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What happens in your business when things go wrong – is it a triumph or a disaster?

Image Source: Social Samosa

The ultimate stress test of your customer culture is when things go wrong for the customer.

The recent cyber-attacks on Australian businesses Optus and Medibank are cases in point. A survey was done of 2,000 Optus telecommunication customers who suffered a privacy breach. The survey found that 56% of current customers answered ‘yes’ when asked if they were considering changing telcos as a direct result of the cyber-attack, while 10% had already left. The customer comments were highly critical of Optus and its communication.

One commented that there had been no direct contact either by email, text or phone and said: “Their handling has been appalling.”

Also, research has found that many customers were paying too much for their phone plans by paying for much more data than they were using.

See “Optus customers hang up”, Daily Telegraph.com.au, October 31 2022, page 9.

Optus has apologized publicly, but that is not enough. The lack of an authentic customer-centric culture has shown that customers are not being treated as people and that as an organization they don’t act as if really care.

Not only will there be large compensation costs for Optus to pay but the massive impact longer term is the loss of customers and loss of trust.

One lesson is that if you have not already built a strong customer-centric culture in your business you will suffer in a crisis – by losing customers, trust, revenue, and profit that will require very large investments to rebuild. This is a culture where everyone has some engagement with customers and a mindset that treats customers as individuals and proactively communicates and takes action to help them,

One challenge for many organizations is to really know to what extent that culture exists. Is there a high risk that you can be blindsided, like Optus?

The answer: measure it and then take action to improve if you need to.

Remember: What’s best for the customer is best for your business!

Dr Linden Brown, Dr Chris L Brown and Sean Crichton-Browne

It’s not about the customer strategy, it’s the culture, stupid!!

Source: leisa reichelt Freelance UX Consultant‘Culture eats strategy for breakfast’  Strategic User Experience (ConfabUK 2013)

Every time we look we see a report from surveys of the status of customer experience (CX) inside companies that show a high percentage of leaders are dissatisfied with their CX strategy and they plan to change it in the next year. This might also include changing the CX leader.

CX quality appears to be declining as reported from Forrester’s 2022 Customer Experience Index report where they note: “US companies have lost the vital focus on customers that they gained at the beginning of the pandemic in 2020. Forrester’s 2022 US Customer Experience (CX) Benchmark study reveals losses in CX quality across 13 industries. It requires an enterprise-wide effort to put customers at the center of an organization’s leadership, strategy, and operations”

A small 2022 survey of Australian and New Zealand companies by CXFOCUS suggests that a majority of Australian & New Zealand companies are not satisfied with their current customer experience strategies. The same poll revealed that more than 80% of companies are planning major changes to their CX strategy in the coming months.

Source: CXFocus

What is not addressed is the blindingly obvious. It’s not the strategy that is the problem, it’s the culture. The customer strategy may be brilliant, average or even weak, but the core of the strategy is not implemented, even in its basic form, because it is held back by the corporate culture. Even customer journey mapping may be well-documented and attempts made at linking each customer interface point with actions for improvement for customers. But what is missing is a company-wide, business-wide or function-wide customer culture that creates customer engagement and customer value creation/improvements across all parts of the organization.

If you want a better customer strategy you must have a customer-centered culture where everyone in the business has a mindset and customer awareness that motivates them to act on value improvements for customers, no matter what their role or function.

Now, when this is so obvious, why don’t leaders in organizations address it? Some believe the customer culture is much stronger than it actually is. Others believe it is too hard to change. Still, others believe it is not worth it.

Let’s consider. Almost all those who believe it is strong don’t have any objective evidence to support it other than anecdotal stories. We know this is the case because we have the only valid evidence-based customer culture measurement tool called the Market Responsiveness Index (MRI). We have found wide variations in businesses between leaders’ and employees’ perceptions and variations across functions.

Those who believe it is too hard to change, have not experienced a methodology where it is specifically designed to modify easy-to-change behaviors that can provide substantial improvements for customers and for work colleagues with whom they interact. Today’s world requires people in organizations to change their behaviors with customers. Like our experience with COVID, we can change.

Those who believe it is not worth it should consider this:- the companies that are highly customer-centric with strong customer cultures are among the most profitable in their industries and in the world. Second, consider where you will be if you don’t have a strong customer culture – you will have a customer strategy that is not implemented, a business strategy that is not effective, and a purpose and mission that is not achieved.

