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?
Customer focus and employee engagement are two sides of the same coin.
Clearly if your customers are going to be satisfied it takes an engaged workforce that is passionate about their work and holds a strong desire to deliver great experiences.
What we have found to also be true however is that employees become disengaged when they lose meaning in their work. This meaning can only come from recognition and acknowledgment from customers (whether internal or external).
In our work with our clients we have found when increases in customer focus occur (measured with our MRI tool) this is followed by increases in employee engagement (measured with the Gallup Q12 tool).
It is the result of getting on the same page as to the purpose of the business, namely creating customers and the personal satisfaction that comes from doing valued work.
What has your experience been? Does customer focus and employee engagement run in tandem in your company?
There are 5 crucial questions every leader must answer about their customer base:
1. Which customers are your most valuable and why?
2. Which customers are costing you more time energy and stress than they are worth?
3. Who are your advocates? Customers that are driving new business by referring you to others?
4. Who are your ideal prospects?
5. Which prospects are most likely to become customers and why?
Why are the answers to these questions important? Understanding who your best existing and potential customers are is essential to growth and to the allocation of resources.
By spending more time with your best customers and less time with those that drain your resources you can free up the time necessary to attract new customers.
The answers to these questions should drive your marketing strategy, implementation tactics and ultimately improved return on investment (ROI) from all of these activities.
Do you know the answers?
There is a increasing recognition of the fact that a customer’s experience with your company plays a significant role in customer satisfaction, retention and profitability.
So where do you start with a customer experience initiative?
In our experience the best place to start is by defining a vision and goal for a customer experience initiative that inspires people to want to get involved. This creates a reason for change, a compelling vision of the new customer experience that will be created and delivered by the company over time.
While customer experience is a process that can be mapped, refined and improved over time what is important in the beginning is to capture the hearts and minds of the people that are going to have to deliver the new experience. Why should they do things differently, how will changes in their behavior benefit them?
A good place to start an initiative is to gain a sense of the organization’s current culture as it relates to customer experience. Is the company’s culture already customer focused? Meaning there will be less resistance to changes that will clearly benefit customers. Or is the culture an internally focused one that sees the customer as a necessary evil?
The Market Responsiveness Index and the Customer Responsiveness Index are two tools we use to gain a sense of where the culture lies against a benchmark. This provides a great rallying point for company’s to self diagnose just how big a journey they need to undertake.
In a recent interview with “Marketing Management”, the CMO of IBM, Jon Iwata described the future of the marketing organization:
“If you were about to create a new marketing department, what would be in it?
I do think brand and culture has to be managed as one indivisible mission … I think the ideal marketing department would have strong collaborative skills to collaborate with external entities, starting with clients, but also strong collaborative skills to collaborate with HR, legal and sales.”
What is very clear is that for marketing to continue to be a meaningful contributor to business performance it not only has to enable delivery of short-term growth objectives but also needs to tackle the strategic issues of leveraging and aligning the culture in a way that maximizes the success of the organization.
Jon’s views on this issue and ours are very closely aligned, marketing needs to use its skills not only to influence customer behavior but also that of employees inside the organization to truly create lasting sustainable value.
This visual highlights our view of how market-driven firms build a culture that creates the type of customer experiences that drives customer satisfaction, advocacy and ultimately the bottom line. Marketing as a function clearly has the opportunity and I would argue obligation to take on this role now and in the future.
I recently had the pleasure of being interviewed by Linda Popky of L2M Associates, a Marketing Strategy Consulting firm.
It allowed me to reflect a little on what it takes to build a market-driven firm and why it remains a critical issue for any business. The reality is the only firms that will thrive now and in the future are those with a close eye on the marketplace.
A great example is Walmart that uses “business intelligence” technology to crunch its masses of data and turn it into actionable insight. The latest Economist magazine, describes the following case: “Wal-Mart peered into its mammoth databases and noticed that before a hurricane struck, there was a run on flashlights and batteries, as might be expected; but also on Pop-Tarts, a sugary American breakfast snack. On reflection it is clear that the snack would be a handy thing to eat in a blackout, but the retailer would not have thought to stock up on it before a storm.”
This is a great example of gaining customer insight from information which allows a company to take profitable action.
To listen to my interview on why customer insight and other market driven behaviors are so critical to business profitability click here
Google recently launched a new social networking service called Buzz. The launch reveals blind spots for Google that have resulted from a corporate culture focused on engineering excellent but lacking in the type of insight necessary to develop new value for existing and potential customers.
The concerns raised by users were fairly predictably related to privacy issues but were overlooked by Google. Google’s unprecedented success in its core business has given it the luxury of exploring a wide range of new business from productivity and communications software to a recent entry into the handheld device market. However, to date it has arguably failed to have any significant impact with the new businesses apart from Android which is certainly getting the attention of Apple (Apple recently sued HTC a maker of Android operating system phones).
To me this points to a need to balance Google’s product culture with a stronger emphasis on the external environment, in particular customer behavior in order to better anticipate how customers will react to new products and services.