Category Archives: Chief Customer Officers

Culture eats customer experience quick wins for breakfast – its time to get truly customer obsessed!

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Apple’s culture continues to reinforce Steve Job’s approach to designing using a customer lens and working backward.  Source: Apple’s WWDC18

A recent article by Nadia Cameron from CMO highlighted a panel discussion in which many leaders acknowledged the quick wins for customer experience improvements are over.

It’s great to see more and more senior leaders recognizing the need to go deeper and look at organizational culture. Whilst it can be more difficult work, it is also longer lasting and more sustainable if leaders put the effort in to change the cultural emphasis towards making customer’s lives better.

So how are CMOs and other leaders looking to address culture?

One of the best examples comes from Rachael Powell, the Chief Customer and People Officer for Xero, they are taking an inside-out approach by focusing on their people and how they impact the customer’s experience.

Xero has recognized the intimate connection between how employees are treated and how they, in turn, treat customers:

“It really is about starting with our own people first who are the biggest ambassadors for our brand, winning their hearts and minds, then resonating that out to our channel, which is bookkeepers and accountants, and ultimately the end customer sitting at the end of the spectrum,” she said. “If we achieve this, we go from having 2000 ambassadors, our people, to having hundreds of thousands of ambassadors globally.”

They also appear to have a strategy for shaping their culture over time with 2 of 6 pillars sitting with Rachael: “great people and teams, and love and protect our customers”

It will be interesting to follow the Xero journey as they continue to grow!

Over the past 10 years, MarketCulture has researched 100’s of companies including Google, Virgin, Amazon, and Apple to find out what they do differently when delivering great customer experiences.

Could you create change if you knew the strengths and weaknesses of your company compared to these companies?

The MRI assessment provides the golden insights to create change! Contact us now and we will show you how!

2 secrets of Salesforce.com’s success at attracting customers

customerculture_at_salesforce

Jamie Greney, a long standing employee says “In my ten years at salesforce.com, I think one of the most important elements to our success has been the corporate culture. We’ve had a consistent vision regarding the end of software. Three of our top values have been trust, customer success, and innovation.”

Alyson Stone, another company employee says “Depending on how you look at it, resolving a customer’s problem is the beginning or the end of a journey. Companies who decide to put the customer at the center of all business strategies and activities are making a commitment to engagement, yes. But more than that they are making an assumption that each customer is a long-term investment with a high rate of return.”

It is clear that Salesforce’s customer culture is embedded in the business and has been central to its ongoing delivery of value to its growing customer base. Salesforce is on Fortune’s 2012 list of the 100 Best Companies to Work For ranked number 27.

In a report titled “Salesforce’s happy workforce”, David Kaplin describes what happens inside the company.

 “There are plenty of reasons Salesforce is cool to work for: its downtown San Francisco vibe, its matchless end-of-the-year revelry, its embedded philanthropy, and its idiosyncratic leader.”

He quotes Marc Benioff, the CEO, “We achieved our market position by being born cloud,” Benioff writes in his book titled Beyond the Cloud, “but we are being ‘reborn’ social … We need to transform the business conversation the same way Facebook and other social sites like Twitter have changed the consumer conversation and created incredible loyalty — and love.”

Kaplan reports that Salesforce’s new social-networking app, Chatter, functions much like a Facebook inside a company — and helps enhance office culture. Whether on a computer or mobile device, Chatter is dynamic and collaborative — e-mail, by comparison, is static and private. In open groups or news feeds like Finance or Sales, multiple employees can share ideas in real time on projects, analyze data, and compare drafts. “I learned more about my company in a few months through using Chatter than I had in the last three years,” Benioff says.

At Salesforce itself — where there are about 3,000 daily Chatter posts, and internal e-mails have decreased 30% since Chatter went live — there are groups designed to get employees across departments and rank talking to each other about work life, including Tribal Knowledge and Airing of Grievances. Kaplan says you can’t post anonymously, so complaints and queries are rather tame. But it nonetheless generates a degree of cooperation unseen at large organizations.

When you think about it, by providing business software on the web as its core mission, the collaborative model that the company has with its customers engenders cross-function collaboration within each customer as they use the Salesforce software.

