Category Archives: Cross-functional Collaboration

Customer Centric Leaders have a Service Focus where Authenticity Trumps Ego

Posted on July 1, 2017 by Dr Linden Brown | Leave a comment

Lars-Bjork-Qlik-970x400

Lars Bjork, the CEO of Qlik, has built the company with a service focus around a “we” Leadership Style.

My father had a particular view of service. You served your customers, your employees, your family, your community and your shareholders. He would employ people fresh out of jail to give them a second chance. He knew his staff and their families and helped them when they needed help. He knew what his customers wanted and needed and trusted his staff to deliver value. He led his business with integrity and authenticity. He was a highly respected and successful businessman. From his background in retail he told me if you do all of these things right “…the profit will come up through the floor.”

Lars Bjork agrees. He has led Qlik as CEO for the past ten years and has been there from its days as a tiny start-up in Sweden to become a world leader in business intelligence software. Qlik was purchased by a private equity firm in 2016 for $3 billion. It now has around 40,000 customers and offices in 26 countries. Bjork says “leadership, for me, is that you serve the team. And the team is the people who work for you.”

How does that operate in practice? Bjork describes it this way.

“I do a lot of town halls and video. People want authenticity, an unscripted sense of ‘this is how it is’. They don’t want to hear packaged BS. They can see that from a mile away. I try to be transparent and share a bit about my private life – because how am I going to learn stuff from people, how are they going to feel comfortable with me, if I don’t share anything?”

He also asks a lot of questions and listens intently to the answers. This has become formalized with a “listening forum”. This occurs where he brings a dozen people together from different sections. He can’t say anything for an hour. They give him feedback, and he just takes it in. He does not push back or dismiss it. This leadership style is one of authenticity and service.

In our current research involving interviews of customer centric leaders I find the most impressive and effective ones are authentic, service focused, and good questioners and listeners. It doesn’t mean they have no ego. They do, but they are essentially team players and do not let their egos dictate decisions. They often do have to make the tough decisions but they do it, like my father, with authenticity and with a “service” mindset.

Learn more about the power of a customer centric culture in our award winning book, the Customer Culture Imperative.

AND if you want to build this capability in your organization check out our MarketCulture Academy.

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Posted in Authenticity, Case Study, CEOs, Cross-functional Collaboration, Customer Centric Culture, Customer Centric Leadership, Customer Centric Values, Customer-Centricity, Honesty, Market Culture in Action, transparency, Trust

Tagged Authenticity, Customer Centric Leadership, Lars Bjork, Qlik

Why Collaboration is Key to a Customer-Centric Culture

Posted on June 7, 2015 by Dr Chris L. Brown | Leave a comment

In our work with large corporations around the world we find that many of them are challenged by a siloed internal environment that works against a collaborative customer focused culture. Yet we know how important cross-functional collaboration is to driving value for customers that leads to superior business performance. Nowhere is it more clearly seen than in competitive team sports.

“Aussie Rules” football is a unique brand of football in Australia in which each team fields 18 players. It is so popular you can see more than 50,000 fans watching the game in many venues each week across the country. A study of the Hawthorn football team in 2014 found that they won their football games irrespective of who was in the team. Injuries and team member replacements did not change Hawthorn’s ability to win. Even when the head coach was side-lined through illness and the assistant coach took over for a period, Hawthorn continued to win. Superior teamwork as a culture was embedded in the team and throughout the coaching staff and administration. It showed out when they demolished the Sydney Swans – a team made up of several superstars – in the 2014 grand final. Hawthorn’s collaborative teamwork and versatility of players who could excel in many different positions on the field is legendary and has made them clearly the superior team in the competition in recent years.

