Category Archives: customer focus

This is why playing it safe is the biggest risk for legacy companies

toon-1443-innovation

Making pizzas seems like a simple business. After all its been happening for centuries and it seems like almost anyone can do it. But to make a sustainable business out of it and maintain an appealing brand in today’s competitive world requires a customer centric leadership mindset.

A starting point for Domino’s change from an ailing pizza maker in 2010 to a growing food business was a leadership change. Patrick Doyle became CEO in 2010 after Domino’s had experienced several years of stagnating business and declining share price. Doyle realized that he could only revamp the business if he could lead and create a mindset change in staff – a change from an “omission bias” where people worry more about doing something different than no change and “loss aversion” where the focus is on not losing rather than winning. I remember the great American motivational writer and speaker Zig Ziglar saying “.. the fear of loss is greater than the desire for gain”. Doyle realized that playing it safe was the riskiest course of all and he needed to create a mindset in the business that change is a necessity and a learning mentality in which for staff “failure is an option”.

A Customer-Centric Leadership Mindset was Needed to Transform Domino’s Pizzas

The change in Domino’s strategy came with a big picture view and a realization that they were not only in the pizza-making business but also in the pizza-delivery business and how this fundamentally affected the experience of their customers. This meant becoming just as much a tech company as a pizza company to transform the way customers could order and monitor the status of their order using a Domino’s app. Other apps were created to enable customers to provide feedback and become involved in games making ‘virtual’ pizzas.

Staff needed to be open to customer criticism to help them make better pizzas that customers would love eating as well as keeping them warm enough by the time of delivery. So Domino’s took on board customer views of how bad the pizzas were and suggestions on what to do to improve them.

Customers’ frank views were aired in advertising and social media and created a transparency and honesty that enhanced brand trust. Domino’s used staff in ads to describe how they had changed recipes and ingredients to make better tasting products. The company created a delivery car with one seat and a warming oven for up to 80 pizzas. It modernized its image to create more of a sense of style and a sense of humor. All of these things were needed for success. Here is 4 minute video describing what they did:

But the foundation for creating this change to a more agile, customer-responsive business came from the customer mindset brought by the new leader and embedded in the business in a way that enabled them to change and transform. As one senior leader told me recently it is the focus on the customer and their changing needs that is the motivator for leaders and staff to change!

Domino’s business results prove the point. Today, it is the second-largest pizza chain in the world, with more than 12,500 locations in more than 80 countries, and up from a share price of around $8 in 2010 to one of $215 in June 2017.

Learn more about what a customer centric culture and mindset are by reading our book, the Customer Culture Imperative.

How to create a customer centric transformation – Lessons from Air New Zealand

air_new_zealand_middle_earth_captains

A little more than a decade ago Air New Zealand posted the largest corporate loss in New Zealand corporate history. Inside 24 months it was turned around to a profit. Since that time it has been amongst the consistently highest profitability of full-service airlines around the world.

The catalyst for this change was Sir Ralph Norris, who was called in as CEO to transform the business. Sir Ralph’s customer-centric leadership and customer focused strategy was embodied in the mindset change from “we fly planes” to “we fly people”. He immediately engaged the top 800 leaders in Air NZ to think about, discuss and act on insights from customer feedback and observation that told them about what customers valued and what they hated about the flying experience.

His legacy, established over several years as CEO of the airline, has been continued by the current CEO, Christopher Luxon. You can see it when you fly with Air NZ – even the safety announcements are engaging as they feature some of New Zealand’s star rugby players, spectacular scenes of the country and references to some famous movies made in the country….

This is a testament to the sustained revenue and profit that can be generated by a culture and strategy embedded in the belief that “what’s best for the customer is best for the business.”

See The Customer Culture Imperative for a roadmap on how businesses like Air New Zealand have done it.

Customer Centric Leadership Practices – Lessons from “the HP way”

the hp way

Source: GIZMODO

In recent weeks I have met several ex-HP employees who told me about the great times they had at HP when the culture embedded by Bill Hewlett and Dave Packard prevailed – a culture of innovation, customer focus and respect for individuals as flesh and blood people.

One told me of his early days as an engineer working in one of the R&D labs in the Test and Measurement Division at Palo Alto. While working on a project at his bench he was expected to watch his colleague working on the next bench and through observation and discussion to see what he was struggling with – then to see if he could solve the problem. If he could, there just might be a lot of other engineers in the marketplace who are struggling with the same problem – and this solution might create a new market.

This practice, or cultural discipline, heightened the awareness of engineers at HP to be looking for problems that their engineering colleagues had that created a sensitivity to the potential needs of their “engineer’ customers. In effect, it made the R&D employees at HP customer focused.

Imagine if accountants in CPA firms or in financial services firms adopted the “next bench” theory. Or IT technologists in IT service firms practiced it. Or HR professionals in large corporations did it. We might just see stronger customer focused cultures emerging organically.

What are the opportunities for “next bench” thinking and practice in your business?

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?

5 traits companies must have to play in free-for-all energy industry

customer centricity in the energy_industry

Traditional electric utilities are on the verge of facing massive competition. The barriers to entry have fallen and a large number of new and old companies have entered the power generation business.

Numerous and diverse competitors non-utilitieshave already entered the electricity business. Wind farms are expanding. More than a hundred Silicon Valley startups are developing new power technologies. Many of these have venture capital funding. Several like the Bloom Box fuel cell, have the potential to transform the industry by bringing power generation to the home.

Real estate companies and builders are supplying rooftop solar on new homes. Schools, government buildings, and businesses are deploying their own solar panels. Chevron Energy Solutions, a Chevron subsidiary, is one of the nation’s largest installers of solar energy systems for education institutions

Tie this to consumer and business resistance to higher energy prices and an increasing drive to seek out lower cost alternatives and we will soon see the competitive floodgates open putting the traditional players with big traditional infrastructure investments at risk.

