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This is why superb customer experience is not consistent or sustained by most businesses.

Sad Male Professional - Isolated

Don Peppers wrote a profound article recently pointing out that most companies are not acting on building superior customer experience over the medium and longer term. He tells us that most of what is being done delivers minor efficiencies and is short-term in impact – NPS measurement that addresses the symptoms and not the cure, customer journey mapping that is not really acted on, and creation of a customer experience role or function that has no authority and limited influence across the organization. Over time this impetus dilutes and dies as senior sponsors move focus on to other initiatives. He provides some good advice on how to overcome some of these weaknesses.

In our experience, most companies, claiming to be customer focused or embarking on the activities noted above, are missing the key foundation required for sustained customer experience success – a strong customer-centric culture. The diagram below illustrates how a customer engagement culture encompassing all leadership and employees drives customer experience, which in turn creates loyalty, advocacy, and better business performance.

Customer Culture Pyramid 2017

Peppers notes, and we agree, that customer experience is a journey. It requires the capabilities that a strong customer culture delivers and needs a focused plan and commitment by senior leadership to carry it through to the medium and longer term. It requires a “customer” mindset in all parts of the organization and a deliberate commitment to embedding this at all levels and all functions as “the way to do business”.

It should begin with measurement and benchmarking of the level of customer-centric culture in all parts of the business. This highlights strengths, weaknesses, levels of employee engagement with customers, and priorities for capability building. This forms the foundation for an ongoing customer experience improvement strategy that all employees in the business can buy into and can contribute towards its implementation.

At MarketCulture we have a proven roadmap that successful companies use to build an ongoing customer experience capability that delivers consistency and sustainability – and results in sustained growth and industry-leading profitability.

How do Customer-Centric Leaders leave a Legacy?

leaving a legacy through customer centric leadership

This year I have interviewed more than 40 leaders who have been selected on the basis that they are perceived by the people who know them well to be customer-centric. Our consulting partners around the world have been the main source of connection with these leaders.

One of the common themes of these leaders is that they have a sense of purpose that they want to leave a much stronger and sustainable business through the culture they create – a customer-centric culture. Some of these leaders head up multinational businesses in various countries and regions of the world and remain in those countries for only 2 to 3 years before moving to another region. The typical tenure of CEOs in large publicly listed companies is only 3-4 years. So how do they leave a legacy?

The most customer-centric leaders know that they must embed this culture in middle management and up, down and across the business. It is only then that the business will survive constantly changing senior leadership. I have always believed that one of the keys to embedding is a valid measurement of customer culture across the organization. This creates tangibility, employee engagement with customers and targets for improvement. Measurement in tandem with rewards and recognition for customer-centric behavior and performance provides the virtuous cycle for a sustainable customer culture that drives ongoing superior business performance.

That’s why I, with my team, have invested so much personal energy into measuring and benchmarking customer culture behaviors that are the foundation for superior and sustainable business performance in today’s disruptive world.

The MRI tool, developed 10 years ago, now with a rapidly growing database is a key tool that customer-centric leaders can use to fulfill their purpose of embedding customer culture deep in their businesses that can be sustained long after they have left.

What is your leadership legacy?

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?

This is how successful companies ride the waves of digital disruption

Wild blue

The tide of change from disruption is not just one wave, but a set of waves that continue to roll in and disturb the status quo in so many industries. These waves cannot be resisted but must be ridden by companies that want to survive and prosper. This is clearly seen in the retail sector and in services industries such as travel, transport, banking and insurance, health services and energy.

This sea change in business is now eliminating at least two options that so many established companies have relied on to survive.

One is “omission bias” that occurs when leaders worry more about doing something than not doing something. This has a psychological basis where we can see and measure the results of a bad move, but do not measure the costs of a move not made. However, when investments in customer culture and customer experience are not made, we can measure the impact of reduced customer retention and lower customer lifetime value to the business. These omissions to invest are clearly measurable in terms of their business impact.