In business, Ikea, the Swedish based furniture producer and retailer is one of the most successful global retailers. Ikea’s former CEO, Anders Dahlvig, puts the collaborative culture as central to the company’s success. He says: “As a company grows, the earlier you build cross-functionality, the more effective you will be.” He goes on to say with reference to Ikea’s quest to build a collaborative customer culture:

“I think the key thing was this: You have to be prepared not to promote strong performers who are great alone but not great collaborators. I see that all the time: people who are good at optimizing themselves, but cannot work with others. It’s really tough to say ‘You have to go’. But if you don’t get rid of these people you will never overcome your demons.”[i]

This is key learning from Ikea and shows it can be done in a business that is integrated from production through to retailing and operates in widely dispersed countries around the world.

[i] Ikea’s collaborative approach is reported in The Customer Culture Imperative, McGraw-Hill, New York, 2014, Linden Brown and Chris Brown, pages 148-149.

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Posted in Cross-functional Collaboration, Customer Centric Culture, Customer Centric Values, Trust

Tagged collaborative culture, collaborative teamwork, ikea;collaboration;hawthorn

Breaking down company silos with internal social media tools

Posted on January 30, 2013 by Dr Chris L. Brown | Leave a comment

In a recent project with a large Energy company, I was working with the senior management and staff to help develop and embed a customer-centric culture. It is their belief and mine (based on extensive research) that a customer-focused business will drive ongoing prosperity. In our research, along with that of many others, we have found that an important factor in enabling a customer culture to become embedded is internal cross-functional collaboration. We found senior and middle management in the Energy company were stymied in their attempts to focus on customers by emails and informational meetings that dominated their work day. Functions were working in silos with very little cross-function collaboration referencing customers and how to increase customer value.

This is typical of so many large organizations.

Don Tapscott, the author of several books on the impact of digitization on our work world, discusses new forms of collaboration in his newest book, Radical Openness: Four Principles for Unthinkable Success.

In an interview in September 2012, recorded in the McKinsey Quarterly, Tapscott described the new social media tools for collaboration:

“How do we get beyond e-mail to these new social platforms that include an industrial-strength social network? Not through Facebook, because that’s not the right tool. But there are tools now: wikis, blogs, microblogging, ideation tools, jams, next-generation project management, what I call collaborative decision management. These are social tools for decision making. These are the new operating systems for the 21st-century enterprise in the sense that these are the platforms upon which talent—you can think of talent as the app—works, and performs, and creates capability.

We had this view that knowledge is a finite asset, it’s inside the boundaries of companies, and you manage it by containerizing it. And this was, of course, illusory, because knowledge is an infinite resource. The most important knowledge is not inside the boundaries of a company. You don’t achieve it through containerization, you achieve it through collaboration.

So, there’s a big change that’s underway right now in rethinking knowledge management. It’s really moving toward what I would call content collaboration, as opposed to trying to stick knowledge into a box where we can access it. E-mail is sort of like what Mark Twain said about the weather. Everybody’s talking about it, and nobody’s doing anything about it. We have to get rid of e-mail.

You need to have a new collaborative suite where, rather than receiving 50 e-mails about a project, you go there and you see what’s new. All the documents that are pertinent to that project are available. You can create a new subgroup to talk about something. You can have a challenge or an ideation or a digital brainstorm to advance the interests of that project. You can co-create a document on a wiki. You can micro-blog the results of this to other people in the corporation who need to be alerted.”

This thinking and these tools apply directly to sharing knowledge about customers and competitors. Effective use of the tools can have a substantial impact on innovation, competitiveness and customer value if they are directed towards sharing across the business a deep understanding of customers, competitors and the changing market environment. This will strengthen an organization’s customer culture which in turn will drive future growth and profitability.

How would you rate your level of cross-functional collaboration? To what degree are you using the new social media tools for internal collaboration? Why not benchmark your level of collaboration and take action to strengthen it?

If you want to build this capability in your organization check out our MarketCulture Academy.

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Posted in Collaboration, Cross-functional Collaboration, Culture Change and Social Media, Customer Centric Culture, Customer Culture and Profit Link, innovation, Innovative Thought, Market Culture in Action, Market Responsiveness Index

Tagged collaboration;innovation;don tapscott;customer centricity;customer culture;cross-functional collaboration

Can Nokia regain its customers and former glory?

