentioned and see how they influence the adoption of such a culture within an organisation.
Being Data Driven
We are all aware that when we visit a website, buy something online, or post on social media, we are being tracked. Information is being gathered about us and our actions which can then be used to follow our behaviours, show relevant advertisements or even communicate directly with us.
But automated data gathering doesn’t only happen online. Many organisations store our information when we contact their customer service center, enter a promotion, sign up for a club or gift card, or apply for free samples.
While the GDPR in Europe has increased the security of this data and our permission for companies to use it, data driven marketing is not all bad news.
OK, so I’m not talking about the 2002 Minority Report. I’m not speaking about how the hero is bombarded with advertising messages in the street and in the shopping mall, as the clip below shows.
No. While it is unlikely that we would appreciate such invasive messaging, people rarely complain about the suggestions proposed of further articles to purchase when they visit Amazon and similar online stores. This is because they provide a real service and we therefore happily give our details to these websites.
Data driven marketing and communications will need to carefully balance the support they provide to customers, with respect for their desire for privacy at certain times. The companies that succeed will be those that understand this and connect at the right times. Those that don’t, risk being banned from all future contact.
But good as the above list is, it needs a fourth resolution in my opinion; that of using the collected data for the benefit of the customer. As the data comes from them I believe all organisations have a duty to use it to return our customers’ trust in us when they shared it. Do you agree? Let me know in the comments below.
The post includes the ten reasons your innovations are failing:
Meeting company quotas
Lack of customer understanding
Lack of category understanding
Not living up to your promises
Not being sufficiently differentiated
Being too different
Pricing yourself out of the market
Being too far ahead of the customer:
If you think that any of these reasons applies to your own organisation, then you must read this post. It contains answers to solve each of the issues. Invaluable!
Despite moves to flat organisational structures, open-offices and social areas in work today, silos seem to be as strong as ever! And yet silos cost businesses a fortune in wasted effort and investments. Suppliers are unlikely to tell you when you have already bought a report. I found this was the case for one of my clients, that had bought the same report an amazing 26 times! They wasted millions just because their organisation was siloed.
Departments hold onto information they have gathered like treasure and consider it to be for their personal advantage only. This results in multiple projects being run on the same topic, sometimes even in parallel! I found three similar projects being run by an FMCG client, that the department that hired me was unaware of. By working collaboratively, they were able to have more resources, both in terms of budget and personnel! You can imagine what that did to the completion of all the projects. They were finished in record time and well under budget! One more happy customer!
If you’re not sure your information resources are being used effectively and efficiently, then we should talk.
Collaboration is the only way to decrease this waste and hopefully marketing automation and open data storage will help resolve at least a large part of it. However I have found in working with clients that it is the culture change that makes the biggest impact. After all, what is an employee’s benefit in working with and helping other departments? The executive board must encourage collaboration and be seen to walk their talk, for the whole company to follow.
Have you ever heard the phrase “it’s not in my objectives” when asking for support? If so, then why not suggest that collaboration be included in everyone’s objectives? Change will happen – fast!
Following on from the need for innovation, today’s businesses must be agile and flexible. With technology changing the way we live our lives, companies must be both ready for change and prepared to benefit when there is something relevant happening.
Some of the best examples of Agile Marketing:
Being agile can take many forms. The examples below show that it can be online, offline, or outdoor. Brands that are agile are where their customers are; that’s what matters.
Tweets when the lights went out at the SuperBowl in 2013:
Unofficial ads during the 2012 London Olympics:
The ongoing struggles between major brands:
Audi vs BMW
Coke vs Pepsi
(Thanks to CAVE House for this great video collection)
Of course these examples could only be developed because the brand owners were ready to take advantage of what was happening in their customers’ lives. They therefore had to know them deeply in order for their communications to be relevant and resonate with them.
Reasons Companies Fail their Customer First Strategy Adoption
6. Everyone in the organisation is not clear about their role in satisfying and delighting the customer.
7. They think it costs too much
Which of these seven reasons is (are) the main reason(s) for your slow move to a customer-first strategy adoption? Is it something different? Let me know in the comments; I’m sure every reader would love to exchange their own experiences with you.
If you would like to know which area of a customer first strategy offers you the most opportunities for improvement, why not complete our mini C3C Evaluator™ tool? It’s FREE! And in just 12 questions you will get a clear indication of what to prioritise. Then let’s talk.
A New Year tradition we started here at C3Centricity back in 2011, is to share our most popular brand building strategies and posts of the year. This gives everyone a chance to catch up on our best posts that they may have missed.
