December 20, 2013 9:40 pm
Your customers are out of control. They have been for some time. They wanted more, they wanted it personalised and they wanted to pay less. Post Lehman’s you have worked hard on driving costs out of the organisation, but if anything their unreasonable demands are increasing. They now demand immediate gratification, they expect some personal brand/lifestyle statement boost in the process and they want the experience from window shopping through to post sales to be nothing short of sublime.
This is compounded by increasingly intense price competition from other corners of the planet.
There are two approaches. You can out-cost the competition. But of course this is a race to the bottom. And it is one you will lose unless your business model has grown up from the mean streets of a poverty-stricken emerging economy.
The other approach is to out-price the competition. To do so you need to give the customers a reason for sticking with you despite the options they have to go elsewhere for a ‘better deal’. So we are talking about loyalty.
A quick loyalty test: How many of your clients have adorned their body with a tattoo depicting your logo? Harley Davidson - stop reading now. The rest of you need to consider how you create such a compelling experience for the customer that whilst a tattoo might be a step too far they see value in a relationship with your organisation.
But the chances are that you are some way off even creating a tribe of advocates. Possibly your clients are so locked into your vendor-centric processes that they lack the willpower to move on. In any case you need to be crystal clear as to why people buy from you.
So step one is to build a picture of your market and this is where data analytics comes into play. You might say that this is customer experience viewed from the seller’s perspective. Poor customer data will lead to poor customer insight.
Monitoring the customer touch points is of course important in order to identify customer-displeasing experiences and to then rectify them. But customers do not just randomly interact with organisations, they embark on a journey, which may be triggered by a recommendation or one of your campaigns. Smart marketers endeavour to convert prospects into buyers and buyers into habitual buyers. Done well habitual buyers become brand ambassadors.
So does your customer service approach reflect that journey? It certainly doesn’t do that in the large scale grocery industry. Here people who buy fewer goods are rewarded with faster check outs. “Use our fast track lane ONLY if you have bought 5 items or less!”
So a better understanding of where your customers are on their journey should be added to your analytic harvesting tools coupled with a set of rewards for staying the journey thus far.
But fundamentally is your organisation customer-centric? Much like the NASA janitor who believed his role was to put a man on the moon, what answer would I receive if I walked into your head office and picked a random person in accounts or HR and asked them what is their role? If their answer does not include overt references to improving the customer condition then you have a lot of work to do.
And by a lot of work I mean that a complete enterprise transformation awaits you. It is likely that in such an organisation the governance is built around your offerings with some functional support consuming cost alongside.
The transformation I refer to is a leap from what you sell to what clients want. Organisations that are customer-oriented are structured around the customer and what they care about, rather than what is convenient to the organisation in terms of financial reporting.
In an organisation that is genuinely customer oriented there really is no need for a sales function because everybody is into pleasing the customer. The same is true for marketing. Large scale campaigns seem wasteful in the social economy as now everybody is also in marketing.
Much of the customer experience and the associated analytics will be delivered via a digital medium. So this suggests that the CIO is about to become the most important person in the organisation.
But let’s snap out of this organisational dream I have woven. You have your organisational hierarchies and people are too well remunerated to upset the status quo. And only the most altruistic of CEOs is likely to embark on a multi-year upheaval programme of which her successor will be the beneficiary.
There are a couple of options. Create a collaborative infrastructure (in other words a connected business) such that those who are customer-centric can work together despite the rigidity and inappropriateness of the current structure. The number of people participating in this shadow organisation is likely to grow as they look for greater purpose in what they do. Though I am not sure whether this will work across all markets - confectionery trans-fat and tobacco products come to mind.
Option two is akin to buying a new car but not selling the old one. Keep the old one running whilst it still has some use but direct any further investment to the new car. So I am suggesting you grow a 2.0 version of your business that is built with the customer at the centre. Again your customer-centric people will likely leap at the chance to migrate across to the new model.
As well as being customer-centric, business 2.0 will be unencumbered by archaic remuneration policies and legacy technology. The cloud will play a significant role in this. Given the importance of new technology could this be a role for your CIO? Or if they are preoccupied with technology management, perhaps this is the role the Chief Digital Officer was destined to own?
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