The other is “loss aversion”. This is a risk averse approach of “playing not to lose” rather than “playing to win”. Psychological experiments in decision-making show that for most people the pain of loss is about double the pleasure of winning. Corporate culture has a direct impact on whether “loss aversion” is the dominant cultural characteristic. In those companies where “failure is an option” and people are empowered to make decisions and learn from their mistakes, then the loss aversion option is much less significant in how decisions are made. As an example, Amazon is continually experimenting and through “mistakes” learning to increase customer satisfaction and create new markets.

Its latest “mistake” occurred when the Amazon Alexa app apparently mistook a conversation by some young girls in Texas for an online order for a doll house and some cookies! I am not sure who made the “mistake” in this instance (you can decide), but there are lessons for Amazon regarding how they enable ordering via the voice activated Alexa AI system.

The most customer-centric leaders I have interviewed are all prepared to take calculated risks – a combination of curiosity of how to do things differently and better for the customer and the use of data and evidence that acts to provide the “calculation” of the risks. This is why we seek to measure the strength of a company’s customer culture because it provides both the quantitative measure of risk and the qualitative feedback from employees that provide many of the answers as to how customer value and experience can be improved.

The MRI is a unique tool to help leaders take calculated risks to ride the next wave of disruptive change, then the next and the next.

Customer Centric Leaders have a Service Focus where Authenticity Trumps Ego

Lars-Bjork-Qlik-970x400

Lars Bjork, the CEO of Qlik, has built the company with a service focus around a “we” Leadership Style.

My father had a particular view of service. You served your customers, your employees, your family, your community and your shareholders. He would employ people fresh out of jail to give them a second chance. He knew his staff and their families and helped them when they needed help. He knew what his customers wanted and needed and trusted his staff to deliver value. He led his business with integrity and authenticity. He was a highly respected and successful businessman. From his background in retail he told me if you do all of these things right “…the profit will come up through the floor.”

Lars Bjork agrees. He has led Qlik as CEO for the past ten years and has been there from its days as a tiny start-up in Sweden to become a world leader in business intelligence software. Qlik was purchased by a private equity firm in 2016 for $3 billion. It now has around 40,000 customers and offices in 26 countries. Bjork says “leadership, for me, is that you serve the team. And the team is the people who work for you.”

How does that operate in practice? Bjork describes it this way.

“I do a lot of town halls and video. People want authenticity, an unscripted sense of ‘this is how it is’. They don’t want to hear packaged BS. They can see that from a mile away. I try to be transparent and share a bit about my private life – because how am I going to learn stuff from people, how are they going to feel comfortable with me, if I don’t share anything?”

He also asks a lot of questions and listens intently to the answers. This has become formalized with a “listening forum”. This occurs where he brings a dozen people together from different sections. He can’t say anything for an hour. They give him feedback, and he just takes it in. He does not push back or dismiss it. This leadership style is one of authenticity and service.

In our current research involving interviews of customer centric leaders I find the most impressive and effective ones are authentic, service focused, and good questioners and listeners. It doesn’t mean they have no ego. They do, but they are essentially team players and do not let their egos dictate decisions. They often do have to make the tough decisions but they do it, like my father, with authenticity and with a “service” mindset.

Learn more about the power of a customer centric culture in our award winning book, the Customer Culture Imperative.

How a customer culture makes or breaks new product success: A lesson from Comcast

For those of you familiar with our work you will know that we successfully validated the link between a customer centric culture and new product success. Our chart below shows the links between our 8 dimensions of a customer centric culture and the key business performance outcomes.

8 Dimension Performance Links

Essentially organizations that develop a cultural focus that is obsessed with customers, outperform everyone else in the markets in which they play.

I just came across a great example of how this can work in reverse for a company that has not developed a customer culture – Comcast Cable.

Comcast recently announced a major new product – they are now a cell phone provider in the US market:

Comcast New Product Intro

Here is the reaction I found in some comments people who saw this announcement on LinkedIn (the majority of the comments were along the same line….):

Comcast New Product Intro Reaction

This is of course only anecdotal evidence, however, it is going to make it tough to make this product launch a success with an undercurrent of negative feelings towards the experiences many customers have had with the brand in the past….

How you treat your current customers today will have a massive impact on how they will respond to new product introductions in the future. 

Build your company’s customer culture today to ensure you continue to be successful in the future. Learn more in the Customer Culture Imperative, our award winning book.

