Category Archives: Customer Centric Leadership

A Customer-Obsessed Culture is like employee engagement on steroids

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Can you imagine a business where everyone connects with its true purpose and gives the very best of himself or herself every day to deliver on that purpose?

What an awesome place that would be to work! And wouldn’t you love to be their customer!

Unfortunately, there are only a few organizations like this in the world today. However, the good news is that many more companies are actually aspiring to be that way.

I don’t care what business you are in; you must foster a new operating model to be successful in today’s business environment.

What makes it different?

The old school autocratic, all-knowing CEO is out, the age of talented teams focused on customers is here.

We call this customer culture, an environment where teams of people work together to deliver unique, valuable customer experiences.

The evidence for the need to create this type of culture is everywhere, all around us.

Nowhere to hide.

Companies can no longer brush poor customer experiences under the carpet, there is a large and vocal customer constituency that will voice their opinions and these will influence whether or not others are interested in your products and services.

Purpose matters.

The days of people turning up for work for a paycheck then turning off is gone. If you spend more than half of your living hours working it had better be for more than just a paycheck.

More than ever before younger workers are looking for meaning in their work, why am I doing this? Where is the meaning?

Customers want to know why you do what you do.

Simon Sinek has recognized that consumers today care about why you do what you do as much as what your offer. If you are just in business to make money for shareholders, I think you will find it a tough environment to compete in. Do something to improve my life, the life of our community, the world or the environment…

Employee Engagement is not enough.

While employee engagement is important, it is simply not enough.

For organizations to succeed they need engaged employees that are directing that energy and passion towards solving problems for their customers.

In fact, we have found engaged employees are the result of good leadership (fair consistent, transparent, inspirational), a strong culture and people doing meaningful work for their customers.

You can’t make someone engaged in their work but you can create the environment (culture) where it is much more likely to happen.

Your call to action:

For 10 years MarketCulture has helped leaders around the world understand how to engage employees in building a customer-obsessed culture. The MRI Assessment provides valuable feedback to leaders that they can act on to enable employees to deliver great customer experiences.

MarketCulture has proven scientifically that a stronger customer culture will drive increased business performance through retention of customers and increased advocacy.

Find out how to help your company become more customer obsessed  in our MarketCulture Academy.

Why being customer obsessed pays! Lessons from the CEO of massively successful startup Naked Wines

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Luke Jecks, the Former CEO of Naked Wines, founded and led an online wine business that operates in the US, the UK, and Australia. The company connects wine lovers with boutique wineries and uses a subscription model where “angels” – consumers who pay a monthly subscription to help fund the winery’s next vintage – are able to order their favorite wines and pay for them from their subscriptions. It is a customer-funded wine business.

I asked Luke how this came about.

He replied: “The most important thing in the wine industry is that the only way this online business could work would be if we could have consumers that were “sticky” to the business. If we could get loyalty in perpetuity we would not have to be a business that is constantly out there chasing new sales. Instead what we could do is invest in loyalty in the consumer and if we did that we would have a sustainable business.”

“So we needed a model that did not trap consumers but made them want to stay. So the questions we had to answer were: How do you reinvent the wine club and its benefits with a subscription that had no cancellation fees, had no minimum period of membership, you could walk away at any time, and any money you put into the subscription you got back?”

“We found that a segment of wine consumers need to see a choice, a benefit, a feeling of being in control and where they feel they can connect with the values of the business. We felt that to keep customers in the long term we needed to make them feel proud – because they mattered and were part of the key wine choices being made and understood their role in making the business a success and the winemakers successful. Also proud because they feel they are doing good through the stories behind the winemakers that can’t happen without them”.

I asked Luke how this relates to customer-centricity. He said: “To me, you must have an “attract” model and not a “trap” model. It is a model where the customer plays a vital part in the success. So it is important for us to measure the customer lifetime value – that is how long they stay with us and how much they spend. That is much more important than today’s transaction. We believe that if we can get loyalty, we will get sales. We tested this by sending “high engagement” emails to half our consumers and “buy” emails to the other half. It turned out that the “engagement” emails created loyalty and those consumers bought more. We asked our consumers to rate their happiness with us. We found that people who rated us 5 stars (90%-100%) had much bigger lifetime value. So we set about investing to get 90%+ ratings by putting more people in the business, paying our staff more, investing in career programs for our staff and empowering them to empower our customers.

