A current survey of CEO's would confirm the view that future
growth must come from getting back to the business of attracting
and satisfying customers better than their competitors, with the
ultimate goal of driving profitable topline growth.
In our consulting work we are increasingly having conversations
with clients about the concept of being customer centric, and what
it would mean for their business.
The Global Financial Crisis (GFC) has only highlighted this fact,
and meant that in the post GFC environment the previous pathways to
profitable growth of cost cutting, and merger and acquisition
activity will no longer be the panacea they once were, and that the
focus must now be on organic growth strategies.
Yet sadly, the idea of customer centricity may well be a short
lived fashion, falling foul to the litany of management buzz
concepts that have come and gone (or simply being oversold or
poorly understood by the consulting organisations espousing
them).
So what is are the characteristics of a customer centric company?
And how can they be sustained?
At GSG, we observe that a key characteristic of high performing
companies is a strong orientation towards bringing the customer
view to most business decision making, particularly for more
complex organisational brands such as retailers, banks, airlines
and telco's.
In simple terms, customer centric organisations constantly live in
the world of their consumers rather than their own, and commit to
the discipline of reviewing key business decisions in the context
of what will this mean for their customers, and not just what will
it mean for their profit and loss (read financial analysts).
Perhaps some old and new examples serve to illustrate these
organisations.
Companies like Walmart have long lived in the world of their
consumers. Sam Walton's now legendary management of walking around
his stores meant he had constant feedback (from both staff and
customers) on how they were performing. No surprise that Sam could
tell you what his customers were thinking and doing anytime of day
so that, in the cut-throat game of retailing, he had a unique
insight into the potential impact on his customers and their
shopping behaviour of his own company's decisions and those of his
competitors.
At the end of the day, Sam knew what was good for his customers
was good for his business.
More recently and more locally we have evidence of two strikingly
different examples in the same industry; one claiming it as a brand
virtue, the other living it through their brand behaviour.
Post GFC, we have seen some rather puzzling marketing behaviour in
the banking industry, reinforcing the continuing view that our
banks have still to understand what it is to be customer
centric.
NAB has quietly been reading its customer research and
courageously making decisions that its customers have long been
asking for, decisions such as abolishment of "customer hate"
account overdrawn fees. In the short term this may cost NAB bottom
line performance but in the future is likely to attract loyal,
premium paying customers and reinforce the loyalty of their
existing customers.
Contrast this with the recent marketing promotion of another
leading bank - an aggressive campaign rather self righteously
claiming they live in the world of their customers. A campaign that
is not supported with any meaningful customer based benefit other
than a rather hollow claim that its customers will encounter a
better experience based on tracking research they have
conducted.
A classic battle between proof and promise, benefit and claim and
insight and insult!
We will watch with interest how this plays out.
In summary, being customer centric will not be the panacea to the
"New Growth" challenges our Chairman Kevin Luscombe has written
about in our last newsletter. Just as the concept of brand should
be viewed as a whole of organisation concept, so too should the
concept of customer centricity. If companies take the simple steps
of understanding their customer needs and using this knowledge to
help inform their strategic decision making across the whole
organisation, they will be a long way down the pathway to
profitable growth......and being customer centric.
To be customer centric demands a commitment, a discipline, a whole
of business mindset. It is all too easy to weave the customer
centric language into company reports, mission statements and PR
briefs.
But to be genuinely customer centric is a major investment, not so
much in dollars, but in the execution needed with constant
management attention to living the belief. This means in
performance goals, measures and rewards, in staff selection and
development, and in the realities of day to day behaviour from the
top down.
Principles for a Customer Led Organisation
- Top down (senior level) direction around customer centricity as
major driver of business decisions for improved financial
outcomes.
- Established 'customer insights / intelligence capability - able
to be understood and leveraged across organisation for strategic
focus and prioritisation.
- Wide series of inputs to inform opportunity
identification/monitor progress - suppliers, staff, channel
partners, consumers, community involvement (staying close to the
next marketplace)
- Very accessible website, with clear invitation for consumer
dialogue (product/service information, ideas, product performance
playback)
- Clear and shared understanding of what customers are being
targeted, what matters, how they buy?
- Shared view of brand strategy - what brands stand for, unifying
purpose and understanding across and down the organisation
- Customer understanding and perspectives integrated into key
executive decision making forum(s).
- Business improvement agenda set by key drivers of customer
satisfaction and linked to commercial outcomes between
sales/marketing (and supporting KPIs/metrics)
- A disciplined approach to 'research briefing' including a clear
view of what business decision is to be informed by the research
and a systematic approach to leverage past insights
- Brand metrics linked to consumer behaviour and business
economics