Success has many elements, but there are two secrets underpinning Salesforce that stand out:

1)   A Customer Culture as noted at the start of this post, is fundamental to Salesforce’s growth and profitability.

2)   Collaboration across functions and with customers fuels trust and innovation resulting in a happy workforce and more value for customers.

How strong are these cultural attributes in your company? What could you do to strengthen them?

Why global competition means every company must be more customer focused

global competition requires peripheral vision

Global competition is coming to the telecommunications industry in a major way. Yes Skype and others have been around for a long time but direct competition between the telco powerhouses has been slow to evolve.

America’s largest telco, Verizon, is planning to make a push for corporate customers with its secure internet and cloud computing products in the Asia-Pacific region. This move will see it competing head-to-head with Telstra International, the overseas arm of Telstra, the largest Australian telco. Telstra chief executive, David Thodey, recently cited expansion into Asia and more multinational corporate clients as a key strategic priority for Telstra in 2013.

John Harrobin, Verizon Enterprise Solutions chief marketing officer said “We believe that we are positioned to be one of the handful of players worldwide that can serve the mission critical needs of enterprise customers,” The move into the region puts Verizon in direct competition with Telstra, which wants its international arm to sell more global data and telecommunications services to companies with offices around Asia.

Verizon also wants more business with Australian corporations. It already provides telecommunications for some Australian government departments and for companies in the financial services, mining and manufacturing industries. It is also aiming to provide cloud-computing services to medium-sized companies that have only Australian operations,

IT services are moving from an on-premise service to a cloud-based service, and this would be a “massive disruption” in the sector, he said.

For Telstra, this type of heavyweight competition is relatively new and collaboration with new partners in Asia may be necessary. Telstra’s Asian success has been mixed in the past. For Verizon, the Asian markets will pose a new challenge – they will be aiming to sell new disruptive solutions to new customers. This is much tougher and riskier than selling products that everyone understands to customers you already know.

Which company is best positioned to win this battle? Will it be Verizon with its larger infrastructure and resources or Telstra with its traditionally stronger links in Australian and Asian markets? The answer will ultimately turn on the relative strengths of their customer cultures – their understanding of current and future customer needs and the ability of their entire organizations to deliver superior value for corporate customers. Their cultures will need to be resilient enough to understand, adapt to and act on their current and future competitors’ strategies and to have sufficient “peripheral vision” of opportunities that will require product and service innovations.

Do you have a customer culture that enables you to win competitive battles of this type? Does your corporate culture have the “peripheral vision” to identify and act on early warning signals of competitive threats and disruptive market opportunities?

What every company must have to be truly customer focused

Customer Focused Leadership Strength

Many people ask me about the key ingredients to being a customer focused business and ultimately there is one answer, customer focused leadership.

If the senior leaders don’t really get it, it creates a tough environment for those employees that recognize its importance.

Customer focused leadership is not only about understanding it intellectually, which most leaders do (even the most cynical), but behaving in a way that demonstrates customer focus.

Behaving in a customer focused way means bringing the customer’s perspective into every decision. If we change the way we handle customer service what impact will this have on customers? If we increase or decrease prices how will customer perceptions change? If we invest in this IT project what impact will it have on customers? and so on.

Incorporating a customer perspective seems like a simple change to make but unfortunately many leaders pay lip service to customer impacts sending a clear message to their organizations that employees can act in the same way.

How customer focused is your leadership?

6 questions on customer focus every leader must answer

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There has always been a lot of talk from business leaders about being customer driven, customer focused, customer centered in their business activities but what does that really mean?

Here are some key questions and answers to help leaders wanted to improve their organization’s level of customer focus:

1. Why be customer focused?

a. It pays – countless studies tell us businesses with high levels of customer focus sustain a growth path and are much more profitable

b. It’s more satisfying – a pat on the back from a customer makes the hard work all worthwhile

2. How does a customer focused business and team think?

a. It has a shared belief that “what’s best for the customer is best for the business”.

b. The customer is at the heart of all decisions – it is enacted by saying “How will this decision affect the customer; how will it benefit the customer?”