I asked Luke what has been the result. He said:

“From a standing start 5 years ago Naked Wine now has more than 100,000 angels. But more important than this number is the high level of loyalty. This has created a growing, profitable and sustainable business.”

A truly customer obsessed business has loyal customers that buy from you because they want to – and stay with you because they see that you care and that they are important. It is a business, like Naked Wines, that invests in and empowers its people to fully engage with their customers to create great customer experiences. This translates into increasing customer lifetime value. Sustainable profit and growth follow.

Hear more from Luke in this previous post – “What is the kryptonite for disruptors?”

Learn more about creating this culture in our latest book, the Customer Culture Imperative.

Are you an obsessive member of the Secret Squirrel Club?

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“We are not members of the Secret Squirrel Club”, says Peter Cooke, President of Wright Medical International. This was in response to my question about the leader’s role in customer engagement. In a meeting last year Peter and I were talking about customer-centric leadership. He went on to say “ that in order to create alignment between leaders and our employees to do the right thing for customers we must trust them with all the information they need to create a great customer experience – don’t keep it a secret. This includes financial progress of the company and the latest innovative initiatives occurring in different parts of the world.”

Peter continues “To do this we need a depth of competence at the top with leaders that have a high willingness to collaborate. We continually communicate the 3 or 4 key themes – we call them the vital few – to all employees in the business and the leadership team stands behind these themes and cascades them throughout the company and infuses them at every level.

Customer Centric Leadership Traits - TRUST

I asked him why employees are so important and leaders must avoid falling into the trap of not sharing information and becoming a member of the ‘secret squirrel club’. Peter replies “Success in business comes about by making the customer feel special. It’s that human contact that hooks you in as a customer. That’s the essence of customer engagement. To me, people buy from people. That’s what makes a difference. That’s why we are working on strengthening our customer engagement and aligning a collaborative culture at Wright Medical International to do what’s best for the customer and show that we really care.”

When you think about it, even in this digital age, when customers have a problem they are comforted by a human voice – whether it be by phone, through a chat function on a website, or even better, a face-to-face interaction. The moments of magic for customers are ultimately created by people. This can only occur if everyone in the business is aligned with what customers need and how a great customer experience is delivered.

If it’s kept a secret – that is, information and experiences are not shared – your employees become dissatisfied and your customers and business suffer the consequences.

Learn more about why a customer-obsessed culture pays in our latest book, the Customer Culture Imperative.

…AND Learn how your can transform your company’s way of doing business in our MarketCulture Academy.

Customer Obsession: Its a Mindset! Here’s one senior leader’s take on it.

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I have known and worked with John Stanhope over many years. John had a long career with Telstra culminating as CFO. He is now Chairman of Australia Post. Ever since I have known him he has had a customer mindset. Almost an obsession!

When I spoke to him about the mindset challenges in today’s business he said: “Today the focus must be on ‘customer innovation’. Many companies focus on innovation, but it is customer innovation that counts. At Australia Post our customers want their parcels anywhere, anytime, so we ask: How can we provide a great delivery process that gets better and better over time and do it profitably? Innovation must occur to meet our customer’s need and expectation of ‘anywhere, anytime’.”

He says all leaders must have a mindset that is externally and future-focused. This includes foresight and peripheral vision with future customer needs and changes in customer behaviour as central. This is what drives customer innovation.

To develop this mindset leaders must have a relentless pursuit that everything is about the customer. John says: “There are little signs that tell you. At the start of a meeting ask – Is this about our customers? If not, don’t have the meeting. Another key sign is ‘language’.  How do you frame a problem or an issue? Is it framed in terms of the customer or not?”

I asked John how you get this mindset. He says: “ There are many factors, but I think a key one is that you must immerse yourself with customers. Ask them questions, listen to what they say, observe their behavior and then put yourself in the customer’s position. If I were the customer, what would I want to solve this problem? How would I like to be treated? That applies to anyone in a business no matter what level and what function.”