This year has been a particularly successful year for C3Centricity, with many of our newest post getting the top scores globally. This is quite tough for a blog that has been running for almost eight years and highlights the quality of the content we share with you! So have a look at our list and see if your own favourites are there. If not, then please let us know in the comments. Thanks.
This post shares the highlights of recent research into how market research departments can become true business partners, rather than being viewed as a mere cost center. It also shares ten steps to reinventing and upgrading your market research department. If you believe that you could be getting better support on your customer understanding and insight development, then these ten ideas will take you a long way to doing this in 2019.
Many CMOs are frustrated by their lack of recognition by their fellow c-suite colleagues. If this is your case, or you are new to the position and want to make an impact quickly, then this is a must-read post. It shares the most collon opportunities and challenges you may face and suggests five areas to (re)visit which will provide a new and fresh perspective on their business.
These are the most shared marketing infographics of 2017. As usual, for each one we have added an action for you to take based upon the topic covered.
What was new for last year is that many marketing infographics that were shared were actually about content marketing. It’s as if “true/traditional” marketing doesn’t exist any more! That in itself says a lot about the focus of marketers these days! Are they right to do so? I don’t think so, but let me know your opinion.
In its simplest form a customer first strategy is about thinking customer first in everything you do. Yes I know it sounds easy but it really isn’t. It doesn’t come naturally, at least to start with. And it involves a culture change to move the organisation in this direction. But I can assure you it’s worth it; its value is now well proven.
This post lays out the importance of being data driven, innovative, collaborative and agile to succeed a customer first strategy. It also shares the seven reasons most companies fail.
This post shares the three lessons learnt from a personal (bad) experience with a hotel chain and its “guaranteed lowest price” promise. These are: 1. The customer journey needs to integrate all possible contact points. If it doesn’t you could alienate your customers before they make a purchase. 2. If you mess up admit it and correct the situation. People understand that mistakes get made. While they may forgive you if you quickly put it right, they will never trust you again if you pretend nothing is wrong. 3. Follow up to make sure the customer is happy. In the heat of the moment a customer may feel satisfied that something was done. However in the cold light of the next day, week or month they might feel that what you did was not enough.
In working with clients around the world and in numerous industries, I have found that many are lost by the wealth of information that is available to them. In fact it seems to drown out their reasoning of what to do and they remain frozen in indecision.
If this is your situation, just follow the detailed steps of this post and you will soon be doubling, quadrupling, if not 10x the ROI of your data!
Your brand is not what you think it is! It is what your customers think it is; its brand image, personality and its value to them.
If you’re having issues with your own brand in either of these areas, then you’ll find this article both interesting and valuable. It covers why we buy brands, the different elements of a brand, the three types of attributes you should be measuring for your brand. It then goes on to review brand personality and the main archetypes with some great examples.
This article has been amongst the top twenty posts every year ever since it was first published back in 2013, a staggering five years ago! If you haven’t read it yet, then you really have been missing out on some surprising facts about insight development. Perhaps one of them is the reason that you are still struggling to develop valid and actionable insights? Check it out and see what you have missed all these years.
We all know how extremely demanding consumers have become. Constant innovation and novelty has made us all more impatient and critical. We want things better, faster and sometimes cheaper as well. And customer satisfaction is becoming insufficient to drive growth alone. Marketing must deliver more!
This article shares three examples that provide a clear roadmap for anyone wanting to move their customer service and engagement to the next level, by offering more than mere customer satisfaction.
All brands and services need to choose a group of customers that they are going to satisfy, since it is impossible to satisfy everyone most of the time. This means that you need to make a choice and agree to ignore some of the category users you could appeal to, in order to totally satisfy your target customer.
Although this may sound counter-intuitive, segmentation is the only way to ensure you have the best possible chance to satisfy the needs of your targeted customers.
When I look back at these top ten posts I am proud that most of them are from 2018. After almost eight years, it seems that what I am writing today is more in line with marketers’ needs than previous posts which have been around for much longer.
There are a few exceptions to this, my evergreen content on topics that will always appeal to marketers young and old. This year, as in the past, they are on the topics of Brand image, equity and personality, Insight development and Principles of segmentation. I think this makes a lot of sense as they are fundamental skills that every marketer needs, even in this digital age.
Now my question to you dear reader, is what topics you want me to cover in 2019? If you have reached the end of this post then you must be a keen supporter, so I will offer a free e-book to everyone who completes our short survey in January 2019. Just click on the button and you will be taken directly to the survey. Once completed you will receive an email with a link to download the ebook “Secrets to Brand Building” for free – it’s normally US$ 4.95!