3. What do customer-focused people and teams do?

a. They get feedback from end customers and act on it

b. They get feedback from service provider partners and act on it

c. They gain insights on what bugs customers

d. They understand what will create real added value for intermediate and end customers

e. They realize that it’s the customer’s perception of what is valuable that counts, not their own view of what’s valuable

f. The biggest challenge is for us to gain a customer’s perception of what is really valuable

4. How can we measure how customer-focused we are?

a. Measure what people do in the business that affects the value delivered to customers – adding customer perceived value is a positive; doing non-value work is a negative

b. This comes down to how we behave – in relation to customers and competitors; how we collaborate with each other and our partners

5. What leads to loyal customers spending more and not considering the competition?

a. Personal relationships that create advocates

b. Consistent high value service delivery

c. Continually interacting with customers, listening for feedback, asking, customers how we are doing

d. There is great satisfaction in understanding a customer’s real need and helping them satisfy it

6. Who creates value for customers?

a. Everyone – if you are not creating value for customers, you are draining the business of its potential and future

b. The user experience is affected by everything the business delivers or does not deliver

c. Customers don’t care about your processes, they want a solution to their real problem

d. We should all be focused on solving the end user’s business problem/needs

3 ways to secure senior management buy-in and use it to establish a customer-centric culture

Image from John Kotter's Great Book on the Subject of Buy-in

One of the greatest challenges for customer experience executives is gaining buy-in for investments in improving the customer experience.

Customer experience can seem like a never ending intangible problem that is too hard to deal with given the necessity to focus on driving quarterly numbers.

Unfortunately the result is like driving a car as fast as you can until its empty, at some point the car runs out of fuel and it is crisis time. For a business this means losing customers and losing the ability to attract them back to the business without significant price concession leading to lower profitability.

Creating a customer centric culture is a capability building process for the organization; it is the ongoing improvement and refinement of value for its customers.

So what does this mean for gaining buy-in? Ultimately the leadership needs to buy-in to the idea that shaping the culture in a way that is customer centric is the only way to ensure a legacy for themselves and the company. In short executives with a short-term view will never prioritize culture change as they are already thinking about their next role. Why train for a marathon when you are only running a 5k?

For those executives with a longer-term view, here are 3 ways to get buy-in

1. Link the Customer Experience Strategy to Corporate Strategy and the bottom line

The executive team and the CEO are ultimately responsible for driving profitable growth and return for investors. The corporate strategy for most firms involves growth. Where does that growth come from? Customers.

A customer experience strategy that results in customers staying with the company for longer, buying more and newer products, becoming advocates and reducing the cost to serve will drive growth. If customer experience professionals can show how the customer experience strategy will drive these things they will get executive buy-in.

2. Define the Cost of Quality

What is the impact to the organization of poor customer experience and quality?

  • Customers leave or churn
  • Customer have to call more often to have the needs met
  • Employees leave
  • Brand/image
  • Customer complaints increase demonstrating weakness in organizational performance

3. Data-Data-Data!

  • Determine the propensity to switch, which customers are at risk of leaving and what would it cost if they did?
  • Measure your company’s level of customer centricity and benchmark best in class companies.

7 ways a lack of customer centric culture destroys business growth

Don't let a lack of customer focus cost your organization

Being a business that is focused on real value for customers is often talked about by CEOs but in our experience only sincerely acted upon by a few.

Its not enough to just believe in an idea, one must act to make it happen. A key reason for this failure to act is the lack of understanding of the economics behind customer centricity.

Fundamentally customer centricity is about building a sustainable profit generating capability for the organization but there is also a downside of not acting to create this type of culture.

Here are 7 ways of calculating the cost of a lack of customer focus:

1. The CEO loses touch with the marketplace.

As businesses grow on the back of an original powerful value proposition, success can disconnect a company with the marketplace.

A recent example is Netflix’s decision to raise the price without a perceived increase in value for their customers. The result was the loss of 800,000 customers in one quarter. Let’s assume it cost them $150 per customer, (based on this great case study by Neil Patel of KISSMetrics), that was a $12 million dollar investment wiped out in one quarter. Ok so many of those customers would have contributed revenue during their time with the company but what about the impact on Netflix’s reputation? How much will it cost to attract new customers going forward $175-200?