In every company that is continually successful at innovation, there are leaders and employees that have a customer obsession mindset. Like Amazon, that has developed a customer-obsessed mindset and a customer culture to match, this is required for sustainable success.

The only way to future-proof your business, your leadership or your team is with a strong adaptable, innovative customer culture.

Learn more here

The reason what they teach in business school is wrong and why a customer-obsessed culture is the only answer

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Many of today’s senior leaders were educated in an era where business school professors told them the sole purpose of a business was to create value for shareholders. This, at a time when only a few voices professed what revered thinker and writer, Peter Drucker, proposed that the purpose of a business is to create customers profitably. The two mindsets are complete opposites.

I recently watched the Netflix series: Dirty Money. It investigates three cases of big corporations where the only consideration by their senior leaders was the creation of shareholder value and their own bonuses at any cost.

Volkswagon was proven to have initiated and perpetuated (by senior leaders) built-in software to falsify carbon emissions in order to make claims about their cars to enable them to grow their business in the US with diesel-fuelled vehicles. Even when proven, senior leaders were in denial until indicted by the US government.

HSBC turned a blind eye to money laundering by the Mexican drug cartels through their banking network. Despite being castigated in US Senate investigations and regulators over a decade, there was no effective action taken and finally, the company was fined almost US $2billion with an admission to serious charges. This was a willful disregard of the consequences of their actions (or non-action) to achieve their profit goals at all costs.

Valiant Pharmaceuticals embarked on a merger and acquisition strategy to buy drug companies with unique monopoly brands as a basis for growth. Once acquired the prices of these life-saving products were hiked to levels where consumers could not pay for them – with life-threatening consequences. The CEO’s one stated aim was to create value for shareholders.

The senior leaders of all three companies gave no thought to the consequences for their customers and the community. In fact, they saw them as irrelevant. Excessive pollution from cars is a prime cause of the premature death of many consumers. Enabling money laundering financed drug lords and the associated violent deaths of innocents in Mexico and the drug habit in the US. Hiking pharmaceutical drug prices 10 or 20 fold over a short period created havoc and misery for many consumers with life-threatening illnesses. All of this because the senior leadership mindset and corporate culture were focused only on profit and their own bonuses.

I have heard this in many large businesses where people down the line tell me that the only concern of leadership is to meet profit goals at any cost. That cost is often lost jobs, unhappy and disengaged employees and frustration and disgust of customers.

Yet we know that the leaders of today’s most successful, modern large businesses have a totally different mindset. It is best illustrated by Jeff Bezos, who from day 1 at Amazon has built a culture around customer obsession and a focus on continually improving the value and experience delivered to its customers. He has never wavered from this mindset despite criticism at different times. What is the result? It is the most valuable and sustainable business on the planet – with a history of little more than 20 years.

We are starting to see this mindset in other leaders of long-established businesses. Richard Branson at Virgin is one. Paul Polman at Unilever is another. These leaders take the view that “what’s best for the customer is best for the business”. They truly believe that by creating a customer-obsessed culture in their leadership and employees they will deliver superior value to their customers and for their communities. And by so doing they will achieve long-term profitability and sustainability in their businesses as well as personal rewards and happy employees. They take a longer term and future-oriented view in their decision-making and their behavior.

This is foreign to many senior leaders and there is a lack of experience as to how to do it. In our research of more than 50 customer “obsessed” CEOs around the world and more than 300 businesses we now have a measurement tool that can create this mindset, benchmark your business against the best in the world and set out best practice steps to move you to the next level – a level that will be required for survival and success.

This is the secret to delivering powerful Customer Experiences that only a handful of CEO’s know about!

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Why engaged customer-focused employees are vital to business success!

In today’s market, the majority of companies have very little to differentiate themselves from their competition. Their product and services are very similar if not identical. It is so easy to change to another company that it can be done in minutes or even seconds on the web. Social media can instantly let millions of people know what just took place. Customer expectations have changed and their demands are greater than ever.