Posted on January 24, 2013 by Dr Chris L. Brown | Leave a comment

As Nokia’s new chief executive, Stephen Elop, took over in September 2010, he faced a formidable task: to regain the company’s lost ground in the smartphone segment of the global phone market, especially in the United States, while maintaining its worldwide dominance as the largest maker of mobile phones.

His biggest obstacle, according to Mr. Hakkarainen, a former manager responsible for marketing on the development team, as well as two other former employees and industry analysts, may well be Nokia’s stifling bureaucratic culture. In interviews, Mr. Hakkarainen and the other former employees depicted an organization so swollen by its early success that it grew complacent, slow and removed from consumer desires.

“Nokia in a sense is a victim of its own success,” said Jyrki Ali-Yrkko, an economist at the private Research Institute of the Finnish Economy. “It stayed with its playbook too long and didn’t change with the times. Now it’s time to make changes.”

Elop’s assessment of Nokia in February 2011:

“We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.
“There is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.”
“The Shenzhen region of China is able to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally – taking share from us in emerging markets.”
“Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem.”
“We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally”

During the last 2 years Elop has swept away many layers of Nokia’s previous organisational structure. He has refocused the business on leadership (managers taking decisions and responsibility) and markets (innovation driven by people competing in key mobile phone segments). Decision-making has been delegated to local/national teams rather than relying on decisions by an overly-centralized senior management team. Goals and incentives for the senior leadership team are now more transparent. The new strategy brings clarity and a sense of direction to Nokia.

Nokia’s recently launched new 620, 820 and 920 Lumia Windows 8 smart phone range has succeeded in garnering generally positive reviews. It is changing the perception that the embattled company may yet regain its former glory as the world’s premier mobile phone maker says Ray Shaw who provides a review of the pros and cons of Nokia phones compared with its rivals.

But will this be enough? In order to survive and prosper against Apple and Samsung in the smartphone market, Nokia will need a customer-focused culture throughout its entire business (not just at the front end) to drive innovation and sustained growth and profitability. This requires embedded behavior change that goes beyond restructuring, beyond a refocused strategy and beyond decentralized decision making. It requires a completely new mindset where there is an understanding and belief, translated into behavior, that’s what is best for the customer is best for the business.

Imagine your business faces the challenges that Nokia faces. What would your priorities be?

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Posted in C-Level Quotes on MarketCulture, Cross-functional Collaboration, innovation, Market Culture Inaction, Silos, Strategic Alignment

Tagged nokia; Stephen Elop; customer focus;innovation

Think outside the box and profit from your competition

Posted on December 4, 2012 by Dr Chris L. Brown | Leave a comment

An in-depth understanding of your competitors – their strategies, behavior, intent, how they make their money, how they view your company – is a competitive advantage that can help you increase your market share and profit.

A great story about deep competitor insight comes from Overseas Shipping Services (OSS) – an Australian moving company specializing in moving people’s household goods internationally.

This story comes from a time when a large part of their market still preferred to find information on moving services in newspapers.

For years OSS had run a small ad in the Saturday paper’s “travel” section, while their competition were advertising in the “moving” section. This was based on a unique insight that people who were relocating first organized their travel before considering a moving service. The ad brought in many enquiries, most of which were converted into business.

One day the team discovered to their horror a much larger competitor’s ad right next to the OSS ad.

They had to consider how to respond so they reached out to some connections. One of the team members had a friend in an advertising business so she asked him for some ideas. He suggested simply increase in the size of the ad to match the competitor. He said “you are in with the big boys now you need to start spending more on advertising!” An advertising man suggesting OSS spends more on advertising, what a surprise!

Recognizing there probably was not a quick and easy answer, the team decided to step back and ask themselves the following questions:

What do we know about our competitors? How do they compete? What is our competitive advantage? Are we facing a tactical decision or this strategic? How do our customers’ buy? How would they view two alternatives presented side by side in the newspaper?