What do customer centric companies do? Create Advocates for Life.

corso281In my travels in recent weeks I have experienced two examples of how a customer-centric attitude and behavior produce memorable customer experiences. Both of these were in hotels in different countries.

In Rome my wife and I stayed at Hotel Corso 281. We planned to go south for a few days by train and wanted to leave a large case at the hotel and pick it up again on our way from the Amalfi coast via Rome to Venice. Even though there would only be a 45 minute time between our change of trains in Rome, Delia, the front office manager assured me that they would send a taxi with my bag to the station as soon as my train arrived in Rome. So we took the chance. When I nervously called the hotel on the morning of our journey and spoke to the hotel front desk a different person was fully aware of my situation. As we pulled into Rome station I called again and another front desk person was fully aware and organized a taxi to send the bag. When the taxi arrived at the station it had a large sign with my name in the side window and I gratefully took my bag. Soon after I received a call from Delia to tell me the taxi driver reported to her that the bag had been delivered. We made the train connection all because of a display of team collaboration embedded in the belief that the customer’s needs must be met. When next in Rome we are going back to stay at Corso 281.

In Dubai I checked in to the Rihab Rotana hotel after a 7 hour flight from London. The front office manager gave me his card and also the card of the other front office manager who was off duty. He assured me to call them any time if there was a problem or something they could do. This gentleman, Mazen, was gracious, attentive and carefully explained all hotel services. This manner of care could be seen from all staff in the hotel – from housekeeping to concierge to the gym and pool deck.. Soon after checking into my room a bowl of fruit was delivered. Each day in my week long stay I was greeted by the smile of Daryl, a young lady in the restaurant who seemed to be there for all seven days of my stay. She told me that their team of five often had to work long hours and 7 days because when the hotel was very busy they had to make sure all guests received a great experience. Sometimes at the end of the day even though she had already been there 12 hours her greeting and smile never diminished. I will go back and stay at Rotana in Dubai.

While these things are small for service people with the right attitude and attention to customer needs, they are huge for the customer.

Bottom line – I am an advocate of both these hotels, they stick in my mind, I will go back and I will recommend anyone that asks to try them as well.

Do you attract the right talent to your organization? People that focus on the reason their job exists? Does the leadership of your organization focus its attention on delivering a great experience?

You can learn more in our book the Customer Culture Imperative

How a Customer Centric Culture can save lives

virgin-trains_driver

The team at MarketCulture recently ran a one day leadership workshop in Sydney, as is often the case we get to hear some incredible stories of the power of customer thinking.

One that really stood out was the story of a driver for Virgin Trains.

Virgin Trains is a great story of a business that is always trying to improve the customer experience, Richard Branson is well known for saying “there is always another way to delight a customer.”

Many people would think why would you include train drivers in a program designed to improve the customer experience? They just need to drive the train, they are hidden away at the front with little interaction with actual customers.

Virgin did not believe this, their philosophy was that everyone matters when it comes to delivering a great customer experience. As a result the train drivers were included in workshops designed to help each employee think about their role in delivering great experiences.

A week or two after one of the sessions, a veteran train driver was taking the normal route he had taken for many years and as he rounded the bend on a bridge he noticed a slight bump on the tracks. It was not particularly unusual, small bits of debris can often end up on the tracks. However this time, with the recent customer thinking training on his mind, it made him think more deeply about the bump. More specifically he thought about the passengers on the train and his responsibility for keeping them safe.

He wondered whether passengers had noticed the bump? At the next stop he decided to radio the maintenance crews and report it. In the past it was not something he would normally do as it would mean an investigation of something that was in his 30+ years experience probably nothing.

He continued to the end of his journey for the day. As he pulled up to his last stop his shift manager was there waiting.

“That bump you radioed through”… the train driver winced thinking he wasted a bunch of people’s time… the Shift manager continued “our engineers were just out on that part of the track, it seems a strut supporting the bridge has failed. If we kept running trains over that section we would have had a derailment and hundreds of people could have died. I am so glad you noticed it, you have helped us all avoid a catastrophe. Even if it was nothing, I am glad you reported it, customer safety really is our number 1 priority.” The train driver was relieved, not only had he averted disaster but he had been empowered to do the right thing for customers even if it had consequences for the train’s operations.