Future business performance and sustainability will come down to whether or not customers continue to use your products and services or leave for an alternative supplier. It costs 7.5 times as much to gain a new customer yet the majority of companies spend their budgets on attracting new customers. What are you doing to retain your current customers?

MarketCulture’s purpose is to help companies recognize the importance of building stronger customer experiences that retain customers. We believe that inspired, engaged and empowered employees focused on customers are vital to success. It comes down to how the company delivers on its promise and ultimately it is all employees that make this happen. It takes one bad experience and you have lost a customer.

As leaders do you truly understand what your employees need in order to deliver a great customer experience? Are we telling them what to do or are we engaging them in what they believe is important? Richard Branson says that engaged and happy employees deliver superior customer experiences. Virgin enters markets where customers are dissatisfied. They quickly win a strong market share by providing great service with a touch of magic. Employees want to be part of the solution and feel that they belong. They want to be listened to and feel that their feedback contributes to the success of the business. Your employees are the ones that retain or lose your customers.

Companies today implement many tools that measure either employee engagement or customer satisfaction. They allow leaders to know whether or not they have happy/unhappy employees or satisfied/dissatisfied customers yet they rarely provide insight into how they can improve. Leaders need to understand what employees need to deliver the company’s promise and customer satisfaction.

“There are many ways to center a business. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality.” Jeff Bezos – Amazon Founder and CEO

How do we engage employees to build stronger customer experiences?

Customer experience comes down to the way your company and employees behave – whether you deliver or not on your promise. It can be as simple as responding to a customer in a timely fashion or just the tone of your voice. Amazon is now one of the biggest companies, yet they have retained a strong focus on their customer experiences even as they have grown to employ more than 300,000 people. The test of a company is not when things go well but when they don’t. Customers are looking to receive the value they paid for or they will simply try an alternative supplier. Where do you start building a stronger customer experience? You can start with the customer and find out whether or not they are satisfied but that is after the event has occurred and maybe too late. Alternatively, you can start with those that create the experience – “the employee” – and find out what they need in order to be able to deliver a great customer experience.

Steve Job’s recognized this towards the end of his time as CEO of Apple when he said:

“It’s not about me, it’s about the company and it’s about the cause. It’s not about everything being dependent on me. I have to build a culture, I have to think about a successor, I have to think about setting this thing up to do well over time. And in the end, what matters is, I want Apple to be an enduring great company and prove it didn’t need me.”

How do we do it? – It is simple. Listen to your employees, find out what is important to them, engage them, act on their feedback, empower them to solve customer problems and they will deliver better customer experiences.

MarketCulture researched 100’s of companies across the globe that exhibited both customer-centric decision-making with employees empowered to deliver great customer experiences. Some of these companies included Amazon, Google, Virgin, Apple, and Ikea.

The research revealed 8 disciplines that employees act on to deliver great customer experiences. We found these disciplines used across the entire organization including all support functions. This was not evident in companies that deliver inconsistent customer experiences.

Through both quantitative and qualitative employee feedback companies are able to act on strengths and weaknesses in order to support employees in delivering superior customer experiences.

What – A unique employee assessed customer engagement measurement tool.

Where do we start? The first step is to discover what is important to the employees in order to provide a better experience for customers. To do this we need to engage the employees and gain their feedback. The Market Responsiveness Index (MRI) is a unique assessment tool that all employees, including leaders, complete. The MRI has quantitative (scaled questions/benchmarked) as well as qualitative feedback (verbatim comments). This will identify the strengths and weaknesses of your company against companies that use best customer-centric practices. This will create change and build future business performance through the retention and growth of customers. Studies have shown that companies with Customer Centric practices outperform the others.

What is the Market Responsiveness Index (MRI)?

The MRI is a web-based employee assessment, requiring 15-20 minutes to complete, that benchmarks employee behaviors within your business against the most customer-centric companies in the world. This translates into 8 key disciplines all with a strong focus on the customer. These are Customer Insight, Customer Foresight, Competitive Insight, Competitor Foresight, Peripheral Vision, Cross Functional Collaboration, Empowerment and Strategic Alignment. Your company’s performance in these disciplines has been shown to drive future customer satisfaction, revenue growth, and profitability.

The MRI will provide key benefits to your company.

