Category Archives: Case Study

Customer Centric Leadership in Action – A lesson from Elon Musk

tesla_charging_station

One of the central tenets of being a customer centric leader is listening to customer feedback and responding with action.

There is no better recent example than Elon Musk’s response to a customer complaining about the Tesla charging stations being used simply as car spaces.

The Tesla customer complaining happens to be Loic Le Meur, a fellow entrepreneur and major tech influencer, with 130k followers on twitter. You could argue that probably holds more weight than just your average customer but clearly the issue was one bubbling up and on Elon’s mind.

Here is the interchange from the two on twitter below:

elon_musk_twitter_response

Loic’s tweet was responded to within 20 minutes and within 7 days the press announced “Tesla to begin charging idle fees to those remaining on the charger beyond a full charge”

As the team at OfficeChai reported:

“Tesla was going to charge $0.40 for every minute a fully charged Tesla would stand at its parking stations after a five minute grace period. This simple change would ensure that people wouldn’t leave their cars at parking stations, preventing others from using them.

And what’s incredible is the pace at which the product change was implemented. Tesla might still call itself a startup, but it hardly is one – it has over 30,000 employees, and large engineering teams. To have a product feature conceptualized, implemented and shipped in a week is nothing short of miraculous.”

Now this might not be the perfect solution but Tesla will listen to customers and refine further as needed.

This is what customer centric leadership looks like in action, in this case led from the top. Elon’s expectation is that everyone in Tesla is listening to customers and responding to continually refine and improve the experience and value being offered.

Are you are customer centric leader? Find out more in our book, the Customer Culture Imperative

 

What is the kryptonite for disruptors?

Established businesses everywhere are under attack. The headlines are full of stories of business disruption. Entrepreneurs everywhere are building companies to unseat the entrenched firms.

While many think the answer is to invest in more technology, lobby government or follow their competitors actually the answer is right in front of them.

Our team in Sydney recently had the chance to sit down with Luke Jecks, the Global CEO of Naked Wines for his perspective. Listen to Luke talk about what he describes as the Kryptonite for disruptors, its a great lesson for anyone in business today:

So what’s the Kryptonite for disruptors? A Customer Culture or as Luke puts it:

“Love your customers”

If you spend time understanding and acting on your customers needs you will create loyalty that will keep you as immune as you can be to disruption.

So how did Naked Wines disrupt the wine industry?

Before Luke setup Naked Wines four years ago he was looking for an industry where customers felt disenfranchised. He found it in the Australian wine industry – a market dominated by two large retail chains owned by Coles and Woolworths that between them shared almost 70% of wine sales nationally. Not only did he find wine lovers who felt little connection with the vast array of brands but also boutique vineyards that were being squeezed out of the market by ever narrowing margins and an inability to finance the next vintage.

Luke knew that if he could create a personal connection between wine growers and consumers and a financial model that could provide more stability and certainty for wine growers he could build a new business.

He realized that he needed wine consumers as repeat customers and he came up with the idea of “angels’ – that is consumers as angel investors who would pay $40 per month and build up a credit in their account to be used to buy the boutique wines of their choice.

Four years after launch Naked Wines in Australia has more than 50,000 sustained angels, more than 35 boutique winery suppliers with an online communication and ordering system that connects them.

Annual Australian revenue of $30 million and more than $200 million globally is testament to the fact that the whole Naked Wines team have a culture that enables them to “love” their customers.

Isn’t it time to create a customerculture in your business and build up your disruptor defenses?

If you are interested in creating this type of culture in your organization why not attend one of our MRI Accreditation Workshops held all around the world!

 

Lexus – a beacon of customer centricity

lexus_windy_road

The auto manufacturing industry will soon be under siege – impacts are already being felt with easy consumer access and convenience of services like Uber, better public transport, parking costs and restrictions in increasingly large cities around the globe and technological advances in communications propelling less commuting between home and work.

Traditionally auto dealers have focused on each transaction – just getting a sale – and not on nurturing the long term relationships with their customers that will make them lifetime brand loyalists.

Lexus is an exception. Nick Dieltiens, a customer centricity consultant based in Europe, tells us of his experiences when working with Lexus in Europe. First the mindset. It’s not about the “car”, its about the “customer’s journey”. This is illustrated by the fact that on the rare occasions when a Lexus broke down in the French Alps, Lexus arranged for a helicopter to be flown in to collect the stranded family and fly them to their destination.