The driver was later awarded outstanding employee of the year and celebrated at the annual Virgin Conference in the UK.

This is a powerful story about how customer thinking can help people connect their work to the bigger picture and their responsibilities in creating a great customer experience.

For more stories on Virgin Trains and other great customer centric companies you can check out our book, The Customer Culture Imperative

 

What is the kryptonite for disruptors?

Established businesses everywhere are under attack. The headlines are full of stories of business disruption. Entrepreneurs everywhere are building companies to unseat the entrenched firms.

While many think the answer is to invest in more technology, lobby government or follow their competitors actually the answer is right in front of them.

Our team in Sydney recently had the chance to sit down with Luke Jecks, the Global CEO of Naked Wines for his perspective. Listen to Luke talk about what he describes as the Kryptonite for disruptors, its a great lesson for anyone in business today:

So what’s the Kryptonite for disruptors? A Customer Culture or as Luke puts it:

“Love your customers”

If you spend time understanding and acting on your customers’ needs you will create loyalty that will keep you as immune as you can be to disruption.

So how did Naked Wines disrupt the wine industry?

Before Luke set up Naked Wines four years ago he was looking for an industry where customers felt disenfranchised. He found it in the Australian wine industry – a market dominated by two large retail chains owned by Coles and Woolworths that between them shared almost 70% of wine sales nationally. Not only did he find wine lovers who felt little connection with the vast array of brands but also boutique vineyards that were being squeezed out of the market by ever-narrowing margins and an inability to finance the next vintage.

Luke knew that if he could create a personal connection between winegrowers and consumers and a financial model that could provide more stability and certainty for wine growers he could build a new business.

He realized that he needed wine consumers as repeat customers and he came up with the idea of “angels’ – that is consumers as angel investors who would pay $40 per month and build up a credit in their account to be used to buy the boutique wines of their choice.

Four years after launch Naked Wines in Australia has more than 50,000 sustained angels, more than 35 boutique winery suppliers with an online communication and ordering system that connects them.

Annual Australian revenue of $30 million and more than $200 million globally is a testament to the fact that the whole Naked Wines team have a culture that enables them to “love” their customers.

Isn’t it time to create a customer culture in your business and build up your disruptor defenses?

 

How customer insight uncovers growth opportunities – Lessons from Nestle Japan

cappucino

Nestle’s customer insight creates a new market in Japan

Traditionally Nescafe was bought in grocery stores and consumed at home. As Nestle Japan searched for new ways to expand its coffee business it found that the economic downturn led to Japanese companies ceasing to supply coffee on the job for their employees. There are about 6 million offices in Japan, most having less than 20 workers and few coffee suppliers were selling directly to offices.

Nestle Japan developed the concept of the Nescafe Ambassador – an office employee with a passion for coffee, interested in collaborating directly with Nestle on behalf of their workplace and acting as an “in-office barista”. The company supplied an in-office Nescafe Barista soluble coffee machine and the Ambassadors ordered the coffee from Nestle, collected money from their co-workers for coffee consumed and forwarded payment.

This innovation came from the insight that Japanese employees liked to have the convenience of having coffee in the workplace. But more than that it was an opportunity to talk with their colleagues, collaborate and catch up with what is going on – it rebuilt their social interaction and a sense of community at work which had been lost in many office environments. Nestle was able to capitalize on this unique understanding of what was happening in the Japanese office environments

Nestle is also looking for new ways to meet the needs of Ambassadors to enhance the atmosphere at their workplaces and facilitate communication between their colleagues.

customer insight

This new business model based on a customer-centric approach to business has been very successful for Nestle japan. The program was rolled out in November 2012 and by early 2015 there were 170,000 Nescafe Ambassadors. Their goal is to establish 500,000 Nescafe Ambassador cafes at the workplace as well as 6,000Nescafe Satellite cafes and Café-in-shops over the next five years.

Source: Kotler Impact, “Mind your Marketing”, Volume 1, October 2015, Business Model Innovation: The Nescafe Ambassador Program, pages 120-121