The advertising team set-up a cross-functional meeting attended by the CFO, sales, operations, pricing, advertising and the call center to get everyone to weigh in on these issues. Here is what they came up with:

1) How to compete: OSS can’t compete with their competitor’s budget – just to match them requires five times its current budget and this will raise its cost structure for this market segment. What’s more, it might force it to reconsider our pricing. Its knowledge of its competitor’s resources told them that they can spend much more on advertising and still hold their prices where they are.

2) Competitors’ advantage: If OSS matches its competitor’s ad size, it will double the size and will keep doing this if OSS keeps matching. This strategy is based on a traditional dominant competitive position. He competes by out-spending his competitors and relying on his brand name to get business.

3) Customer behavior insight: OSS already knew more about customers than its competition. Another unique insight they had was that customers nearly always get at least two quotes.

4) What to communicate: Now that OSS is in a directly competitive media situation it will need to change its message to ‘get your second quote from OSS’.

5) How much to spend: Since its competitor was now doing the advertising for this market segment OSS could reduce the size of its ad just a little and save money.

The OSS team were tuned into competitors and customers. They could all agree on the comments being made because of strong customer and competitive disciplines embedded in the OSS culture. They all had a clear understanding of the customer’s buying behavior as well as their competitors’ current strategies and how to effectively compete with much larger organizations. They were basing a decision on clear customer and competitor insights.

The decision was made quickly and the call center and field sales team developed a process to obtain ongoing customer and competitive intelligence relevant to this market segment to monitor the effect of this decision. The results were outstanding. OSS received more enquiries from this advertising than before and converted about 80% of them into new clients with a positive trend in sales growth and profit margins.

This example shows how a small tactical decision can have a big impact on the profit and growth of a business. But more, it shows how a team that is tuned into customers and competitors as the way in which they make decisions can make a good decision quickly.

Does your team operate that way? Can they make decisions that are right for the customer and the business, in the context of your competitive position, quickly and effectively? Do you have that kind of creative, collaborative culture?

If you want to build this capability in your organization check out our MarketCulture Academy.

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Posted in Competitor Insight, Cross-functional Collaboration, Customer Centric Culture, Customer Centric Leadership, Customer Culture and Profit Link, customer focus, Customer Insight, Customer Value, Customer-Centricity, Market Culture in Action, Outside In, Sales and Marketing Alignment

Tagged competitor insight; customer insight; competitive strategy;overseas shipping services;oss

8 Ways to Make Customer Culture Change Happen

Posted on November 5, 2012 by Dr Chris L. Brown | 2 comments

Research and experience show there are 4 stages to getting and keeping a customer culture: Initiation, Implementation, Embedding and Reinforcement. In my last post, I outlined the 5 actions to take at the initiation stage. In this one I focus on the 8 actions to take during the implementation stage. Although shown as a sequence, some of these steps will occur in parallel or in some instances in a different order. However, the first step here is clearly the start.

1. Demarcation event – Implementing culture change needs a memorable watershed event where the vision is clear, the stakes are raised, the leader leads, and the experience is emblazoned in people’s minds. Usually a major Town Hall event, this must be skillfully executed to maximize staff engagement. The goal here is to get public buy-in from the senior leadership team and generate momentum.

2. Development of values and norms – The desired new culture needs to be made real. People need to see it, “feel” it and emotionally connect to it. They have to see it will benefit them and they need to have the skills and confidence to enact the new behaviors. In Virgin Trains in the UK, small cross-function teams worked to develop meaning to the values identified by their leadership and what the norms meant in everyday work practices.

3. Customer mindset and skills workshops – A large sample of staff attend workshops to help them understand what a “customer mindset’ is and practice behaviors that make customer culture tangible and relevant. Often workshop participants are cross-functional to reinforce the customer mindset and importance of organization wide delivery of value to customers. In large corporations, workshops may start with the top few hundred leaders, then cascade into their teams.

4. Cross-function collaboration – Teams work together cross functionally to strengthen customer focus. Cross-function work teams come together to create or strengthen systems, tools and processes to increase customer engagement. These might include processes such as user testing during the new product process, customer feedback systems and tools to improve value at customer touch-points found to be lacking.