Also, customer service people at Lexus in Europe are empowered to make the decision to take back a car if the customer is not entirely satisfied with the purchase. Nick tells the story of a senior Lexus executive taking back a car from a customer because the remote control would not connect to the customer’s garage door and the issue could not be fixed. So the executive purchased a Mercedes at a discounted price and provided it to his customer at that discounted price.

The next car the customer bought was a Lexus.

The customer culture in many Lexus dealerships in Europe is strong. Staff are trained to observe Lexus vehicles on the road. If one is see with a broken tail light, they would wave down the driver where safe to do so, give them their car, take the car to get the light fixed free of charge and return the car to the owner.

You may think this costs Lexus a lot of money. It may cost a little more in the short term, but it pays off in a big way with high customer loyalty in car servicing and repeat purchase.

The most important investment by Lexus is in building and retaining a customer culture! This will be essential for all auto companies if they want to grow their businesses in future.

Lessons from REI: Aligning your People

We have just completed one of the busiest weeks in retail in the United States, with Black Friday for the physical stores and Cyber Monday for the online retailers. This week now blends together with doorbuster deals bombarding us constantly online and instore in the week leading up to Thanksgiving as well as weekend afterwards.

What is different this year is that some major stores have decided to stay closed during this period. In the land of the consumer this a really big deal!

One chain in particular stands out, REI, the outdoor recreation retailer with more than 12,000 employees and 140 stores around the US decided to close this past Black Friday. See below, their CEO, Jerry Stritzke’s 30 second announcement:

 

“We believe that being outside makes our lives better. And Black Friday is the perfect time to remind ourselves of this essential truth.” – REI CEO, Jerry Stritzke

So what is behind this decision? I believe it is to better align REI’s core values with its actions in the market. REI’s core mission is “to inspire, educate and outfit for a lifetime of outdoor adventure and stewardship.”

What better way to live that mission and align all of their people around it than closing on a day that allows their own people get outside and live the company’s mission.

Now that all sounds great but how does that help their customers? No doubt some customers may be inconvenienced by their physical stores being closed. However they will still have a small number of staff manning their website so they are not completely close for business.

REI are reacting to growing concerns by their customers and others that retail in general is overshadowing the core purpose of thanksgiving which is to celebrate with family and friends. They are betting that this decision will pay off over the longer term by aligning their people with their mission while also meeting the changing expectations of their customers.

Ultimately if you want your people and customers to really buy-in to what your company is about you must walk the talk, for me this is strategic alignment in action!

Interested in what it takes to be truly customer centric? Learn more here

78 Years of Customer’s Trust Destroyed in an Instant

vw_up_in_smoke

Source: The Economist

One of the most dramatic instances of breaking a promise to customers came during this past week as VW admitted to deliberately misleading regulators and customers about its car exhaust emissions.

More than 11 million vehicles had been fitted with software designed to trick emissions testers. What the hell were they thinking? Clearly not what we see from customer centric organizations that live by the motto – “What’s best for the customer is best for the business”.

If that one phrase had been part of the culture at VW it might have stopped what has turned out to be a multi-billion dollar problem. According to the Economist  they have set aside more than $7bn to resolve the issue.

This massive betrayal is not only going to impact customers but employees around the world will lose their jobs through no fault of their own. No doubt it will be a massive blow to the morale of those employees still left.

When companies align their interests with those of their customers both profit, surely it is the only way to conduct business in the future?

 

How does your business compare with America’s 3 worst industries?

Frustrated Customer

The state of customer service in 3 US industries is driving customers to distraction.

3 Industries That Desperately Need Customer Service Makeovers

In 2014 Comcast, the cable company, “won” the annual Worst Company in America competition as voted by Consumerist readers. The state of customer service has been so bad for so long that consumers are skeptical to new announcements about improving customer service. Even the recent announcement that a long serving executive, Charlie Herrin, has been appointed as Comcast’s new senior vice president of customer experience has been met with some derision.

The related industry of pay TV-Internet providers including Time Warner, DirecTV and Verizon is also known for poor customer service and consumer complaints that the industry players lack real competition.

Studies also show how frustrated and dissatisfied consumers are with wireless providers including AT&T, Verizon, T-Mobile and Sprint. A vote at Ranker.com placed AT&T at the top of the list of “Companies with the Worst Customer Service.”