1. Momentum, Engagement and a New Mindset: It will create focus and momentum for a Customer Centricity initiative across the business and can be used to drive the embedding process.

2. Measurement: It is designed to provide the basis for benchmarking and measuring progress on those customer-focused behaviors that drive customer satisfaction, advocacy, revenue growth, profit and plans for individual managers to drive improvements.

3. Gain Insights: Hear directly from employees on the key issues holding the organization back from being more customer-centric in specific areas and across the entire business.

4. Tangibility and Communication: It makes customer culture tangible for all staff by identifying relevant activities that support business strategies. Through its methodology and measurement process, it facilitates communication of clear priorities.

5. Gain broad employee involvement: It provides staff with an opportunity for input and direct engagement in Customer Culture initiatives and a forum for agreeing with actions to be taken and a feeling that they are a key part of the journey and contributing to its success.

6. Build a common language across the Business: It also acts as a tool for ensuring staff within the business “get it” and develops a common language and behaviors from Customer Culture initiatives. It forms the basis for ongoing discussions and actions deep within each functional group which is where the ultimate success in embedding customer culture will be determined through collaboration.

7. Accountability: It provides customer-centric behaviors that can be included in the Key Performance Indicators of managers and their teams.

8. Benchmark: It provides the business with a benchmark against some of the world’s most customer-centric organizations. How do you compare with companies like Amazon, Apple, 3M, Virgin and others included in the database? The current database includes more than 300 corporations globally across B2B and B2C and several hundred business functions and units.

Interesting in starting your journey to a customer culture? Learn more here.

This is why every business should have a “Minister for Foreign Affairs”

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Recently I interviewed Annalisa Gigante, a Board member of ZIS (Zurich International School) and former Head of Innovation at LafargeHolcim. We were talking about customer-centric leadership and Annalisa suggested that companies could really benefit from a “Minister for Foreign Affairs”. She said today “we need to know what’s going on with the rest of the world.”

I thought about this and realized that the amount of disruption we are facing in our businesses and work lives suggests that we can gain better context on what’s happening, make better decisions, and have a better chance of benefitting from it if we do what she suggests.

In our research and work with companies wanting to become more customer-centric, we have called this factor: Peripheral Vision. That is, the externally focused “wide vision” activities carried out to understand the likely impact on the future business from changes in technology, society, economy, political and legal, and the natural environment.

Many companies seem to have a “Minister for Foreign Affairs”, but like we see in politics, often the learnings and potential impacts of these insights are not widely shared – and consequently not acted upon. In practice, peripheral vision should be built into future business strategies. But in our experience, it is frequently missing.

If you want to know how you can identify if your “Ministry of Foreign Affairs” is effective, find out about how our MRI (Market Responsiveness Index) can help you.

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

Is there a customer-centric gene?

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Recently I was talking with Dmitry Pukhov, co-founder and owner of a very successful event catering company in Moscow. When I asked him about customer-centric leadership he said the core characteristic is a desire to help people that comes from the heart. He said he believes that we all have a gene that can create a drive to provide service to others. But only some people have developed this gene – through their upbringing, experience, interaction with others who use it and mentoring from customer-centric role models.

There is some scientific evidence to support this. Research shows that people who are more caring and compassionate towards others share a common gene variation linked to the receptor for oxytocin (sometimes referred to as the “love” hormone) that plays a key role in the formation of social relationships and impacts our capacity for empathy. The science suggests that those with the “GG” variant of this gene are better with people and generally more caring.

But all is not lost for those of us that don’t have the “GG” genotype. There is also evidence to suggest that compassion and empathy can be developed through socialization with people that role model it and experiences that elevate it.

I asked Dmitry why his business is so successful – it has grown rapidly over the 12 years since he founded it – and he told me it is because being customer-centric and service focused has always been the driver in his business. He recruits people that exhibit the customer-centric gene and invests in the ongoing development of the gene in all his staff.

Are you using your customer-centric gene or is it dormant? If you want to know what to do to develop it, refer to our book: The Customer Culture Imperative.

This is how to become the answer to your customer’s prayers

Pope Francis at general audience

The simple answer is to make sure you know what they are praying for!