If you want a profitable customer strategy, first measure your level of customer-centric culture. Contact us to find out more.

True customer-centricity is grounded in reality

There is a reason the most customer-centric businesses in the world were born that way. To begin and become sustainable they were forced to be grounded in reality. They had to discover needs in the market that could be met, they had to work out how to service those needs and make a profit.

The businesses that have retained their customer-centric approaches as they have grown understood the need to remain grounded in the marketplace. Their leaders have not floated off into the ivory tower, rather they retain the pain of not delivering what they promised.

These leaders realize the work of organizations gets done at the front line and the further removed you are the larger the distance between you and reality. Hence the compelling need to empower those that are doing the work.

The best leaders don’t talk, they take action. They spend time with employees on the front line, speak with customers, put themselves in the customer’s shoes, and experience what it’s like to be a customer of their organization.

It is not complicated but it requires leadership which means consistent visible customer-centric action.

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

You can’t handle the truth – why most leaders say they want their businesses to be customer-centric but aren’t willing to take the first step

Feel fear and do it anyway - text on napkin

Creating a new business that endures over a long time is hard. We all know the statistics; 80 % of companies fail within the first 2-3 years.

What separates the businesses that sustain from those that wither away? Customer obsession. These companies have found a problem worth solving, a need that must be filled, and customers willing to pay. It all sounds simple.

What happens when these businesses grow up?

Over time their success breeds complacency. They no longer have to fight to win every customer; customers come to them; life is good. Leaders become managers and get paid to manage things already in place. The focus becomes the numbers, and the tail begins to wag the dog.

In markets where growth is turbocharged, mistakes are brushed under the rug. “So we stuffed up for that customer. There will be another one to replace them….”

It all goes well until the music stops; the tide goes out, and companies are exposed. Suddenly new products or services start failing not because they are bad products or services but because customers have lost trust. Managers have not been paying attention to the real source of revenue and profits – loyal customers.

Things have changed, growth has stalled, reputations decline, and customers are walking away.

Time for some customer-centricity.

The time has come to take a hard look at the business, how we are operating, what needs to change. We need to shift to a more customer-centric way of doing business!

Where do we start? How do we make it happen?

Like any and every major accomplishment in human history, everything great begins with one step forward.

In this case, that step is to take a realistic view of exactly how customer-centric you are as a business. For many that small step maybe a step too far: they don’t want to know.

Feedback hurts – it can feel like a knife twisting, gauging a hole in our being. It instills fear, even panic in us. And yet it is the truth, the way we perceive things is the way they are no matter what stories we want to tell ourselves.

So why do leaders say they want their businesses to be customer-centric but are not willing to take the first step?

Fear.

Fear of failure.

Fear of exposure.

Fear that it will distract.

Fear that it cannot be sustained.

Fear that they cannot do anything to change.

So what is the antidote to all this fear?

Just do it.

A funny thing happens when you face your fears – you grow.

If you think its time to face your fears and improve your business find out more about our unique customer-centric culture assessment here

Or learn how you can transform by putting customers at the center of your operations in our MarketCulture Academy

What we can learn from how Amazon deals with poor customer experiences

amazon_innovation_coe_process

A true test of any company is what happens when things go wrong. Does the leadership step up to fix a problem? Is it a bandaid fix? or is it something permanent, that involves going to the root cause of a problem.

The world’s most customer centric company, Amazon has a great methodology called “Correction of Error” or COE. As Scott Brinker outlines in his article on innovating like Amazon: It has been baked into their culture and requires all leaders to ask the following questions:

  • What happened?
  • What was the impact on customers and your business?
  • What was the root cause?
  • What data do you have to support this?
  • What were the critical implications, especially security?
  • What lessons did you learn?
  • What corrective actions are you taking to prevent this from happening again?

This is a great way to ensure that Amazon continues to learn and minimizes the chance that the same problem will happen for multiple customers.

Now for a fun 60 second example from the movie “Meet the Parents” with Ben Stiller

While this is obviously a made-up example, I am sure many of us have had similar experiences of over zealous staff taking policies and procedures a little too seriously.

If you were the responsible manager, or a colleague, what would you do?

 

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/

 

Which is a better approach: customer-centric, product-centric or finance-centric?

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This is a great question that really comes down to a matter of the degree of emphasis put on these different approaches.

While the emphasis of some companies maybe product centric what makes those companies really successful is their balance with a customer centric approach. The best example is of course Apple, they build incredible products. At the same time they are incredibly focused on the users of those products.

