Category Archives: Case Study

How CFOs can use a customer culture to deliver $15m to the bottom line!

Internal Customer Culture

A lot of the discussion about building a more customer focused organization centers on the customer facing parts of a business. While there is no doubt major improvements can be driven by sales, marketing and customer service, the real turbo boost to organizational performance comes from support functions that creates a culture around their internal customers.

“If your not serving customers make sure you are serving someone that does”

 Corporate Support functions like Finance, IT and Operations have the potential for releasing huge gains to the business in terms of cost savings and profit improvement. How? By developing a culture where they see their internal stakeholders – that is those to whom they provide their services – as customers.

When they develop a “customer” mindset they think about the value (or lack of) they are providing. They stop delivering reports or services that have no value to their customers and focus on things that will increase value.

John Stanhope, CFO of Telstra, a $25 billion Australian telecommunications business set out to transform his Finance & Administration Group of 2500 people into a support group that would create new value, provide top service and be seen to be valuable by its customers. He painted a vision of what he called a “Value Service Culture” (known as VSC) in which he wanted all his staff to identify their internal (to Telstra) customers and deliver services of value to them. This journey from 2008 to 2012 was an outstanding success.

“We have delivered $15 million per annum in recurring gains from stopping non-value services and activities while creating more value in those services that were needed by our customers. This translates to an additional $55 million added to the value of our business.” – John Stanhope, CFO, Telstra Corporation, 2012.

An investigation by Telstra’s Finance & Administration group of estimated gains and savings conducted in 2010 showed annualized gains and cost savings of $15 million for 2009 representing added value to the business of $55 million.

These gains were derived from analysis of specific initiatives by:

a)    Credit Management acting to collaborate with Telstra customers to reduce bad debts, cost savings from less follow-up calls and longer customer retention periods.

b)   Risk Management & Assurance collaborating with internal customers through an education initiative clarifying compliance requirements and streamlined processes for reducing work for both parties. Cost savings from labor savings.

c)    Corporate Security and Investigations working with Telstra retail shops to provide better processes, follow-up and liaison with those shops most targeted by consumer fraud. Reduction of fraud yielded large cost savings.

d)   All finance and administration groups engaged in activities to reduce duplication and eliminate non value-add activities and reports resulting in measurable savings.

Care was taken to attribute only those gains and savings that could be aligned with VSC initiatives to do with understanding customer needs, providing greater value for customers, monitoring customer feedback and collaborating with customers to deliver the Group’s fiduciary responsibilities more efficiently. Later analysis showed these gains were continued over 2010 to 2012.

Stay tuned for my next blog post in which I will summarize the actions vital to Telstra’s VSC success and the lessons learned from this transformation experience.

How customer immersion programs amplify a customer culture

customer immersion programs

One of the most significant challenges for large businesses is staying engaged with the lifeblood of the business – customers. As businesses grow people become disconnected from customers at all levels of the organization. It’s the leadership’s role to bring a focus back to customers and how every individual has an impact.

There is nothing like the personal customer insight and impact to be gained from interacting with customers. You get the raw emotion of a frustrated customer appealing for help if you listen in to customers describing the problems they are having with your product or service to a call center rep. It can have even greater impact if you watch customers trying to buy your product and experiencing increasing frustration from time-consuming processes or unwieldy websites.

Senior executives and other non-customer facing staff don’t really understand their customers unless they can experience what customers are going through. Customer immersion programs are designed to do just that – give people a first hand experience of how customers are thinking and acting.

Credit Suisse, based in Switzerland, follows a five step process for immersing executives and senior managers with a customer perspective:

  1. Conduct business: the executive goes into a branch, waits in line and conducts business with a teller
  2. Watch the customer: look at what the customer looks at and see how he behaves when doing business with the company
  3. Talk to customers: ask questions of customers and listen to their responses
  4. Investigate other channels used by customers such as the website, call center and the company’s publications: use these channels as a customer to apply for credit, get an answer from a sales rep and decipher brochures
  5. Review the experience at a workshop: discuss insights, compare experiences and lessons learned

On this side of the Atlantic, Adobe recognized they weren’t always easy to do business with, and were not consistently delivering the level of service customers expected. Adobe’s Customer Immersion Program provides Adobe’s senior leaders with the opportunity to experience first-hand what their customers experience when they engage with Adobe. Like Credit Suisse, executives and senior managers at Adobe have the opportunity to experience what a customer would experience by playing the role of a customer. Also they experience the interaction with customers when they call in with a problem or a need. Check out this short video describing what’s involved:

Adobe’s Customer Listening Post facility brings customer experiences to life –  live video and data feeds showing what’s happing in real-time.

Technology such as camera phones, videography, button cameras and online diaries to document the immersion process enable you to play back customer interactions and experiences with your business.

