Category Archives: Customer Centric Strategy

Is it possible to compete with Amazon and win?

hurbert_joly_fired_up

For businesses everywhere, this is becoming an increasingly relevant question.

Not long ago most business could just ignore Amazon and say to themselves that’s fine for them in retail they are not operating in our industry.

Well, times are changing, and Amazon is competing in not only retail but consumer electronics, entertainment, enterprise cloud services and is eyeing opportunities in healthcare and payments.

The question for all businesses to ask themselves is how would we respond if Amazon entered my marketplace?

Well, one company did not have to wonder for too long, in fact, they have been competing with them for the past 10 plus years. With the rise of Amazon, many analysts predicted the demise of Best Buy, the US brick and mortar retailer.

So how to Best Buy fight back? They applied the same approach as Amazon – customer obsession.

In fact, under the new CEO, Hubert Joly, they undertook a transformation from a transactional retailer focused on store traffic and closing sales to one focused on building customer relationships for life.

Where does a customer-obsessed transformation start?

It begins with your customers and employees when a business is under attack as Best Buy was around 2009, a new vision and purpose for the business’s future needs to be articulated.

Joly launched a turnaround plan called “Renew Blue” in 2012 that was designed to address all critical stakeholders in the business beginning with customers.

To gain insights on what was happening at the frontlines, Joly spent a week working in a store and talking with employees. They told him the website sucked, it was slow and difficult to navigate, and the employee discount had been reduced recently by previous management. They also described how customers were “showrooming” coming in to see products then buy them somewhere else online.

Joly began with some quick wins, restoring the employee discount and taking price off the table by guaranteeing to match online prices.

This showed he was listening and more importantly acting on feedback, a critical trait for a customer-obsessed leader.

He then focused on customer experience, redoing the website, investing in search and matching Amazon on free fast shipping.

By focusing on their unique strengths, the in-store personal experience, they have been able to focus and start winning again.

Joly shifted the employee mindset by instilling a new purpose. In his words “we’re not in the business of selling products or doing transactions, we have our purpose, which is to enrich lives with the help of technology.”

“We don’t see ourselves as a bricks-and-mortar retailer. We are company obsessed about the customer and in serving them in a way that truly solves their unique problems.”

What does this mean in practice?

For Best Buy that means introducing new service offerings such as the “in-home Advisor” which involves best buy employees going to people’s homes for free and providing expert advice on how to better select, buy and install technology to enhance their lives.

A second example is “Total tech support” which involved Best buy taking ownership of any technical problem in the home and fixing it, all for $200 a year.

The third example of their innovation is a focus on aging seniors with an emphasis on helping them stay in their homes independently for longer. Through the smart deployment of technology they can detect if something is wrong and people need help, they can then intervene to make sure people get the help they need.

Customer-obsessed Leadership

Hubert_Joly_jeff_bezos

Customer-obsessed leaders don’t just say they are focused on customers they act on it and make decisions with a customer lens every day.

A great example is Best Buy’s relationship with Amazon, although fierce competitors on many fronts, they also see opportunities to collaborate and work together because it is the right thing for their customers.

“A lot of other retailers have been reluctant to sell their products. The reason we’ve sold their products is because we’re customer-driven.” says Joly.

In fact, recently Amazon chose to launch its Fire TV Smart TVs exclusively through Best Buy.

“Every management meeting we have, we don’t start with the financial results. We start with people. Then we talk about the customers, and last we talk about the financial results”

 “I don’t believe that the purpose of a company is to make money. It’s an imperative. It’s a necessity. But it’s not the purpose”

Hubert Joly

 

The turnaround strategy with its reinvigorated purpose and customer obsession around enriching people’s lives through technology are paying off. The ship has turned, and the future looks bright for this retailer once thought to be following Circuit City into bankruptcy.

How can you instill a customer-obsessed culture in your business? It starts by understanding your current culture and charting a path based on purpose, people and delivering great customer experiences.

Sources:

http://tcbmag.com/honors/articles/2018/2018-person-of-the-year-hubert-joly

https://www.cmo.com.au/article/659314/how-best-buy-shifted-from-being-retail-led-customer-relationship-driven/

 

To get the right customer culture you have to be obsessive!

Passion Fuels Innovation

If you want to be one of the best at creating a consistently great customer
experience you have to be obsessive about it. Think professional athletes, think
sustainable weight loss, think the most customer-centric companies in the world
like Amazon.

Too many companies today have their weaknesses in their customer culture
exposed – some with devastating effects for their customers, employees, and
shareholders. Consider what’s happened in the banking sector, the retail sector, and
the telecommunications industry.

The culture of companies towards customers is now exposed for what it is – both to
their customers and to non-customers. Customer reviews, unwanted publicity for
failures of service delivery as well as visual cues from its website and physical
channels now expose a company’s customer culture – or lack of it.

This can’t be fixed using band-aids. A customer-centric culture is not a bolt-on. It has
to be built-in. If your company needs to build-in a strong customer culture you will
have to be obsessive about it – just like professional athletes, sports teams, and the
world’s most successful companies.

Jeff Bezos, the founder of Amazon, has been obsessive about customers, since its
inception just over 20 years ago. He has made sure that everyone working at
Amazon is also obsessive about customers.

This means being obsessive about getting and acting on customer insights, giving
permission (empowerment) to employees to do what’s right for the customer,
working in collaborative teams to provide greater value for customers and aligning
everyone in your business to deliver a customer-centered strategy.

This is not some nice intangible idea anymore, we have been obsessed with developing a proven methodology with measurement and best practices that any company can use.

If you really want your organization to be customer-obsessed, talk to us we know the way!

This is why many business leaders waste half their effort and don’t even know it!

There is an old adage in advertising that says: “I know that half my advertising is wasted, but I don’t know which half”. In many cases, we know that all of it is wasted.

So it is with strategy and culture. Most senior business leaders spend considerable time on strategy – and rightly so. We do need to know where we are trying to go. But much less time – and sometimes virtually none – is devoted the other “half”: culture.

Some pundits believe “culture eats strategy for breakfast”. But that is beside the point. Business leaders need strength in both or at least half their effort will be wasted – and sometimes all of it. The strategy sets the direction and culture delivers (either well or poorly) the value of the strategy to the marketplace.

Our experience in many organizations across the globe is that the biggest missing piece is a customer-centric culture that is aligned with a customer-centric strategy. Repeatedly we find a lack of alignment between the stated strategy and what people are doing. Also, we see, more frequently, strategies that attempt to address and create customer value but the culture is not aligned with delivering to meet customer needs and desired customer experiences.

Aligning Customer Strategy and Culture

Aligning customer strategy and culture

You just need to see the disruption occurring in so many industries and almost from observation you can predict impending corporate collapse. Which retailers will survive? Which health services will prosper? It will be only those that develop a strategy centered on customer value and experience with a customer-centric culture across the entire organization that has the capabilities to deliver it.

If you have a question about the adequacy of your culture and believe you are not in the right-hand top box in the diagram, you should start by measuring it and benchmarking where you stand against the world’s best customer-centric companies. To discover the next steps on what you need to do, have a look at the groundbreaking book: The Customer Culture Imperative.