We call this customer insight. In other words, what are your customer’s needs? What are they trying to accomplish and how can you help them achieve it?

While you as the leader of your organization might have these answers, can everyone in your organization answer these questions? Really great organizations have clear answers to these questions and are aligned and empowered to deliver the experience customers value. Their leaders are what we call customer-centric leaders.

Is the Pope a customer-centric leader?

My co-author, Linden was surprised recently when he spoke with a CEO of a multinational business this month and asked him who came to mind as a customer-centric leader. He immediately answered: “the Pope”! Linden said: “Tell me more”.

He then went on to tell explain that a customer-centric leader must be prepared to take risks and he or she must go out and meet with customers and spend meaningful time with them questioning and listening. This type of leader must be prepared to be challenged and also to challenge the current status quo and visit customers in the most difficult markets. This person needs to be authentic with customers and employees through an ability to communicate personal experiences that are relevant and create belief in their followers. He said the current Pope does all these things. He travels widely across different national cultures, talks with his “customers”, takes risks particularly with personal safety and is prepared to question current dogma in the Catholic Church. He comes across as an authentic person with those he meets and how he communicates to the world at large. It got me thinking. Can we learn something from the Pope about customer-centric leadership?

This type of leader must be prepared to be challenged and also to challenge the current status quo and visit customers in the most difficult markets. This person needs to be authentic with customers and employees through an ability to communicate personal experiences that are relevant and create belief in their followers.

He said the current Pope does all these things. He travels widely across different national cultures, talks with his “customers”, takes risks particularly with personal safety and is prepared to question current dogma in the Catholic Church. He comes across as an authentic person with those he meets and how he communicates to the world at large.

It got us thinking. Can we learn something from the Pope about customer-centric leadership?

The key reason why Customer Centric Leaders can build billion dollar companies

One word. Empowerment.

As a leader it is not easy to “let go”. I find it a real discipline to delegate and enable others in our business to do it their way and to do what’s right for the customer. So many leaders rely on processes as a security blanket that enables them to feel comfortable with what is happening in their business.

But we can take a lead from Tony Collins, former CEO of Virgin Trains in the UK, who told me:

“I put my trust in people not processes”

Tony presided over the transformation of Virgin Trains from an internal oriented public service mentality (when Virgin took the franchise from British Rail) to a customer service culture with customer satisfaction levels and profitability as benchmarks for the European rail industry. This approach empowers people and teams to make their own decisions and not wait for approvals.

Ilkka Paananen Supercell

Supercell’s Founder wants to be the Least Powerful CEO

Supercell’s CEO, Ilkka Paananen, believes the less leaders control the more powerful their companies. Supercell, a Finnish company, was worth about $10 billion in 2016 from the creation and marketing of games accessed by digital devices. Paananen says he wants to be the least powerful CEO in the world. He believes the best people will make the best teams that will produce the best games. He explains it this way: “What I mean by this is that the fewer decisions I make, the more the teams are making. In a dream scenario that means the team is making all the decisions. A couple of years ago, we were working on something called Smash Land. Everyone in the company loved it, and it was so close to meeting its targets but didn’t quite make them. So the team went to a sauna together, talked it out and took the decision to pull the plug. I was travelling at the time, so they didn’t bother to consult me – they just emailed the company to let them know. That’s just how Supercell should work.”

He was inspired by the Netflix approach to operate like a top sports team. It reminds me of a conversation I had with a former New Zealand All Blacks rugby coach who told me that they coach in the belief that “ better men make better All Blacks”. Players are empowered to make decisions under extreme pressure on the field without consultation with the leaders. This makes them a world beating team that almost always wins close games.

As a CEO of a very successful Telecoms company told me recently, when he and his senior team “got out of the way” and let their teams do what’s best for their customers, his company dramatically increased its customer retention rate and customer satisfaction levels resulting in earlier customer account payment – happy customers pay earlier. This translated directly into sustained revenue and profit growth.

These examples constantly remind me to trust my team and our partners to get on with it and create great experiences for our customers.

Learn more in our award winning book, the Customer Culture Imperative.