10 Mar. 2014 | Comments (0)
What happens when you deliver poor customer experiences and get complaints? You might ignore your customers — or worse, blame them — and lose them for life. Or you might fix their problems and earn their loyalty. What you and your employees will do depends on your customer culture.
In truly customer-centric companies, all individuals (regardless of their roles) base their decisions and actions on the belief that what’s best for the customer is best for the business. New evidence shows how a strong customer culture drives future business performance and supports market strategies. Our research, based on aquantitative study across more than 150 businesses, spanning various industries and functions, identifies seven cultural factors that drive customer satisfaction, revenue and profit growth, innovation, and new product success. These are important predictors of future results and early indicators of risks and opportunities related to retaining customers and acquiring new ones. Our research on highly customer-centric businesses like Amazon, Virgin and salesforce.com tell us that these factors are disciplines that, if practiced and embedded, create superior value for customers and sustainable growth in value for stockholders. They can be measured and benchmarked for any organization:
1. Customer Insight: Does the company have a deep understanding of its current customers’ needs?
The Chateau Elan Resort in Georgia offers “silver service without the gloves” — a customer experience set amongst vineyards, in a relaxing atmosphere where any request is answered with “consider it done.” The insight that customers prefer to ask any of the staff about booking a restaurant, ordering a taxi, or getting extra towels in their room led the resort to empower all staff to quickly and directly fulfill customers’ requests by working as a collaborative team.
2. Customer Foresight: Will the company lead the market with new services before customers recognize their own changing needs?
Salesforce.com understands how customers such as Stanley Black and Decker (SBD) are trying to innovate and lead in their own marketplaces. For example, it has developed technology that allows SBD service people to remotely diagnose and troubleshoot problems on customers’ mobile devices. Customers can share live video of their problem with SBD via a smartphone using the saleforce.com platform, which enables real-time service. Imagine having a power drill that automatically signals SBD when the battery needs replacing, a toolbox that can be remotely locked or unlocked, or the ability to track the location of tools at different job sites. All are important productivity enhancers for professional builders. Salesforce.com had the customer foresight to create the technology that makes them possible.
3. Competitor Insight: Does the company monitor, understand, and respond to its competitors’ strengths and weaknesses?
The Virgin Group enters industries such as financial services, radio stations, and balloon travel, amongst many others, based on an intimate insight into the strategies and capabilities of incumbent competitors. Its value proposition as the “fun” alternative based on “brilliant basics with a touch of magic” differentiates it from rivals.
4. Competitor Foresight: Does the company actively consider potential competitors when making decisions about customers?
Amazon.com, one of the world’s most customer-centric companies, has strong competitor foresight, opening its platform for use by new emerging competitors and pre-empting existing and new competitors with new offers. For example, Amazon recognized the potential threat from Apple in the tablet market. Apple was looking to do to books what it had done for music by supplying both the reading device (the iPad) and the content via its iBookstore. Amazon’s foresight led to the development of the Kindle, designed to keep Amazon out in front as not only the preferred source for books, but also the preferred supplier of book reading devices.
5. Peripheral Vision: Are your employees actively encouraged to signal threats and opportunities observed in the external environment?
The very essence of Google’s peripheral vision is symbolized by Google Glass, which incorporates cutting edge technology and innovation for customers from internal ideation, partners, and acquisitions.
6. Cross-Functional Collaboration: Are your people working cross-functionally to solve customer problems and deliver better service to customers?
Swedish-based Ikea embodies collaboration in its vision, values, and strategy. High performers who cannot collaborate are fired. Recruitment is based on propensity to collaborate and work with people first, skills second.
7. Strategic Alignment: Do staff members fully understand and buy in to the company’s vision, values, and strategy?
When Westpac, one of Australia’s largest banks, developed a new vision to “delight customers,” it found that was easy to say, hard to do. It had to include “customer” as a corporate value, develop customer measurement systems to capture advocacy and loyalty, and train staff to interact more effectively with customers for relationships, as well as realign remuneration systems. All that was needed to create alignment around vision and strategy for effective execution.
Customer culture is as fundamental to business performance as breathing is to living. It is the life force of your business — no matter what your industry sector. Knowing how to measure it, and its impact on performance, is key to your company’s success.
This blog first appeared on Harvard Business Review on 1/17/2014.
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