Tag Archives: linkedin; customer experience; customer centricity

The company-customer disconnect

It’s a strange irony that the very actions many companies take in an attempt to grow often stops them from growing.

The most obvious recent example is Netflix. Once a darling of customer focus and innovation it has been faced with some difficult growth decisions recently, the result of which has seen 810,000 customer leave.

Here is how Reed Hasting’s their CEO explained things:

“Although we dramatically improved our $7.99 unlimited streaming service by embracing new platforms, simplifying our user interface, and more than doubling domestic spending on streaming content over 2010, we greatly upset many domestic Netflix customers with our significant DVD-related pricing changes, and to a lesser degree, with the proposed-and-now-canceled rebranding of our DVD service.”

This is what happens when a company effectively raises prices 60% without a significant boost in perceived value. To read more on exactly what happen and the wall street reaction you can click here

The point I am making is that there is a significant disconnect between companies and their customers and where there are gaps there are opportunities. While most companies believe they are delivering a great experience, while the majority of customers disagree. The disconnect can be seen below in a chart taken from an Bain and Co whitepaper on this topic:

So what do the 8% of companies that have alignment with their customers do?

Firstly they really understand what their customer’s find most valuable about their products and services.

Secondly they understand who their most valuable customers are and they create strong compelling and different value propositions for them.

Not only do they identify the value propositions but they actually deliver them.

This is where culture comes in, it’s not good enough to know what the value proposition is, you need an organization that is willing and able to align around it and make it happen. This requires a organization-wide mindset that is customer centered, not just company centered. Are you leading that type of organization?

New Customer Experience Research

Bruce Temkin, formerly of Forrester just released a new report on customer experience in large North American corporations. Some of the highlights are below:

Only 16% think they always or almost always delight customers getting customer service online.
95% want to improve profitability, but only 43% want to improve the work environment for employees.
37% have had a customer experience leader for at least 12 months

The biggest obstacle to improving customer experience is “other competing priorities.”
57% have a formalized voice of the customer (VoC) program
45% that have a formalized VoC program tie compensation to customer feedback scores
32% have been using Net Promoter Score (NPS) for at least 12 months; 19% are not familiar with NPS
31% analyze conversations in social media sites like Facebook and Twitter

The customer experience competency assessment showed a wide range of results across the 20 questions:

Highest scoring: Senior executives regularly communicate that customer experience is one of the company’s key strategies
Lowest scoring: Marketing does as much brand marketing inside the company as it does outside the company

Here are the number of companies that were rated as “very good” in each of the four individual competency areas in the Temkin Group competency model:
Purposeful Leadership (16%)
Customer Connectedness (16%)
Compelling Brand Values (13%)
Employee Engagement (10%)

Clearly there is a long way to go for these companies. However, the recognition that customer experience ultimately drives business performance and can create competitive advantage is gaining momentum. The competencies Bruce outlines closely relate to the areas we measure in our culture model. For companies to be successful in delivering a great customer experience they have to change the behavior and mindset across the entire organization. Everyone must buy-in and understand exactly what they can do to execute in a way that has an impact.