Customer Centricity In the Age of Empowered Customer

Rohit Singla, Chief Transformation Officer, BMC Software, India | Monday, 12 February 2018, 09:37 IST


A Reddit user once sent an email to Tim Cook, CEO of Apple Inc. about the quality of music while on hold with Apple customer service. “It was super low quality, therefore an upbeat rock song sounded like pure distortion and really aggra­vated me because I was on hold for 20+ minutes. Much to his surprise, a lady from Cupertino called up the next day, saying she’d received a con­cerning email from Tim about ugly distortion hold music while on the phone, that Tim had tested this him­self and agreed that something had to be done. She assured him that the hold music would be tested to make sure it sounded pleasant on all types of phones and connections. “The next time I called Apple, the hold music was indeed very pleasant,” posted the user on Reddit.

This is a classic example of how customer-centricity is not just a buz­zword or metrics, but a mindset that is emulated right from the CEO and gears an organization, its workforce, and processes to work towards a cus­tomer’s success leading to business success.

Why customer centricity

We are in the 4th industrial revolu­tion that marks the digital era with breakthrough development in robot­ics, artificial intelligence, internet of things, nanotechnology, and autono­mous vehicles to name a few. Each revolution lasted less than half as long as the one before. In the Digital Era, the pace of innovation will exponen­tially increase. At every step, every enterprise will have to put customer and relevance right at the beginning, think of the customer experience at the start, and only after that, charter the path back to the technology so that the technology stays relevant, and drives success.

Another theory that strongly backs the customer-first approach for business is the one laid down by Roger Martin, academician, author, and business thinker. Martin breaks down modern capitalism into two major eras -the managerial capitalism and shareholder value capitalism.

During managerial capitalism that began in 1932, firms would be run by the hired help, a new class of professional CEO,” writes Martin in his article titled “The Age of Custom­er Capitalism”. This was followed by shareholder value capitalism that be­gan in 1976. Its governing premise was that the purpose of every corpo­ration should be to maximize share­holders’ wealth. If firms pursue this goal, the thinking goes, both share­holders and society will benefit. “This is a tragically flawed premise, and it is the time we abandoned it and made the shift to a third era: customer-driven capitalism,” states Martin.

Martin goes on to share, John­son & Johnson has corporate world’s single most eloquent statement of purpose—its “credo,” which hasn’t changed since J&J’s legendary chair­man Robert Wood Johnson created it in 1943 bluntly spells out the peck­ing order: Customers come first, and shareholders last. However, J&J has confidence that when customer satis­faction is at the top of the list, share­holders will do just fine. My belief is, as enterprises make their progression towards Digitally Native Enterprises (DNEs), their single most important focus should be to make the customer as their top pri­ority. With customers as their focus, the quality of strategic direction and the decisions that follow will be top-notch and will ensure relevancy of products, solutions, and services us­ing the digital-era technologies.

Absence of customer centricity

Industry insights provide the un­sympathetic prediction that 75% of the current S&P500 companies will be replaced by 2027 for lack of ad­dressing technology innovation, tur­bulence, and lack of coherent vision to ensure relevance to the digitally empowered customer.

Enterprises will cease to exists in the absence of a deliberate effort of defining, architecting, developing, and executing a focussed customer-centric culture across their constitu­ents globally.

It’s karmic to see the age-old issue surfacing again, this time around, an “outside-in view”.

In the absence of Customer Cen­tricity, functions in the organization have a different interpretation of the customer, be it in the B2B, B2C, B2Things, or B2AIbusiness models.

Challenges in the way of customer centricity

Organizations across the world, ir­respective of industry, either has been or are being disrupted at an ex­ponential pace. As per International Data Corporation (IDC), “to win against digital disruptors, organiza­tions must become Digitally Native Enterprises (DNEs). A DNE can scale its operations and innovate at a pace that is an order of magnitude greater than traditional businesses. It is driven by a customer-centric and empowered workforce that embraces risk-taking as it seeks to continu­ously innovate. Technology and data are the lifeblood of a DNE fuelling more efficient operations, new reve­nue streams, and customer loyalty. A DNE adopts an outside-in approach, leveraging its ecosystem of stake­holders (i.e., customers, partners, employees, and community) to dy­namically evolve offerings and even its business model”.

Some of the top challenges being faced by organizations to adopt cus­tomer centricity are:

• Being an outside-in view for enterprises, it’s critical to help work­force across the world live the pur­pose at all levels. The challenge is to have a workforce across the enter­prise that believes in one single de­fined “credo”.

• Senior leaders miss identifying potential “fault lines” in their indus­try that may signal shifting customer base. Leading to losing customers in this fast-paced and interconnected world with the dramatic change in the way customers share, analyze, and process information that has far-reaching political, societal, and eco­nomic consequences in the Digital Era.

• Siloed Customer Centricity initiatives — a lack of coordinated ef­fort across business functions impairs a company's ability to maximize po­tential and to move quickly.

• Limited expertise—Customer Centricity dictates a new set of capa­bilities that enterprises find difficult to cultivate.

• Islands of innovations—There may be too many initiatives involv­ing too many technologies; organiza­tions must look at a digital platform to optimize resources and innovate more rapidly

• The heightened volatility of cus­tomer demands with differentiated responses due to lack of Customer Experience OS.

While customer centricity is critical for businesses, it is important for businesses to remember that not all customers turn out to be profitable. Businesses must identify and focus on the right customers.

As Dr. Peter Fader writes in his book Customer Centricity: Focus on the Right Customers for Strategic Advantage, “High-quality customers are those who stay loyal to the company and don't leave unless given a very strong incentive to do so. These customers have a high Customer Lifetime Value (CLV) and collectively have a low attrition rate. Customer-centric organizations strive to acquire, retain and develop this type of customer by enhancing their experience.”

Leading the way

Chris Brown, co-author of The Customer Culture Imperative: A Leader’s Guide to Driving Superior Performance, describes a customer centric-culture as ‘a shared system of values and norms (mindset and behaviors) that focuses all employee activity on improving the overall customer experience.

Key takeaways

1. Form a Customer Experience Department directly reporting to the CEO.

2. Formulate a Customer Experience Program weaving all the three aspects—strategy, customer, and employee (workforce) together.

3. Build a “Customer Experience OS: The Central Nervous System of the Customer-Centric Enterprise”

This will create a wholesome Customer Life Journey through all the stages and touch-points that a cus­tomer has with an enterprise.

I leave you with a quote by Wil­liam Gibson, “The future is already here — it’s just not very evenly dis­tributed.”

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