- What Is Customer- Centricity?
- Why Is Organisational Culture Important?
- Establishing A Customer-Centric Culture
- You Have A Framework, Now What?
Customer service as a key differentiator is not a new concept. It has long been known that understanding, supporting and responding to your customers in the right way, at the right time is key to customer acquisition and retention. The financial benefit of this is clear, as good customers will not only return to utilise your products and services again and again but will bring along with them colleagues, friends and family, thereby organically growing your customer base and revenue without additional advertising spend.
Research conducted by SurveyMonkey indicates that the simple act of measuring customer satisfaction and obtaining feedback improves customer retention and revenue growth, with companies who measure their Net Promoter ® scores (NPS) being a third more likely to have growth rates over 10% a year. Additionally, research by Bain & Company indicates that a customer is four times more likely to buy from one of your competitors if their problem is service related, as opposed to price or product related. In this age of information and globalisation, keeping customers satisfied is an increasingly difficult task. Consumers have access to a wide selection of products and services, as well as an abundance of both fact and opinion-based information available at their fingertips. At the same time, customer service teams are stretched to capacity managing multiple time zones and geographies, numerous customer contact points (i.e. face-to-face, telephone, email and instant messenger), and increasingly complex product and service information. As the line between fact and fiction is often blurred, it is more important than ever before to ensure that consumers are not only confident in your brand, but also speak positively about your organisation to others, either in person or online.
What is customer-centricity?
Customer-centricity involves ensuring that customer satisfaction is a priority in every decision that your business makes. When your organisation is customer-centric, every thought, decision, action and process begins and ends with the customer in mind, regardless of whether you are in a customer-facing role or a back-office function. Companies such as Google take this approach very seriously as outlined in their customer commitment (see below). Google has taken it upon themselves to ensure that their service is as user-friendly as possible, addressing issues for which they are not directly responsible (e.g. spelling and dialect), for which they have since become ‘famous’.
Why is organisational culture important?
No matter how clearly you define your vision or how many processes are in place, the people who work for you won’t consistently make the right decisions unless you have a culture that reinforces the strategy. Successful businesses understand that focusing on culture is a key point of difference, and a way to cement competitive advantage in achieving their vision and strategic goals. In fact, a survey conducted by Strategy& in 2013 indicated that 60% of leaders believe that culture is more important than the strategy or the operating model to enable long term success. This seemingly runs against the grain of many traditional business practices, where there is a strong reliance on economics as the foundation for policy and procedure. However, a strong organisational culture makes good business sense, as aligned values and ingrained behaviour empower employees, and free up leaders, by requiring fewer rules and time spent monitoring and managing. This is the result of employees having the right tools and mindset to make the right decisions for the situations that present themselves each day, using personal judgement and intuition to positively support the agreed cultural standards. At the heart of the issue are the judgements people make, and the actions that stem from those judgements. These decisions can be viewed as part of a continuum, with basic customer service at one end of the spectrum and providing true customer centricity at the other. Lastly, and perhaps most importantly, culture is critical to success because it is in a culture that the ideas of the future are formulated and brought to life. Strengthening the capacity of employees to make future-oriented decisions will lay the foundation for pre-empting customer needs, and designing new and innovative solutions before your customers even realise that they need them.
Establishing a customer-centric culture
Culture cannot simply be defined through corporate mission statements or staff communications. The cultural design focuses on understanding the alignment across the core organisational levers driving culture, as well as identifying any misalignment or potential ‘watchpoints’ to ensure that you have consistent practices that reinforce the desired behaviour. There are also many implicit ‘messages’ that act as indicators of the culture within an organisation. As such, it is imperative that you align the beliefs, skills and environment for employees to consistently reinforce the explicit and implicit messages about what is required. Organisational culture is an intangible entity. As such, it is important to identify observable behaviours that indicate your organisation’s culture, as well as its alignment to your customer strategy and objectives. The model outlined below provides a framework for understanding the levers that will allow you to design your desired customer-centric culture, as well as understand the current culture state in order to determine the gap to be closed between the ‘as is’ and ‘to be’.
- Strategy: Requires the organisation to not only clearly articulate their customer strategy but also to ensure that employees understand this strategy, as well as how their individual objectives link to both their immediate team and the overarching strategy.
- Leadership: Requires the organisation to articulate what it will look like when leaders act as customer guardians. It is then imperative for leaders to understand their role and the behaviours required of them to achieve the customer strategy. Leaders themselves then need to consider the behaviours that they demonstrate for their teams and the behaviours that they reinforce from the frontline to the executive team.