These 3 industries are the tip of the iceberg. There are many more that deliver a poor customer experience and do not seem to be able to overcome the roadblocks.

Is your company like one of these? Are you finding roadblocks to improving customer experience across all the organizational touch-points you have with your customers? The chances are that you do not have buy-in from all parts of your business, other priorities are taking precedence and your customer experience is not improving at the rate or level that you want.

What’s your response? Are you adopting an ad hoc approach to plugging the weaknesses which is eating up all your time and showing little progress? Are you spending time at endless meetings trying to persuade cynics of the importance in taking a “customer” approach or are you really looking for a solution that works?

There is only one way to get a solution that counts and can be sustained. You must first identify why customer experience is poor. To do this you must get insights about your customers’ needs and behaviors and what you must do to deliver value that satisfies them. There is only one way to act on this – to identify weaknesses in your customer-focus culture and take action to strengthen it. If you don’t act on this you won’t fix customer experience problems. We have found through extensive research that the right action to strengthen customer-focus culture will provide your business with valuable insights that will improve customer experience and increase customer retention and revenue.

How? You must start by measuring your customer-focus culture. If you don’t measure it, you can’t manage it. This will show the source of your customer experience problems and create a focus for all in your business and relevant functions to act on a permanent solution. It will galvanize buy-in from those areas that are resistant. There are usually clear, simple and quick actions you can take. These actions will strengthen the customer experience mindset and habits around creating more value for customers with enhanced customer experience.

If Comcast is finally serious, its new senior vice president of customer experience will need to take the actions proposed above. If he wants a proven roadmap and methodology to introduce real customer-centric change into Comcast he can find it in The Customer Culture Imperative: A Leader’s Guide to Driving Superior Performance.

Is your business model under threat and your survival at stake?

Business Model Threat

In any large successful business today parts of the business are performing well while other parts are ailing. Multinationals like Ford Motor Company and Starbucks are performing well in some countries, but not in others. Samsung and Ikea have high market acceptance of some products, but not others. But, what’s important is to determine if your core business model is under threat. If it is, your very survival is at stake.

Consider what is happening to the traditional postal service corporations like the US Postal Service (USPS), Royal Mail (UK) and Australia Post. Virtually all national postal services originated from government owned and legislated monopolies when letters were the primary source of written communication. These organizations created thousands of bricks and mortar post offices and shops, a large transport infrastructure to deliver letters using thousands of postal staff. The digital revolution has changed all that – letter volumes are declining rapidly, with consequent ongoing and growing losses for incumbent mail services. The business models of traditional postal corporations are under attack from all sides.

Take Australia Post. Like many postal corporations it has developed a growing profitable parcel delivery service fuelled by online consumer purchasing. It is providing new services like its digital mailbox for business and consumers. But profits from these new lines of business are being eroded by losses in the traditional letter delivery business and from competition. Both Singapore Post and Japan Post have purchased courier companies to compete in the Australian parcels delivery market. Also Uber Rush is allowing people to order pickup and delivery of packages using the Uber app. Last year Volvo trialed a service called Roam Delivery that allows retailers to drop off merchandise inside your parked car. All of this adds up to intense competition for Australia Post. Much the same is happening to US Post and Royal Mail as well as other incumbent mail and postal services around the world.

How can organizations like Australia Post survive? They must develop and strengthen a customer-centric culture as the foundation of their organization and as a basis for long-term competitive advantage. This means that they must have strategic alignment with their markets and customers where an understanding of current and future customer needs and current and potential future competitors is factored into their strategies and supported by everyone in the business. This knowledge and mindset must become embedded in all of their businesses and throughout all functions in their organization to enable them to become more agile, competitive and innovative to create superior value for their customers. That in turn will help to drive ongoing growth and profitability.

The postal organizations around the world seem to be at different stages on the journey to customer centricity. New Zealand Post is probably one of the most competitive being one of the earliest to have its mail service deregulated in 1998. It is now two years into a 5-year transformation plan and is showing improvements in overall profitability. USPS lost US$5.5 billion in 2014 despite its growth in package services and has a lot of ground to make up. Australia post is profitable, but profits are declining from the impact of mail service losses and there is now a strong focus on developing a customer culture.

Is your business model under threat? You can measure where you are in terms of customer centricity and what stage of the journey you have reached by exploring the roadmap provided in the award winning book: The Customer Culture Imperative: A Leader’s Guide to Driving Superior performance.