The do not myopically focus on their products to the exclusion of customers, in fact they have a very strong customer obsession. This is demonstrated in their retail shopping experience, their focus on how users can get the most from their products through to the simply product line that makes it easier to determine the right product to meet a customer’s needs.

The danger is when a company becomes too product-centric and losses site of the customer experience. Products have lifecycles and lose relevance to their customer bases over time. Nokia and Blackberry have experienced this in the telecommunication market, they were thinking incrementally about product improvements and were blindsided by the way in which consumers would want to use their devices in the future.

Finance centric companies usually suffer from short-term thinking and a results orientation which can lead to great short-term results but that can catch-up to them when profits are out ahead of customer satisfaction.

Companies that do this continually lose the trust of customers and those companies find it very hard to grow organically as new products/services are often rejected by customers that have been burned in the past.

Think about a poor experience you had with a bank for example, the likelihood you are going to want to expand your relationship with that bank will diminish as a result…

Again like the product-centric company, a finance-centric company must add a balance of customer thinking to be more sustainable and successful over time.

We help companies understand how they can add the customer obsession element to how they do business, you can learn more in our MarketCulture Academy here

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, learn more in our MarketCulture Academy we know the way!

Amazon Founder Jeff Bezos explains how he drives a passion for customer obsession with his senior leadership teams

iStock_000003915234Small

Creating a customer-obsessed culture requires strong leadership and one of the very best exponents of the practice is Jeff Bezos of Amazon.

Even though Amazon now employs more than half a million employees and serves more than 300 million customers, Jeff Bezos personally reads every customer complaint email sent to him. While he does not respond to them personally, he is immersed in them as a way to stay in touch with the reality of what is going on in the business.

We call this, customer immersion, and it is one of the most important activities any CEO can engage in.

So how does he manage the wide range of customer complaints/feedback he receives directly?

He is known to forward the email directly to the leader accountable for that area with a simple “question mark”. The question mark is his short-hand for can you look into this? why is this happening?

Leaders know they are then on the hook to drill into the issue and find out what is happening and resolve it in a systemic manner, ie so it does not occur again!

And this is the crux of what makes a customer-obsessed culture different, leadership takes this seriously and follows through on making the changes necessary so that the source of the complaint is eliminated…. this simply does not happen in most organizations.

This approach gives Bezos a frontline insight into what customers think and experience. It is a huge leadership advantage as he can maintain a pulse on what is actually going on across Amazon’s massive and complex business.

In this great article by Julie Bort, Jeff explains:

“The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There’s something wrong with the way you are measuring it.”

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 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.
Contact us now to find out how we can help your company become customer obsessed.

Culture eats customer experience quick wins for breakfast – its time to get truly customer obsessed!

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Apple’s culture continues to reinforce Steve Job’s approach to designing using a customer lens and working backward.  Source: Apple’s WWDC18

A recent article by Nadia Cameron from CMO highlighted a panel discussion in which many leaders acknowledged the quick wins for customer experience improvements are over.

It’s great to see more and more senior leaders recognizing the need to go deeper and look at organizational culture. Whilst it can be more difficult work, it is also longer lasting and more sustainable if leaders put the effort in to change the cultural emphasis towards making customer’s lives better.

So how are CMOs and other leaders looking to address culture?

One of the best examples comes from Rachael Powell, the Chief Customer and People Officer for Xero, they are taking an inside-out approach by focusing on their people and how they impact the customer’s experience.

Xero has recognized the intimate connection between how employees are treated and how they, in turn, treat customers:

“It really is about starting with our own people first who are the biggest ambassadors for our brand, winning their hearts and minds, then resonating that out to our channel, which is bookkeepers and accountants, and ultimately the end customer sitting at the end of the spectrum,” she said. “If we achieve this, we go from having 2000 ambassadors, our people, to having hundreds of thousands of ambassadors globally.”

They also appear to have a strategy for shaping their culture over time with 2 of 6 pillars sitting with Rachael: “great people and teams, and love and protect our customers”

It will be interesting to follow the Xero journey as they continue to grow!

Over the past 10 years, MarketCulture has researched 100’s of companies including Google, Virgin, Amazon, and Apple to find out what they do differently when delivering great customer experiences.

Could you create change if you knew the strengths and weaknesses of your company compared to these companies?

The MRI assessment provides the golden insights to create change! Contact us now and we will show you how!