It is not clear where all of this is going to go.  Everything is in the mix – technology, the economy, politics, globalization and societal trends towards “green and clean”. The government plays a big part with its energy policy along with regulation, subsidies and incentives for varies parts of the industry.

The one factor that is common to the longer-term success of each player in this industry is the adaptability of its corporate culture. In this environment it must have a culture characterized by 5 traits:

  • Customer understanding and insight
  • Competitor awareness and foresight
  • Peripheral vision of industry changes and impacts
  • Strategic alignment around value for all stakeholders
  • Collaborative and empowered workforce

Those players that have these 5 cultural traits embedded in their DNA will be able to adapt to the rapidly changing conditions and challenges in this disruptive industry. Those that don’t will disappear or be acquired.

Could your business survive in a competitive free-for-all like this? Does it have the 5 traits required for success in any industry undergoing major market and technology shifts?

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?

How much is the Starbucks experience worth?

The starbucks premium customer experience

“Starbucks represents something beyond a cup of coffee”, says Howard Schultz, CEO of Starbucks. He’s right. Consumers are not quibbling about the new $7 cup of coffee. In fact, it seems to be a runaway success.

When consumers are connected with a brand emotionally, as many are with Starbucks, they are prepared to pay a premium, or in this case a super-premium, particularly if they believe that the product is scarce. The Costa Rica Finca Palmilera beans come from a relatively rare cherry of the Gesha tree. Scarcity is one thing, but the coffee also needs to be distinctively different. Reviewers say the fancy beans, are being dubbed the Sauternes or Sauvignon Blanc of coffee. They have described the taste as “crisply sweet, quietly but profoundly complex.” It sounds a bit like a wine review, doesn’t it? It won’t be long before we have consumers doing blind taste tests and entering coffee tasting competitions to see who has the best palate.

But, it’s even much more than that. Starbucks has created a bond with its loyal customers based on creating a superior experience from the connection with their personal barista in the shop to hanging out with friends over a Starbucks coffee and a snack. It is the consistency of this experience and the trust that goes with it that enables Starbucks to charge a super premium and for a segment of its market to happily pay it.

We see this in a broader perspective if we accept Howard Schultz’s view: “We help customers discover entertainment”.

This is just the tip of the iceberg. Starbucks is pressing ahead to achieve leadership in the tea market with its intent to acquire Teavana. It acquired Evolution fresh in 2011 offering pure juices and natural foods with added nutrition, launching its first shop in California in October 2012. All of this along with massive growth in the number of shops led by expansion in North America and China.

Does your customer experience create an emotional connection with your brand and your company? Is it strong enough for you to be able to introduce premium price products that customers will happily pay for?

Has the word “customer” lost its impact?

the_customer

There is a lot of discussion these days on the importance of being “customer” focused, of having a “customer” mindset, of delivering a better “customer” experience. Sometimes there is so much reference to customers that the word is starting to lose its meaning. Now don’t get me wrong. I am an unwavering advocate of the imperative for organizations to create and maintain a strong “customer” culture which embodies – focus, mindset, experience and shared values and beliefs that what’s best for the customer is best for the business.

However, some organizations have developed their own unique twist to this. The way in which you talk about customers and describe them influences both the attitudes and behaviors of employees towards them.

Remember when Telcos referred to their customers as subscribers? This depersonalized their customers to the point where they were thought of as a number or a statistic.

Costco thinks and talks about its customers as “members”. This means that they see them as part of their business and all staff feel connected and act accordingly. A member is someone who belongs there. In particular, a member is special and is to be given special, personalized service and this is reflected in everything that happens at Costco, including the return of goods which are accepted back cheerfully even from the most unreasonable member.

Both Ritz-Carlton and Virgin Atlantic refer to their customers as “guests”. As an invited guest of the hotel or airline you are treated with radical hospitality. It promotes in the staff of these organizations a feeling that you treat these visiting guests in the same way as you would treat guests in your own home.

Professional services firms like CPAs and Law firms refer to their customers as “clients”. The Merriam-Webster dictionary describes a client as a person who is under the protection of another. This suggests the customer is in their care and they have a responsibility to do what’s best for the client. Also it seems that the word “client” elevates the customer to being someone who deserves special individual attention.

Doctors refer to their customers as “patients”. Part of their duty of care is to advise and help manage their personal well-being and maintain confidential records of their patients’ progress.

In the “age of the customer” it is important to rethink how we refer to that most important driver of our business success. Whatever word you use conveys a particular meaning that can support or dilute the mindset and behaviors of your employees towards customers.

Do you have a special term for customers? Does it support your drive towards customer centricity?

Think outside the box and profit from your competition

Creative Competitive Strategies

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?

How to communicate without saying a word

Communication is a massive part of any major change initiative. A leadership team’s ability to connect with employees at all levels with a clear powerful message is critical to success.

Some of the best lessons on communication come from the world of advertising. Agencies are charged with breaking through the noise to catch a customer’s attention and deliver a powerful, meaningful message.

The image at the top of this post does just that. It also helps illustrate some rules about communication that can help leaders be more powerful communicators.

First it uses a powerful simple visual that tells a story without saying a word. “How am I going to fit my car into that spot….without killing anyone!”

Second the text is simple, to the point and benefit driven – “Park assist technology from Volkswagen”.

The lesson for leaders trying to drive change is – use powerful visuals that represent and reinforce the changes you want to make in the organization.

Here is a great visual we developed for one of our client’s that wanted to implement the “5 whys” process as part of their customer focused culture change initiative.

Why is the “Why” upside down? Good question! I thought you’d never ask….