The power of the immersion program is when it challenges people’s perceptions of who their customers are and how they use their products. A key benefit of immersion is its ability to create a culture of consumer-focused thinking within the organization from top to bottom. First-hand experience and advocacy by senior executives dramatically enhances a customer culture in the organization. Companies best internalize the consumer perspective when executives at all levels can experience its impact. It fosters a greater appetite for customer understanding. It ultimately leads to an improved customer experience.

Come and hear more about how to create a customer culture at these two great live events put on by GlobalHRNews and the Executive Next Practices Institute:

November 13, 2012 – Global Leader Conference – Chase Building New York

BUILDING the “CUSTOMER CENTRIC” ORGANIZATION

November 29, 2012 – A Re-Set of Strategy and Opportunity Capture for 2013 – Academy of Motion Pictures in LA

Just 3 weeks after the US elections, join top CEO’s and other leaders from the FORTUNE 500, regulators, authors and industry thought leaders as we view a “360″ of the economic and leadership world for 2013.

I will be presenting on  “The Seven Disciplines of a Customer Centric Culture” and part of a panel discussion on the implications of the election results and what to expect in 2013.

How Hawaiian Airlines has built a Customer Culture

Hawaiian Airlines Customer Focused Culture

Hawaiian Airlines – Customer Focused Culture

Charles Nardello, the SVP of Operations at Hawaiian Airlines, recently wrote about how they were able to drive improvement in the key metrics important to airline customers.

Hawaiian are now routinely ranked first by the US Department of Transportation among all airlines for on-time performance and fewest cancellations as well as garnering top marks for best baggage handling and fewest customer complaints.

How did Hawaiian achieve these outcomes? By creating a customer culture based on 3 strategies:

1) Really understanding the Hawaiian travel customer

2) Benchmarking Hawaiian on customer “moments of truth” regularly

3) Empowering Hawaiian employees to handle unexpected situations

Knowing your Customer

Hawaiian Airlines is infused with a customer focused culture that permeates everything.

“For every decision we make, from the most basic to the complex, the customer always comes first—they are the driver of our decision-making and strategic planning,” – Charles Nardello

A culture that brings the customer perspective to every decision acts very differently than a company where customers are an afterthought or are only considered when reacting to customer problems. At every level of the organization, whether deciding on which cutlery to use in the cabin or which markets to fly to, a deep understanding of the customers they serve and the experience they want to create drives the decision.

Benchmarking and Embracing Complaints

In order to benchmark, Hawaiian Airlines surveys customers every month on their experiences with the airline and factors the results into every employee’s bonus pay.

“Every employee receives a scorecard rating them on how well they’ve performed in interacting directly with the customer or, in the case of senior executives, on decision-making and strategic planning.” – Charles Nardello

It’s an approach that guarantees that everyone at the airline will remain focused on the customer. In particular they are focused on the key moments of truth that drive the most value for their customers. This includes check-in, boarding, the flight itself, baggage retrieval and how customers are treated via each stage of their journey.

The airline reinforces this customer focus via a streaming news ticker that runs on the lower part of computer screens and TVs  in break rooms and crew lounges. The ticker show unedited, unfiltered, real-time customer reaction via social media.

Nardello suggests that he is grateful for complaints as it provides the opportunity to do something immediately to improve.

Unfortunately most customer’s don’t complain they just leave and the company wonders what happened. In fact customers are more likely to complain to someone else about the experience than the company directly. This creates even more of challenge for a company to win them back.

If a reaction is negative, the airline addresses it immediately. As Nardello points out, “Our speed in addressing the problem could make the difference between retaining that customer for future flights or losing him or her forever.”

Empowered Employees

No company can prepare for every situation  that can trigger customer dissatisfaction, which is why those that excel at customer service train and empower their frontline employees to solve problems on the fly.

“We believe employees perform best when empowered to improvise and bring unmatched service to their customers in a sincere, personal way.”

This strategy has served Hawaiian well as it continues to be ranked among the very best airlines in North America. It was recently ranked 3rd most profitable on a pre-tax margin basis behind two other airlines know for high levels of customer focus – Alaskan Air and Southwest Airlines.

How to be a “game changer” in your business

We just recently released a new case study on the CMO of Franke, Charles F Lawarence. It tells the story of the impact a “Market Responsiveness Index” survey can have on your company and career.

Charles described the experience best himself:

“This MRI tool was a game changer for Franke and me personally.”

The tool allowed Charles to quickly gain insight into the organization he was leading. It highlighted areas of organizational  strength and weakness as it relates to customers and alignment around the Franke brand and customer experience.

More importantly, it provided a rallying point for change and action planning.

You can download and read more about Charles and the Franke story here.