Category Archives: leadership

Driving high value – low cost customer experiences

emerging_customer_centric_airline_indigo

A friend of mine travelled last week from Bangalore to Dubai on IndiGo Airlines. She said it was low cost, with seats that would lean back giving a feeling of more space, along with great customer service. She travelled coach class and yet was addressed by name by the flight attendant.

IndiGo placed its first order of 100 aircraft with Airbus to start its business as a domestic airline in India. The size of this order ensured low operating costs, full maintenance support from airbus and the latest aircraft technology and comfort. In 2005, when other low-cost carriers were working with older, leased aircraft and battling a reputation for inferior service, Indigo inked a deal to buy 100 new A-320 jets from Airbus, purchasing at volume to ensure a lower price and a partnership-type commitment on maintenance. IndiGo’s investment in the training of its staff and its [aircraft] fleet killed whatever difference might have existed between a low-cost carrier and a full-service carrier by offering equivalent service. By 2011 Indigo had neatly 20% of the rapidly growing Indian domestic market. In September 2011 it introduced its first international flight to Dubai.

Indigo turned regular business travelers into loyal customers because it never acted like a budget airline. From the beginning, its purchase of all new aircraft helped it avoid maintenance problems, and superior planning helped it to match or exceed the on-time performance record of its full-service competitors — even though rapid turnaround of its planes was the key to the company making money.

But it also went beyond the basics to reinvent the first-time flyer segment. When Air Deccan, acquired by Kingfisher in December 2007, was struggling to fight the impression that their planes operated like public buses with wings, IndiGo pushed best practices even when there was no compelling reason to do so. In a country where other carriers shared passenger-stair vehicles and the top airline still had to have disabled passengers carried up the staircase to plane height by ground crew, for instance, Indigo brought in larger, handicapped accessible passenger ramps from day one.

Similarly, the company equipped check-in staff with hand-held scanners that allowed passengers without baggage to avoid the dreaded scrum at the counter. And at least in the beginning, flight attendants manning the beverage carts addressed even lowly economy class passengers by name (with the aid of the seating chart).

The strategy paid off: Since 2008, when the company booked its first profit even as high fuel prices and the economic downturn ravaged its competitors, IndiGo’s net income has grown more than five times — from a shade under $20 million to more than $120 million.

With Boeing forecasting that Indian air traffic will grow 15 percent a year over the next five years and that India will require more than 1,000 commercial jets over the next 20, according to the Wall Street Journal, that may just well make IndiGo the fastest growing airline in the world’s fastest growing aviation market.

IndiGo President Aditya Ghosh says India is a hugely under-penetrated market. We have just one commercial aircraft for 1.9 million people. The United States has one plane for every 50,000 people.”

The airline, which earlier ran role specific training programmes like any other airline, decided to merge training into one central operation with three segments: one, functional skills training aimed at specific roles like that of pilots, in-flight crew, ticketing attendants, baggage handling, among others.

The next segment was coaching for customer service and soft skills.

The last came leadership training at all levels.

This last segment of training, designed to encourage all employees to take ownership of customer issues, Ghosh insists, has really helped the airline develop a strong loyal customer base.

Do you have the right skills sets in your organization to drive high value at low cost?

4 simple practices to build a customer culture in your company

This is a great short video interview with Tony Hsieh of Zappos discussing how the concept of culture and customers come together. Also thanks to Robert Reiss, host of The CEO TV Show.

The intersection of customers and corporate culture

The culture of an organization dictates how it will view customers and how it will treat them.

If everyone is expected to understand who customers are and what they value, then people naturally start doing this. Culture is a form of social pressure, it is the way you are expected to behave in a group environment, hence it is a very powerful way for leaders to create an environment of success.

Customer culture specifically looks at how much attention is being placed on bring the customer viewpoint into all decision making. It is a proven way to drive better business results as it ensures the business is aligned with its market.

Here are some great customer culture building practices that you can begin today regardless of the role you play in your company:

1. Put Customers on the Agenda

A great habit that gets everyone thinking is to start every meeting with a customer insight. Share one piece of feedback you’ve collected, one idea you have heard directly from a customer. These insights and stories can come from anywhere in the company. It does not have to be a deep conversation – just a way to get in the habit of brining the customer viewpoint inside before getting on with the rest of the meeting’s agenda.

2. Building Customer Empathy

Have someone share their own recent customer experience. Was it a positive one? What made it positive? Why did it stand out in their mind? How does it affect the way they think about that company and would it influence whether that would continue doing business with them? What does it mean for your company?

This simple exercise is a great way to build customer empathy in the team. By thinking like a customer you can make changes that will drive increases in value.

Steve Jobs and his leadership team conducted a similar exercise and recognized how dissatisfied they all were with their mobile phones. In their experience, phone’s were difficult to navigate, complex and basically not user friendly. This created the drive and inspiration to develop the iPhone.

3. Encourage Leaders to Share Customer Stories

Create a regular opportunity for senior executives to report on what they learn from their own conversations and interactions with customers.