- Structures & Networks: Requires the organisation to identify the most effective operating model (structures and processes) to support their customer strategy and keep pace with change. Often the customer is shared across teams such as marketing, sales and customer services. However, there should be one ultimate ‘owner’ of the customer experience, which may require you to break down silos or leverage lines of power and influence to achieve the customer strategy.
- People & Performance: Requires the organisation to identify how they will ensure that employees will be appropriately qualified, skilled and experienced to effectively act as customer guardians across the entire employee lifecycle. Specifically, they need to consider the standards for performance that are required, including behaviours and metrics, and how these will be set in a customer-centric manner. It is also important to consider the reward and recognition frameworks that can be introduced to encourage employees to embrace their role as a customer advocate. The approach that leaders will take to monitoring performance, as well as coaching and managing employees to effectively elicit appropriate customer-focused behaviour should also be considered.
- Decision Making: Requires the organisation to identify the business processes that need to change in order to reduce complexity for customers and allow employees to effectively provide customer care, in particular determining who is responsible for key customer decisions and defining clear escalation processes. This will include identifying any roles, responsibilities and accountabilities that are impacted by process changes, and ensuring that employees understand and support any changes to their roles and accountabilities
- Communication: Requires the organisation to agree with the language, communication channels, signs and symbols that will be used to reinforce the customer strategy and behavioural expectations. This should include the use of two-way, formal and informal communications that reinforce your customer strategy, values, ethics and behavioural expectations.
It is important to consider each cultural lever against the three (3) key drivers of performance:
- Foundations: Encompasses the policies, procedures, systems, tools and technology that the organisation requires to successfully deliver the customer strategy.
- Capabilities: Encompasses the individual and team knowledge, skills and abilities required to successfully deliver the customer strategy.
- Beliefs: Encompasses the values and beliefs that individuals need to have to keep them motivated, engaged and wanting to behave in a way that is aligned to your desired culture.
You have a framework, now what?
It is all well and good to upskill your customer-facing employees with good etiquette. However, truly creating a customer-focused organisation requires much more than ticking boxes through formal policies and procedures. Knowing the behaviours, mindset and values that you want to promote and empowering all of your employees to act accordingly is critical to success. This challenge belongs to all layers of the business, from the Board as they consider the impacts on the market perceptions of the company and enterprise customer strategy through to senior leadership teams, line and function leaders, customer-facing employees, as well as ‘back office’ functions such as finance and human resources. While there are numerous ways that you can approach a program such as this, outlined below are the core steps that should be considered. The below approach assumes that a business case has already been established and that your organisation is ready to commence creating a customer-centric culture.
1. Identify your core customer culture team Firstly, you need to consider who will lead this program of work - perhaps it is the CEO, or maybe it is the executive team member who ‘owns’ the customer, for example, your head of sales or customer service. Alternatively, a new role, such as a Chief Customer Officer (CCO) might be needed. Appointing a CCO has been gaining popularity since the early 2000s with the number of Fortune 500 companies that have CCOs increasing almost tenfold, from just under 1% in the early 2000s to 10% by 2014.
Additionally, approximately 25% of the top 100 companies now have an official CCO. This role has been established in organisations including Philips Electronics, FedEx, SAP, National Australia Bank (NAB), Australia Post, BT Financial, Bupa, AIG, Riot Games and Telstra. While the CCO or another executive may lead your customer strategy, the engagement, buy-in and leadership from the CEO are imperative to the success of any culture program. Your CEO’s role will be to support the customer culture lead and ensure that all executives are held accountable for behaving in a manner aligned to the customer strategy. Once you have your culture program lead, you need to identify the core team members that will help the leader to develop and implement the customer strategy. This commences by considering the key functions that need to be represented. While the inclusion of divisions such as HR, Customer Service, Sales and Marketing are obvious choices due to their clear links to either the customer or the organisations’ culture, it is important to consider other functions such as IT, Operations and Finance. While these teams may not have a direct link to the customer or your organisation's culture, they are critical enablers of the strategy.
Additionally, in order to truly establish a customer-centric culture, each and every employee must understand their role in customer care. This begins with ensuring that each key stakeholder group is represented in the program team to support the design and implementation of behaviours that are relevant and meaningful for all employees. Once you know the functions that are to be represented, it is important to agree to the individuals that will be involved. This should include people that will champion the customer strategy, however, key influencers who are critical or viewed as thought leaders will also be imperative to the program’s success. After all, there’s no point creating an ‘echo chamber’ where everyone agrees and supports the same ideas. You need people who, regardless of their role or level within the organisation, will question and challenge appropriately in order to innovate. It is also important to consider at this stage what role the customer will play in the design of your culture. For example, Telstra has created Customer Insight Centres in both Sydney and Melbourne. These unique interactive spaces include the latest technology so that Telstra can work closely with its customers to innovate and create meaningful solutions for them.