2. Customers start leaving the minute they have a better alternative

Are your customers “hostages” to your business? Do they have alternatives and if they did would they stay?

AT&T faced this challenge recently when the iPhone was opened up to Verizon. Prior to this transition, market research firm ChangeWave, conducted a survey of AT&T customers that found 26% of them planned to switch.

It is unlikely this many customers would switch but let’s do the math. I will assume each customer is worth $2400 (based on $100 per month – 2 year contract). Assuming they have approximately 15 million iPhone subscribers, 26% represents 3.9 million. So the customers at risk are worth approximately $9.4 million over two years

3. Customers refuse to pay higher prices

Loyal, happy customers will pay more for your products and services. They feel good about doing business with you and get value from what your offer. But there is a risk of loss if you try to increase prices or even hold prices in the face of competition without increasing customer benefits.

Two companies that have experienced this recently are Best Buy and Bank of America.

Best buy are under enormous pressure from the online retailers, specifically Amazon who are turning Best Buy into a showroom for products they sell at a lower cost online. Best buy’s only way forward is to offer more value, provide service customers will pay for, create an experience that is better and keeps customers coming back. To date this strategy has been working but with some recent feedback from a blog post from CEO Brian Dunn it shows they still have a long way to go.

Bank of America recently found out the hard way that customers don’t like price increases without a perceived increase in value. Charging a customer for something they used to get for free is an emotionally charged issue. It is a violation of expectations and Bank of America ultimately had to reverse its decision to start charging a monthly fee on debit cards.

4. Negative word of mouth makes it expensive to attract new customers

Negative word of mouth used to be limited to the spoken word but with social media and the web an integral part of our lives there are multiple places to express our dissatisfaction with companies.

Given we believe what other people say about a company more than what the company says about itself, the influence of negative comments is a powerful headwind for companies trying to acquire new customers. Just ask Vonage.

Vonage had an opportunity to be the “Apple” to “Microsoft” the “Virgin Airlines” to “American Airlines” in the telecommunications world. A high value, low cost alternative to the traditional telephone companies. But since its launch it has come under fire not only for poor quality phone service but has been attacked for its aggressive marketing and poor customer service.

The bottom line is Vonage’s cost per acquired customer went up by 7% in a single quarter during 2008 –  a time when it was plagued with many of the negative word of mouth issues highlighted above. Vonage’s CEO at the time Marc Lefar said the company’s expenses to secure new customers were “not acceptable”.

5. Your best staff leave

When companies lose a focus on their customers, employees lose hope and often the best leaders look for other rising stars.

Companies like Research in Motion, HP and Kodak come to mind. When the best people leave usually their teams are quick to follow and this further exacerbates the problems.

6. Your business stops growing

Businesses that have lost customer focus and become mired with an internal or product focus stop growing. They may have a core service or product that is still in demand but they tread water not able to create new value to either attract new customers or have existing customers buy more.

An example that comes to mind is Microsoft, which has appeared to stand still for the last 10 years after a period of unprecedented growth. Microsoft is clearly still an incredibly successful and profitable business but our expectations have changed, we expect it to grow like Google or Apple or Facebook.

Here is a good article outlining the reason for Microsoft’s stagnation, essentially it is more about expectations and competition than anything else. The market does not believe Microsoft knows how to create ongoing value for its customers better than the competition.

The bottom line for Microsoft is that is has essentially stopped growing relative to its competition.

7. You go out of business

The last outcome of a lack of customer focus is business closure. When companies do not change with shifts in customer demands they fail.

Two examples that come to mind are Circuit City and Kodak.

Circuit City was caught in the middle between the online leader Amazon’s rise and the big box leader Best Buy’s aggressive expansion.

Kodak’s demise has come from a tectonic shift it was not willing to make. The writing was on the wall as soon as their original digital camera project was killed by internal fears of the impact it would have on the film business. So instead of Kodak cannibalizing its own business its competitors did.

The costs of not having a customer-focused business are immense.

As competition increases and continues to filter into every last industry across the globe; the need to have a culture that is willing to shift with the external trends is going to be crucial for survival.

 Ultimately it is the customer centric culture that will win.