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.
We are now one year on from the introduction of GDPR and we have seen little change other than being asked to approve the privacy terms of the sites we visit that use cookies. There have been a few companies who are being fined for not sufficiently protecting their customer data from hackers. This is serious stuff. Fines can go up to €20,000,000 or 4% of the total worldwide annual turnover of an organisation. This would mean that Facebook could end up paying $1.6 billion and British Airways £183 million. But in reality I don't think the fines, at least to start with, will be this high.
Shift your approach from myopic to broad-based (and forward thinking)
I applaud the emphasis on the importance of data freshness. We are all irritated by ads presented to us that are no longer relevant once we have made a purchase, aren't we?
I also encourage a forward-thinking, longer-term perspective. Change is happening so fast today that we need to prepare for things before they even happen! Difficult maybe, but essential for businesses to survive. For further ideas on how you can do this, read "How to Prepare Business for Anything. Five Actions You Can Take Now."
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.
We all get bored with novelty more quickly these days. What excites us one day, is normal the next and "passé" after that! Innovation is the life-blood of every successful business. Not renovation, innovation. If you don't know the difference, then you should read "How to Innovate Successfully (What You’re Still Getting Wrong!)."
The post includes the ten reasons your innovations are failing:
The process
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
Inappropriate distribution
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!
Being Collaborative
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!
Being Agile
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
In conclusion, I would like to give some of the many reasons why companies fail to adopt a customer first strategy. Last year I wrote a highly popular post explaining why many companies don't succeed, called "7 Reasons Most Companies Fail to Adopt a Customer-First Strategy."The post also appeared on CustomerThink and received many comments that are definitely worth reviewing too.
That is why I am not going to go into detail here, but just summarise the 7 reasons I gave:
1. The CEO has stated it as a company objective but has not detailed what and how the organisation will change
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.
Every industry strives to improve their customers’ experience with their products and services. Adopting a customer first strategy is therefore in many company objectives. 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. 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.
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 for hospitality! While I empathise, it’s not all bad news. This is because it also means that great service will also be more quickly seen 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). 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. 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.
#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 relationships. Whilst I agree with the importance of relationships, I believe that what we should be talking about is engagement. Be honest, other than the 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. Coca Cola and Red Bullare great examples of this. You should also check out another post entitles “Increasing Impact & Engagement through Advertising Testing.”
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, which for example the Rosewood Mayakoba resort in Mexico tries to attract.
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 are another. Check out the latter’s recent ad to understand better how they excel at understanding their guests: Art Series Overstay Checkout, or why not review the 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 will be surprised and delighted. This means that loyalty is much less long-term than in the past, and lifetime value is now measured in months or a few 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 a recent Edison Research, 20% expect a company to answer to their social media posts within 15 minutes, 42% within the hour! That means 24/7 monitoring 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 presentation 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 efforts. Check out our website for more information about our services and training courses, then contact us here.
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