5. Market alignment – Several activities are initiated to reconnect with customers and the marketplace. These include customer Immersion (the subject of an earlier blog) of executives and non-customer facing people, customer research, customer co-creation activities and improved customer communication approaches.

6. Communication – What people see and hear needs to create a sense of fun and excitement for them to connect with the new cultural expectations. Stories are the conversations that create shared experiences and produce a common cultural bond between people. This is reinforced by communication of quick wins and shared stories at mini-town hall meetings and by internal social media.

7. Rewards and recognition – Leaders use public forums to recognize and reward people who are taking a lead in adopting the values and norms in their work to deliver more value for customers. The most powerful recognition is interpersonal with senior leaders showing approval, support or disapproval of employee actions or comments at particular venues such as mini-town halls and corporate events.

8. People changes – At some point coaching dissenters and blockers of change ceases and their removal becomes the focus, including the senior leadership. At the same time hiring criteria and orientation training of new staff reflects the new values and norms and infuses customer culture and relevant customer engagement skills.

My next post will outline the actions required to embed the customer culture as the normal way of conducting business.

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Posted in Cross-functional Collaboration, Culture Change and Social Media, Customer Centric Culture, Customer Centric Leadership, Customer Centric Values, Customer-Centricity, Market Culture in Action

Tagged customer culture change;customer focus; customer focused leadership; change management' marketculture development

Product Centric Versus Customer Centric – Does it matter?

Posted on October 1, 2012 by Dr Chris L. Brown | 6 comments

A product-centric organization is one that is focused on the products it brings to market rather than the customers that buy those products.

It looks to develop new products by leveraging technology or specialized skills that exist in the company. It starts by looking internally at its capabilities rather than externally at what needs are not being met.

The chart below is a simple comparison of the two approaches:

In large complex organizations, a product focus provides management with a direct line of sight into which products are selling well, at what profit and clear product owner accountability. While it does simplify the management of a firm it does come at a cost. It tends to create siloed organizations that compete for customers and often lacks a coordinated approach. In fact, many of the poor customer experiences happen as a result of this internal/product focus. The other downside is a myopic vision of the market that blindsides companies to key changes.

What business are you in?

Product-focused companies define themselves by their products. For example, Kodak originally defined its self as being in the photo processing business. This definition impacts the culture of the company in a way that hamstrings thinking and creates impediments to action. When the shift to digital came Kodak resisted this because of the impact on its “products – photo processing”.

The classic example of this is the “Last buggy whip company” the company that made the best buggy whips in America! It just failed to see the car was coming to obliterate its market.

The future for companies is to balance this product focus with a customer focus so that customers feed directly into decision making and are not an afterthought.

What trends are affecting the way your customers solve their problems?

Does your organization suffer from excessive product focus?

Learn more in the MarketCulture Academy

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Posted in Cross-functional Collaboration, Customer Centric Culture, customer focus, Customer-Centricity, Peripheral Vision

Tagged customer culture, market responsiveness index, product centric versus customer centric; internal focus versus external focus; product focus versus customer focus

4 ways customer centric leaders demonstrate they care

Posted on September 25, 2012 by Dr Chris L. Brown | Leave a comment

It is a well known fact in the marketing world that many customers decide to do business with other organizations simply because they believed the company did not care about their business. It’s a feeling, not a product characteristic or benefit deficiency that can often drive customers away. On a purely rationale level it makes no sense, they got what they paid for, why not continue doing business with the same company?

This same concept undoubtedly applies to the leadership of customer centric organizations. Leaders that really care about their employees and their customers demonstrate this through their actions.

Some great lessons come from Rick Silva, the CEO of a quick service restaurant chain called Checkers and Rally. Based primarily on the East Coast and South of the United States the chain first came to my attention through the show “Undercover Boss”.

Lesson 1: DEMONSTRATE you actually CARE.

“People are our most important asset” is a cliche often used by many leaders but it is not usually followed up with specifics. If people are your most important asset what are you doing to demonstrate that? What culture have you created, are people respected for the value they bring? Is collaboration seen as an important capability that is role modelled from the top?