2. Design your ‘to be’ customer culture Utilising your customer culture program team and an experienced facilitator, undertake a series of focus groups or workshops to develop your customer-centric vision for the future. This should include storytelling to articulate what a successful customer-centric culture will look and feel like. Storytelling is a natural communication and learning tool for humans. After all, it has been utilised since the time man first drew on cave walls to share information approximately 40,000 years ago. Well told stories articulate relationships, processes, cause and effect, and prioritisation among the elements in the story, all of which are critical for an effective strategy. Companies such as 3M are renowned for incorporating storytelling across their business, from strategy development to sales and customer service, and innovation.
When utilising this technique it is important to ensure that the stories told to take each culture lever (i.e. Strategy, Leadership, Structures & Networks, People & Performance, Decision Making, and Communication) into consideration across each performance driver level (i.e. Foundations, Capabilities and Beliefs). Customer insights should also be incorporated into these sessions to ensure that you truly understand both their present and future needs. This may be through survey feedback, inviting customers into the room to share their experiences or creating a customer insights centre as Telstra did (see 1. Identify your core customer culture team above). It is also useful at this stage to leverage the external networks of your program team. For example, companies such as Southwest Airlines and Toyota have visited Zappos to understand and observe their customer culture in action.
3. Understand the gap Working through a similar process to Step 2 (i.e. utilising focus groups or workshops) agree and document the current state in relation to your customer-centric culture. This could be as simple as creating a dichotomy with your ‘to be’ state at one end and the opposite of this on the other end. Then plotting how far along the continuum your organisation is at present. For example:
When embarking on a culture change program, Ikea engaged frontline employees to understand their experience with and knowledge of customers and assessed this feedback against the customer
culture dimensions that they had deemed critical. This encompassed positive customer experience, as well as gaining an understanding of what happens when things go wrong. Additionally, in the UK, Virgin Trains’ CEO, Tony Collins, supported HR to facilitate workshops with leaders and employees to understand the gaps and translate the customer vision and values into meaningful action.
4. Identify priorities and create a program of work Now that you know what your vision for the future is, as well as how significant the gap is between the current state and desired future state, it is important to identify your key priorities, commencing with the components of the culture model that are most critical to achieving your customer strategy. For example, as previously mentioned, leaders and leadership behaviour will be critical to successfully realising your customer-centric culture. Companies such as Westpac have realised this and designed a series of workshops for their people leaders to enhance their customer mindset and provide them with the necessary capability to lead and support their teams to behave in a customer-centric way. While these sessions commenced with facilitators from Learning and Development, Senior Leaders attended early sessions and soon took over the facilitation for the broader business. It is also important at this stage to identify ‘quick wins’ or easy to implement actions that have immediate tangible benefits. For example, adding customer culture as a standing item to key meeting agendas can be a useful reminder for employees at all levels. This can be as simple as asking team members to share a customer story - positive or negative - in order to recognise positive behaviour and share lessons learned. Companies such as BP implement this strategy into their transformation programs and include change management as a standing agenda item in all key meetings.
Once you have your priorities and quick wins, it is time to create your program of work. When documenting this be sure to consider allocated time frames, budgets and stakeholder engagement, as well as the natural progression from one activity to another. For example, it may make more sense to address any changes regarding employee identification, attraction and selection prior to revising an onboarding program. Finally, it is important to consider when and how you will monitor the progress of the program through customer and employee feedback. This can be done at regular intervals or aligned to key program milestones. Whichever you decide, it is important to consider other employee and customer contact points so as not to annoy them with a battery of communications.
A customer-centric culture can be defined in a corporate charter, but it’s unlikely that this alone will translate into the realisation of what is defined. When all is said and done, culture comes down to the decisions individuals make on a daily basis that align with the aspirations of the business. However, there are many tangible actions that can be taken to create the right environment and education for employees to instil the values and beliefs that will elicit the ‘right’ behaviours from them. Culture takes time to embed and become the norm, and even when you get there you need to maintain it. The starting point is to ask yourself ‘does your organisation’s culture support effective customer-centricity?’ If you have any hesitation or cannot definitively answer ‘yes’, it’s time to do some planning.