Customer-Centricity

"There are ducks, and there are eagles. The ducks run around the ground quacking all the time, stating rules, following orders, doing what they are told and often pecking at other ducks. Eagles soar high above to get the best perspective and decide what is best for the customer."

- Ken Blanchard (Leading at a Higher Level)

“A company's primary responsibility is to serve its customers . . . Profit is not the primary goal, but rather an essential condition for the company's continued existence.”

- Peter Drucker

“The alignment of systems, processes and people to deliver products and services to internal and external customer in the most agile way.”

- Charteris

What is Customer-Centricity?

“Customer-centricity involves aligning organizational resources for effectively responding to the ever-changing needs of customers, while building mutually profitable relationships.”

- Craig Bailey & Kurt Jensen

Aligning Organizational Resources

Personnel Operating practices and procedures Systems (internal and external) Products and services

Aligning Personnel

• Recognizing and rewarding customer-centric behaviour.

• Training every staff on customer-centricity.

• Ensuring that decision-making hinges on customers.

• Using communication tools and techniques for highlighting the firm’s progress in customer-centricity

Entrenching Customer-Centricity via Training cum Internalization

Customer-centricity can be embedded on organizational processes through adequate training and modeling of interdepartmental transactions as depiction of customer relationships that require optimization.

Focus of Training

• Communicating effectively and building rapport.

• Identifying and exploiting opportunities.

• Managing complex and taxing conversations.

• People and communication styles

Requirements for Building Mutually Profitable Relationships

Ascertainment of customer’s request Ensuring Profitability Find out repeatability of transaction Determination of feasible term of

relationship.

Voice of The Customer Process

• Obtain customer’s pulse• Involve the customer• Analyze information• Socialize results• Implement customer-focused

changes• Respond to the Customer

How to Obtain Customer’s Pulse

Survey the Customer Interview the CustomerGet information from customer-

facing personnelObserve actions and behaviours

of customersEmbark on mystery shopping

Three Different Faces of a Customer

• Business decision-maker• End-user of product or service• Procurement function

Customer Survey

Transactional Surveys Relationship SurveysFocuses on measuring customer satisfaction with individual or collection of Interaction with firm.

Focuses on all aspects of the firm such as• Marketing• Product Management• Service and Support• Sales/Account Management• Engineering/Development• Professional Services• Training and Education• Accounting/FinanceSurvey on many individuals incustomer’s firm.

Factors that Aid Collection of Inputs from Customer-Facing Personnel

• Environment of trust • Establishing expectations with

personnel• Managing anecdotes

Involving Customers

This can be done by means of the following:1. Focus Group: For obtaining information

through discussion with a group of participants, taking cognizance of commonality in demographics, attitudes or purchase patterns.

2. Customer Board of Advisors: For holding periodic meetings with selected number of senior executives from firm’s customer database. Factors that determine selection of customers include strategic importance, level of complexity/sophistication in use of products or service, diversity of industries which the firm represents.

Analyzing information

Analyze customer feedback and information obtained

Output:i. Positive trendsii. Challenging trendsiii. Issues raised by customers

Compare to other information held by the firm

Such information include the following:

i. Customer demographicsii. Transactional history

This gives rise to development of customer segmentation strategy

Socialize Result

Top-level reporting for general awareness

Comprehensivereport for sectional,

departmental and project

action-planning

Steps for Implementing Customer-Focused Changes

• Getting management commitment • Conducting cross-functional reviews• Voice of customer tracking and reviews• Forecasting

Key Performance Indicators Targeted for Improvement

• Customer Satisfaction• Customer Retention• Churn• Revenue and Profitability

-Overall -By Customer Segment -By Customer

• Product/Service Diversity By Customer

Responding to Customers1. Immediate Responsei. Establishment of criteria for ‘immediacy’.ii. Implementing ‘immediacy’ team.iii. Management reporting.

2. Responding with Account StrategiesThe six steps for implementing Account Strategies:i. Record account-specific resultsii. Involve senior management in customer

experience.iii. Prepare for customer review meetingiv. Engage customer in meetingv. Inform the organization and respond

resourcefully.vi. Continue the process

Other Methods of Updating Customers

Newsletter E-mail Website E-zine Instituting the update as a component of firm’s

account management practices Using interactive sessions of forum or board of

advisors. Responding immediately to participants during

survey.