Rick Silva was undercover at one of his 200 restaurants when he observed the manager of the store barking orders at staff, the environment was tense, one based on fear rather than hope. Rick could tell pretty quickly the culture in that store was toxic. He decided to shut the store down then and there.

Lesson 2: If its NOT GOOD ENOUGH for CUSTOMERs stop doing it and GET IT RIGHT!

The other side of the story is the impact on customers, Rick could see the results first hand of a poor store environment. In his case this meant slow service, poor quality food and lack luster customer interactions. Basically in the quick service restaurant business if staff don’t want to be there eventually customers won’t want to be there either.

Lesson 3: Give your employees WHAT THEY NEED TO BE SUCCESSFUL.

The next day Rick visited a new store, one with a high energy customer focused manager. She would go out of her way to make sure customers were happy but was hamstrung by something as simple as an intercom system that actually worked. It was almost impossible to hear the orders from customers on the intercom, something Rick experienced first hand while working to drive through ordering system.

Lesson 4: PEOPLE WANT TO BE HEARD.

Be brave enough to solicit and act on feedback. Many leaders are afraid to get honest feedback from employees, they don’t want to open a “can of worms” or distract them from their work. The reality is employees want to be heard by their leadership. Our company conducts many internal surveys and interviews as part of our consulting practice and it is amazing to see the participation rates and length of open ended responses we often receive.

Rick Silva in “Undercover Boss” was told by one of his employees that staff on the shop floor should participate and be rewarded for a job well done in the same way managers were recognized. Rick listened, recognized that the need made sense for employees and the business and took action to build an incentive program for all employees.

Are you willing to listen and take action?

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Posted in C-Level Quotes on MarketCulture, Cross-functional Collaboration, Customer Centric Culture, Customer Centric Leadership, Customer Experience, Customer Satisfaction, Customer Service, Customer-Centricity, Employee Engagement, leadership, Market Culture in Action, Market Culture Inaction

Tagged customer focused leadership; customer centricity; Customer focused CEOs; Rick Silva

How Ford broke down silos and reinvented itself

Posted on September 24, 2012 by Dr Chris L. Brown | Leave a comment

Ford reported a loss of more than $14billion in 2008 at the height of the financial crisis. Like many businesses at the time it was caught off guard by the speed and severity of the collapse. However the US car industry had been under pressure from overseas competition for many years leading up to that point.

Their strategy of focusing on big SUVs and Trucks was unwound quickly by a consumer stung by high gas prices and the economic collapse. Fuel economy had suddenly risen up the list of consumer preferences. Ford responded quickly by placing bets on smaller cars like the new Ford Focus and Ford Fiesta, the Focus recently becoming the number one selling car in the world.

The key to the turnaround

A major part of the Ford turnaround was CEO, Allan Mulally’s strategy known as “One Ford” launched in 2006 when he took the reigns. By many accounts, toxic divisions in the executive ranks were ripping Ford apart. Like so many political partisans, they cared little for the success of the company — only for winning themselves and beating their internal opponents. The silos that developed competed in a way that was destroying employee engagement and dragging the company into the abyss.

Mulally even insisted that all workers be issued laminated cards with the turnaround motto: “One Ford, One Team, One Plan, One Goal.” He recognized the need for Ford to focus on a common constituent, the customer, and stop the internal naval gazing and drive towards this common goal.

Customer centric companies rally around a single goal, creating maximum value for their customers. This focus eliminates silos and requires high levels of cross functional collaboration, transparency and accountability.

Last year the company earned $8.8 billion, the outcome of the strong leadership of Mulally and his ability to transform Ford’s culture to once again focus on creating the best value cars in the world.

Below is a video on how we see customer centric transformations, it is “the story of one”

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Posted in Cross-functional Collaboration, Culture Change and Social Media, Customer Centric Culture, Customer Centric Leadership, Customer-Centricity, Market Culture in Action, Ownership

Tagged ford's turnaround; customer centric culture; cross functional collaboration; marketculture

Customer Metrics: Measure what matters most to customers

Posted on September 13, 2012 by Dr Chris L. Brown | 10 comments

As business leaders we tend to pay a lot of attention to the metrics important to the business, that is, revenue, cash flow, profitability, growth and so on… but the real drivers of these business outcomes are customers.

