Customer Centricity

Understanding how to determine your value to a customer represents a significant future trend, critical to long term survival.  Businesses are demanding that their service operations take action to become much more customer focused, in an attempt to develop an awareness of the customer’s needs and to understand how to deliver to those needs, to add distinct and differentiated value to the customer. The positive effects of such a policy can be seen in those businesses that are effectively working towards customer centricity.  The list outlines some of the best practices that are being adopted by leading edge companies as they pursue and achieve working customer centric strategies.  The list isn’t long:

1.      Structured contact with customers whether formal or informal

2.      Customer focus and the measurements that prove it

3.      Alignment of processes across the customer interface to enhance their effectiveness

4.      Strong relationship between strategy and delivery

5.      Ability to adapt quickly to changing customer needs

Implementing the practices of Customer centricity requires an honest appraisal of current practice to question whether actions are really being done in the customer’s and the business’s best interests.  Like many things in life, it isn’t rocket science but it also isn’t easy.

Many business managers may claim to be customer focused and will cite numerous visits to customers and regular customer interaction as evidence, but interaction with the customer is not always structured either in the processes followed or the measures then recorded.  In this context the term structured means – designed to draw out the real customer needs without promising an instant solution, but in a format that can be easily accessed and converted into action by the business as a whole.  The importance of structuring the formal contact between customer and supplier cannot be over-stated, as poorly orchestrated contact encourages the perception with the customer that the supplier is inefficient and this can undermine efforts towards building customer confidence and trusting relationships. Structuring does not need to mean losing the personal touch, nor does it make instinctive reactions redundant – these are both very important and a key part of the supplier’s role. 

Research carried out with a number of the best performing companies; found that the majority of senior managers were visiting up to a hundred customers a year, believing that there is a high correlation between relationship-building and customer satisfaction and customer loyalty, if supported by good service.  The same research also highlighted that the senior manager could occasionally be seen as a soft-touch by the customer if they gave away hard-won margin on a contract, which underlines the absolute necessity to treat customer centricity professionally and not believe a few positive customer-focused actions will win hearts and minds.

Establishing a strategy of customer awareness requires recognition that the customers will always demand quality and value for money, and will put pressure on the price of that performance.  The primary task of any business is to concentrate on profitability, and a focus on productivity and profitability will ultimately deliver a better service for the customers.  Constant focus on the needs of the customer allows the business to work more effectively with less waste, and achieve customer satisfaction at lower cost:  one technique is to ask – what is in it for the customer? – as opposed to – what is in it for me?  Operating in a structured scientific way, utilising measures and assessments that can be correlated to offerings and capabilities, will ensure that the customer will receive realistic deliverable promises.

Customer focus will lead to customer awareness, and the necessity of formulating how a business can establish the structure to achieve this desired result.  Companies canvassed for their opinion believed that clearly structuring the customer/supplier interaction was not a simple matter, and gathering appropriate information on the customer requires accurate refinement.

Creating customer-focused processes is essential for success as the Key Performance Indicators (KPIs) reveal that businesses regard Customer Service Levels as the most important indicators.  Companies acknowledged as successful use a variety of different mechanisms to understand their customer – not simply relying on annual in-depth customer surveys, supported by monthly customer satisfaction surveys.  Constructing an effective questionnaire that examines what is valued by each customer and how well it is delivered provides an excellent start from which to build rapport and to undertake further questioning into the core of what really brings that individual customer value.  Figure 1 illustrates the output from such an exercise, apparently an easy to use tool but full of pitfalls in the hands of inexperienced practioners.  The pitfalls include – implying a promise, discussing aspects without consideration to the cost of delivery, giving value away unintentionally.

Figure 1

To ensure effective customer centricity it is necessary to have precise measures to monitor the process, with a strong relevance between processes and strategy.  In a number of cases, the polarisation of the service operation into two very different forms, with break/fix at one end and professional services at the other, is causing some problems.  Delivering strategies to cope with such division is not simple and even leading-edge businesses find this difficult, and they still have some way to go to make it easy for their customers to do business with them.  As our research indicates, strategies effectively focused on customer centricity – Brand-Driven and Relationship-Driven – are demonstrably more effective in growing both revenue and margin, and capable of delivering high levels of customer satisfaction and loyalty.

Integration of the measures with the customer’s priorities is essential for true customer centricity, and achieving this usually requires measures aligned to the contractual priorities of the customer, which can be measured through survey feedback.  Asking customers regularly what they need and what they value will help maintain an external focus on the customers, however many businesses are still more focused on the business, and not on the customers.  Suppliers are now putting in place their own teams to form part of the customer’s processes (these are not what most people understand as account teams), to ensure that the customer operates effectively, and so that actions and remedies can be dedicated to ensure visible customer focus at all times. 

Successfully delivering customer-centricity requires that the staff work with customer initiatives and be empowered to support the initiatives, in a combination of smooth professional processes by engaged and well-trained employees.  Empowered staff will generate trust in the customer, because the customer can see that the representative is well supported through the processes, and has the right attitude to mitigate the worst effects of any unforeseen occurrence. Finally, the delivered service needs to accommodate the challenging balancing act that is a modern business, and be able to adapt to changes quickly.

Customers need to be completely satisfied if they are to buy again and be an advocate for a supplier.  For the customer to rate performance as, ‘just satisfied’, is justifiably regarded by the supplier as failing, even if the customer is prepared to overlook a poor performance.  There must be respect for the customer, and it is necessary to be able to work in unison with them, to be able to voice an opinion and suggest improvements.  Having the right people working the account will diminish the opportunities for dissatisfaction.

There is a strong belief within leading-edge companies that it is not possible to be too customer centric, but that customer-centricity has to be translated into awareness of the customer needs (even if the customer cannot express them) to be of real value to the business. The processes must work for the customer and the supplier, and innovation focused towards that customer is essential.

Achieving an advanced level of dedication towards customer focus requires a defined business model, designed to create service differentiation; measuring delivery times and feedback loops, and analysing failures.  Successful processes utilise developing technology to get directly to the customers, with continual reengineering to reduce the number of processes and process elements needed to achieve this competently and efficiently. 

From mission statement and aims, to the portfolio of services and the sales channel, it is necessary to demonstrate a seamless alignment to the customer, together with the ability to work hand in glove with them.  Wherever there is evidence that the processes are not aligned, the operations have to be able to respond rapidly, and improve the alignment.

Customer centricity is of value to a supplier because it fosters adaptability: all the measures and sensing mechanisms will be focused beyond the business and onto the customer, the speed of detection of change will be profoundly quicker and the business will be in a position to cope with the demands of a tough environment. 

The adaptive company, to apply Darwin’s theory of evolution, appears today to be the most appropriate business model.  Irrespective of size or structure, those companies utilising the correct mechanisms, outlined above, are going to be able to detect requirements and act upon them quickly, and modify behaviour to adapt to a rapidly changing environment, to be better placed to survive, and be much more profitable and valuable to their customers, ensuring mutual long term success. 

Steve Downton has established a reputation for providing effective business advice within the Services Sector specialising in guiding senior management teams and supporting service operations both large and small to improve their performance profitability and deliver service excellence.  steve.downton@downtonconsulting.com, www.downton.noventum.eu    

© Downton service management consultants 2010, part of the Noventum Service Management Consultants Group

To learn more about the customer service experience you can take part in our various research activities such as the series of Service Marketing Roundtables, where you can share insights with other best-class organisations and leverage the experience of other clients facing similar challenges and opportunities both inside and outside of your industry. Commencing on 10 June, London, United Kingdom  -> More information