Common Pitfalls of CRM

Accepted as a technical instead of business problem

Using a top-down approach Non-involvement of senior management Lack of focus on areas of high adoption Driven by IT department instead of Sales,

Marketing and Service. Biting more than one can chew Organizational unpreparedness

Feature Product-Focused Customer-Centric

Customer Orientation Discrete transaction at a point in time Event-oriented marketing Narrow Focus

Customer life-cycle orientation Work with customer to solve both immediate and long term issuesBuild customer understanding at each interaction

Solution Mindset Narrow distribution of customer value proposition Off-the-shelf products Top-down design

Broad definition of customer value proposition Bundles that combines products, services and knowledge Bottom-up, designed on the front lines

Advice Orientation Perceived as outsider selling in Push product Transactional relationship Individual to individual

Working as an insider Solutions focus Advisory relationship Team-based selling

Customer Interface Centrally driven Limited decision-making power in field Incentives based on product economics and individual performance

Innovation and authority at the front line with customerIncentives based on customer economics and team performance

Business Processes “One size fits all” processes Customization adds complexity

Tailored business streams Balance between customization and complexityComplexity isolated within the system

Organizational Linkages & Metrics

Rigid organizational boundaries Organizational silos control resources Limited trust across organizational boundaries

Cross-organizational teaming Joint creditHigh degree of organizational trust

From Product-Focused to Customer Centric Firm

Source: Booz Allen Hamilton

Solutions Advance Customer Value Proposition

Source: Booz Allen Hamilton

Industry

Traditional

Traditional = Value

Product Proposition

Truck Manufacturing

Trucks “We sell and service trucks”

Aerospace Components

Aerospace Fasteners

“We sell high-performance fasteners”

Utilities Electricity “We provide electricity reliability”

Chemicals Lubricants “We sell a wide range of lubricants”

Pharmaceuticals Drugs “We sell pharmaceuticals”

Value-Added Customer-Centric

+ Services = Value Proposition

Financing Service

“We can help you reduce life-cycle transportation costs”

Application/Design support

“We can reduce your operational costs”

Energy asset maintenance

“We can help you reduce total energy costs”

Usage and application design Lubricant analysis

“We can increase your machine performance and up-time”

Product support Outcomes-driven information database

“We can help you better manage your patient base”

Developing Customer-Centric Culture

Put employees in the customers’ shoesPut employees in the shoes of a particular

colleagueReview your habits and attitudeBe evaluated in a 360-degree approach by

colleagues you frequently deal with (through a random selection.

“Being a customer centric company can’t feel contrived; it has to feel normal. It requires a concerted effort by the entire company: All of its activities and all of its results must be focused on the customers’ explicit and implicit goals.”

- Jonathan Narducci

“In today’s commercial environment, the customer relationship cannot be commodified. Companies must continuously renew their commitment—and strengthen their capabilities—for knowing and reaching the customer, and delivering an experience tailored to the needs, values and preference of target segments. Engaging purposefully with the multi-polar world by mastering these core principles of customer centricity—know, reach and deliver—should be a key element of a consumer enterprise’s current response to the downturn, and a key element in part positioning the business for long-term benefit.”

- Accenture, Customer-Centricity Principles for Acquiring Customers in Today’s Multi-polar World

Customer-Centricity as a culture must integrate both cognizance and ratification of internal and external customers in order to synchronize workable behavioural acceptation in every facet of a firm’s interaction sphere.

“Customer - centricity needs to come from the inside out………….Leadership must avoid a double standard that makes it OK for managers to argue with or demean staff while still being courteous and considerate to external customers.”

- Elaine Berke

What is Customer Advocacy?

It’s a cross-functional role empowered to marshal organizational resources to resolve troublesome customer issues and identify root cause while balancing the financial realities and strategic goals of the company.

The Need for Customer Advocacy Function

To steer customers away from veiled gaps, inefficiencies and organizational complexities that perturb perception, thereby managing “customer experience” effectively.

Key Skills for Customer Advocates

Straight-forward and honest Interpersonal management and

communication Good business sense and judgment Organizational navigation Executive Presence Time management Project management

Customer Advocacy Process Framework

Customer segmentation Engagement process Escalation process Response planning, analysis and

execution Managing customer experience

through resolution Internal management review

Factors to Consider When Crafting Message

Ensure your communication stands alone

Consider the audience Read it “as if” you were the recipient Acknowledge the “bigger picture” Special handling procedures when

emotionally charged

Do’s of Customer Centricity Don’ts of Customer Centricity1. Adjust your mission and vision statement Expect a brand new mission statement to make

you a customer-centric company

2. Segment your customer base Overcomplicate the segmentation

3. Align your organization structure with the segmented customer view

Reorganize too often and for the sake of it

4. Make good use of technology Expect technology to build customer relationships for you

5. Create new performance measures Throw out the old performance measures

6. Study the behaviours, attitudes and demographics of your customers

Confuse behaviours and attitudes with needs

7. Try to understand the true value of your customers

Rely on the customers past buying patterns

8. Empower employees, particularly customer-facing staff for proactive relationship-building

Allow anyone in the company to say (or think) “this is not my job/responsibility”