So the obvious question becomes what customer metrics should I be tracking to make sure my business metrics continue to head in the right direction?

Well there are a number of key customer metrics that must be considered for every business:

1. Customer Satisfaction

As a first step it is important to track customer satisfaction, this will provide some inputs as to how well the business is performing on delivering what it promises. But remember customers have already paid for satisfaction, they expect to get what they paid for. So high levels of dissatisfaction are an obvious and immediate cause for concern.

Satisfaction is not enough, even highly satisfied customers can and do switch to alternatives so it is important to also look at Loyalty and Advocacy. That brings me to the next question (Fred Reinhold calls the “Ultimate Question“) How likely are you to recommend us? Loyal customers not only bring you repeat business, they also expand your customer base through positive word-of-mouth.

2.Net Promoter Score

The net promoter score is a simple tool designed to identify 3 types of customers, promoters (advocates with strong positive word of mouth), detractors (negative word of mouth) and those in the middle. The goal is to drive up the number of promoters as a way of driving business growth.

Many of the most customer-focused businesses in the world use NPS, see below a list of the current top 10 Netpromoter scores in the US:

USAA – Banking = 87%
Trader Joe’s = 82%
Wegman’s = 78%
USAA – Homeowners Insurance = 78%
Costco = 77%
USAA – Auto Insurance = 73%
Apple = 72%
Publix = 72%
Amazon.com = 70%
Kohl’s = 70%

Source: Satmatrix

3. Customer Value Analysis

This is a more advanced metric specifically looking at the value a customer places on what you offer. Value consists of an equation that includes CUSTOMER PERCEPTIONS of price, service and product quality. Customer value analysis looks directly at how customers view your business vs. your competition and provides you with valuable information on what you might need to adjust in terms of both product and service quality, as well as price, to increase market share and revenue.

4. Life Time Value of Customers

I talk about this in some more detail in these two posts:

Part 1: Understanding Lifetime Value of Customers

Part 2: Calculating Lifetime Value of Customers – a simple example

Something not covered however was some of the inputs to Customer Lifetime Value which in themselves are useful metrics:

Customer Acquisition metrics include customer awareness levels, the information sources customer use to make purchase decisions, and cost of acquiring a customer.

Churn (%) measures how many customers are leaving, that is, customer attrition. Churn is a commonly used metric related to customer retention. Specifically, this is about knowing how many customers are defecting and why.

Customer Complaints are usually an early warning signal that something is wrong. Most customers will not complain they will just take their business elsewhere. Complaints although often difficult to hear are a gift that can help course correct.

5. Your own Customer Culture

How customer obsessed is your organization? How would you know?

This is the question we received from a CEO of a Global 1000 company a number of years ago. It led us to the development of the Market Responsiveness Index (MRI) to answer that very question.

This is an organization-wide metric design to measure the behavior of employees and the level of attention they pay to customers in their daily work.

It is a one of a kind tool that allows you to benchmark your company versus the best in the world, you can check it out here.

What Criteria should I use when deciding on Customer Metrics?

The metric drives business results
The metric correlates strongly with business results
The metric is something you can influence
The metric can be measured accurately
The metric can be measured consistently
The metric can be measured cost effectively
All the stakeholders agree the metrics meet these criteria

Ultimately you want to choose the right metrics for your specific business, they should be tailored to the unique business drivers and business strategy.

Why implement customer metrics?

Tracking customer metrics is important for many reasons, but the most important reason is cultural. It gets everyone on the same page, aligns people across the different parts of the business, and leads to a customer-focused culture of success. You should celebrate wins when a key customer metric reaches a new and important milestone. Choosing the right metrics and celebrating progress against them are incredibly important to building a strong customer culture that can work together and grow rapidly.

What customer metrics are you using?