There maybe extra leg work to translate what they heard into a useable insight, but it will be well worth the effort.

4. A Top Successes/Frustrations Customer Conversations Report

Create an ongoing forum for people to share what customers are saying in the form of a communication piece to the whole company. It should be in story form but can include statistics on key customer metrics ie things that are important to customers that your company helps them achieve. For example LinkedIn tracks how many new connections it helped people create on its professional networking site each day.

It should also include the top frustrations customers have when doing business with you. This highlights to everyone the priorities in terms of maintaining and improving customer satisfaction levels.

We have lots of FREE tools, templates and elearning modules to help build your customer culture here

What other practices do you use to drive a great level of focus on customers?

4 ways customer centric leaders demonstrate they care

Customer Centric CEOs

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”.

CEO of Checkers and Rally's rick silva in "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?

Great customer focused leaders – Jeff Bezos

Jeff Bezos - a Customer Focused Leader

Amazon, under the leadership of Jeff Bezos, has been a great success story. It really created the online retailing sector with an initial focus on books and now has expanded to sell just about everything that can be sold online. It has been an innovator with new cloud services, the online shopping experience and the Kindle.

Part of Jeff’s success he attributes to the idea of having no regrets, taking risks, and having a powerful customer focused mission to drive everything. These are three ingredients key for genuine customer focused leadership. After all being customer focused requires listening and understanding customers better than the competition. However, at some point risks need to be taken to use that knowledge to create new solutions that may or may-not hit the mark.

NO REGRETS

He is what Jeff has to say about his regret minimization framework:

“I projected myself to age 80 and I looked back…and I said, ‘What I want to have done at that point is to have minimized all the regrets in my life.’

When you are in the thick of things, you can get confused by small stuff. I knew when I was 80 that I would never, for example, think about why I walked away from my 1994 Wall Street bonus right in the middle of the year at the worst possible time. That kind of thing just isn’t something you worry about when you’re 80 years old.

At the same time, I knew that I might sincerely regret not having participated in this thing called the Internet that I thought was going to be a revolutionizing event. When I thought about it that way, in the regret minimization framework, it was incredibly easy to make the decision.”

KEEP TAKING RISKS

As companies like Amazon grow, there is a danger that novel ideas get snuffed out by managers’ desire to conform and play it safe.

Jeff describes how Amazon deals with this issue:

“You get social cohesion at the expense of truth,” he says. He believes that the best way to guard against this is for leaders to encourage their staff to work on big new ideas. “It’s like exercising muscles,” he adds. “Either you use them or you lose them.”

A MISSION THAT DRIVES EVERYTHING

Another key part of Jeff’s leadership has involved a mantra to drive alignment of all employees around one mission – “to save customers money”

While their vision is publicized as “Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.”

The mission is something I have heard from a number of employees in different parts of the company (IT, marketing, HR) and they say it drives everything they do. It creates alignment and focus around customers in a powerful way.

Does your leadership style include these elements?

Taking the long view

The Long View, Davenport

A customer culture is one that takes the long view.

It’s a company that recognizes the necessity to get short-term results but does not borrow from the future to achieve them.

It’s a company that will invest in customers today so that they will remain customers tomorrow.

It’s a company that values long term healthy relationships with employees, partners and customers.

It’s a company that will do the right thing in the short-term even though it will cause pain so it will become the right kind of company in the future.

Does your company take the long term view?

Customer focused leaders are willing to take short term pain for long term gain

Customer Focused Leadership

Becoming a truly customer focused organization takes effort. Remember:

“Nothing worth doing comes easily”

There are substantial pay-offs to aligning your business with your customers. With the Market Responsiveness Index we have proven that customer focused businesses excel in every financial measure important from sales revenue and profit growth and overall profitability.

Unfortunately a key hurdle for many leaders comes when faced with the decision to sacrifice a short term profit in the hope of a longer term pay-off.

What do I mean by this?

There are three investments leaders must make in shifting the culture:

1. The investment of time, energy and thought to what it means to be customer focused. To paint a vision that people buy into and build a strategy to achieve that vision, just like any other business endeavor.

2. A financial investment in understanding customers in unique ways that will allow the company to compete more effectively in the future. There may also be decisions designed to build stronger loyalty that may cost the company in the short run but result in customers becoming long term advocates.

3. An investment in doing things differently. For companies to become customer focused, individuals need to become customer focused and this often requires developing new skills and a new mindset.

These investments take courage, strong leadership and ultimately are only undertaken by leaders that really care about having a sustained impact on their organizations.

Is your leadership committed to aligning the business with its customers?

6 questions on customer focus every leader must answer

Image

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

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

1. Why be customer focused?

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

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

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

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

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

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

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

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

c. They gain insights on what bugs customers

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

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

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

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

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

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

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

a. Personal relationships that create advocates

b. Consistent high value service delivery

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

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

6. Who creates value for customers?

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

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

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

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