9. Set clear goals for achieving a defined state of customer centricity by a certain point in time

Assume that your project/ programme were completed, you ‘got there’

10. Encourage and seek to create customer loyalty

Think of loyalty as the tenure of a customer (duration of the relationship)

11. Communicate and engage all stakeholders in the process

Limit your change management efforts to the marketing, sales and customer service functions

The Seven Characteristics of Customer-Centric Companiesi. They conceive of themselves not as a group of products, services, territories, or

functions, but as a portfolio of customers.ii. They know how much money they make or lose with each of their customers or

customer segments, and they understand why.iii. They understand the different needs of different customers and group them into

operational customer segments and sub-segments based on common needs. They thrill their customers by delivering knockout value propositions that competitors cannot match.

iv. They continually innovate by evolving their customer segments and sub-segments, and improve their value propositions as customer needs change.

v. They organize their businesses into customer segment business units to establish clear ownership of the customer experience and accountability for the financial performance of each customer business unit.

vi. They create a competitively unassailable customer innovation advantage based on a customer R&D model grounded in continual experimentation at key customer touch points.

vii. They understand in precise analytic terms exactly how their different customer relationships contribute to or subtract from the total value of the firm; because they manage their customer portfolio on this basis, they know what to manage and where to invest in order to create sustainable, profitable growth and drive outstanding share price performance over time.

Source: Wharton Business School

“Managers like profits just as much as shareholders do, because the more profits the firm makes, the more money is available to pay managers. In other words, the need for a healthy share price is a natural constraint on any other objective you set. Making it the prime objective, however, creates the temptation to trade long-term gains in operations-driven value away for temporary gains in expectations-driven value. To get CEOs to focus on the first, we need to reinvent the purpose of the firm. This is what customer-centric capitalism is all about.”

- Irving Wladawsky-Berger

Dr. Elijah Ezendu is Award-Winning Business Expert & Certified Management Consultant with expertise in HR, OD, Competitive Intelligence, Strategy, Restructuring, Business Development, Sales & Marketing, Interim Management, CSR, Leadership, Project & Programme Management, Cost Management, Outsourcing, Franchising, Intellectual Capital, eBusiness, Social Media, Software Architecture, Cloud Computing, eLearning & International Business. He holds proprietary rights of various systems. He is currently CEO, Rubiini (UAE); Hon. President, Worldwide Independent Inventors Association; Special Advisor, RTEAN; Director, MMNA Investments Limited. He had functioned as Chair, International Board of GCC Business Council (UAE); Senior Partner, Shevach Consulting; Chairman (Certification & Training), Coordinator (Board of Fellows), Lead Assessor & Governing Council Member, Institute of Management Consultants, Nigeria; Lead Resource, Centre for Competitive Intelligence Development; Turnaround Project Director, Consolidated Business Holdings Limited; Lead Consultant/ Partner, JK Michaels; Technical Director, Gestalt; Chief Operating Officer, Rohan Group; Executive Director (Various Roles), Fortuna, Gambia & Malta; Director, The Greens; Chief Advisor/Partner, D & E; Vice Chairman, Refined Shipping; Director of Programmes & Governing Council Member, Institute of Business Development, Nigeria; Member of TDD Committee, International Association of Software Architects, USA; Member of Strategic Planning and Implementation Committee, Chartered Institute of Personnel Management of Nigeria; Adjunct Faculty, Regent Business School, South Africa; Adjunct Faculty, Ladoke Akintola University of Technology, Nigeria; Editor-in-Chief & Chairman of Editorial Board, Cost Management Journal; National Executive Council Member, Institute of Internal Auditors of Nigeria; Member, Board of Directors (Several Organizations). He holds Doctoral Degree in Management, Master of Business Administration and Fellowship of Several Professional Institutes in North America, UK & Nigeria. He is an author & widely featured speaker in workshops, conferences & retreats. He was involved in developing Specialist Master’s Degree Course Content for Ladoke Akintola University of Technology (Nigeria) and Jones International University (USA). He holds Interim Management Assignments on Boards of Companies as Non-Executive Director.

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