Knowledge Center: Article
The five essentials of customer-centric cultures5/19/2015
Digitization and fast-changing, often disruptive technology have irrevocably altered the business landscape, along the way ushering in a new era of the consumer. As a result, a company’s ability to achieve growth through product or service offerings that capture only the rational needs of customers (and not the emotional ones) is increasingly at risk. Thus, it is no surprise that executives seeking to gain a market edge are embarking on customer-centric strategies, essentially seeking to make the customer the undisputed king. But what does this strategy actually mean to the kingdom (the company) and its servants (its employees)? Few executives truly understand the wide-ranging changes the company must embrace for this approach to succeed.
Many senior executives fail to assimilate a customer perspective into every department and level of the organization. A company’s ability to implement a total customer strategy can be undermined by a variety of shortcomings, among them a lack of leadership or an inadequate internal infrastructure. Having observed a range of approaches, we find that the most successful customer strategies arise from company cultures that adhere to five mutually supporting principles — each of which is driven from the top but also supported zealously across all levels of company leadership. A closer look at each principle offers lessons for senior executives seeking to design, promote, and lead more customer-centric cultures in their own organizations.
A customer-centric talent agenda
An organization’s identity will always be defined by its people — especially when it comes to creating a customer-focused culture. Therefore, executives need to determine how to build and sustain their company’s capacity to deliver customer service aligned with the company’s purpose. As organizations seek to attract and retain talent, they must consider what qualities and attributes each position, team, or function requires. For example, will collaboration, responsiveness, and service agility outweigh the need for more resilient and competitive independent contributors? Deciphering the talent part of the equation will enable companies to develop a workforce that can serve customers effectively and support broader organizational objectives.
Meaningful customer service values
Visit nearly any boardroom or corporate reception area and you will find powerful and inspiring articulations of mission, purpose, and vision. While these statements offer windows into an organization’s aspirations, they often fail to translate to a differentiated — and meaningful — customer experience. To operationalize the value of these potent statements, leaders need to consider three questions:
- What are our customers telling us they need? Data analytics can provide a window into the customer’s rational and emotional needs.
- How can we harness these analytics to drive day-to-day behaviors and processes? To deliver the desired customer experience, companies must synthesize and socialize customer service values throughout the enterprise.
- How can we connect customer service values to our organization’s purpose? Companies can deliver a relevant and branded customer experience by connecting day-to-day activities to business goals.
Posing these questions helps leaders to not only start to frame and define the organization’s customer service values but also better ensure that employees at all levels can understand and articulate how their actions contribute to success.
One company that has proven successful at creating meaningful customer service values and putting them into action is Verizon Communications. Indeed, the company’s mission statement speaks directly to both ambitions: “enabling people and businesses to communicate with each other,” underpinned by a “commitment to full and open communication with our customers, employees, and investors.” The company’s strong, data-led focus on customers helps Verizon maintain an edge when it comes to innovation and delivering against market needs. Moreover, fostering a culture of honesty and a genuine desire to measure stakeholder needs (including those of employees, who after all must operationalize the values) has helped Verizon achieve high rankings as a preferred employer. Such a reputation can help a company jumpstart a virtuous cycle, as empowered and motivated employees invariably bring a company more opportunities for innovation and growth.
Establishing customer service values as part of the organization’s bedrock is not enough, however. Another task for senior executives is empowering employees to be able to deliver these service values in the ways that matter most to their customers. This challenge is daunting, even for the most mature and grounded leaders and organizations, but it is essential for two primary reasons:
- Frontline employees must place the customer at the center of all that they do. To deliver an outstanding customer experience, these workers must combine the agility to respond to customer needs with the autonomy to make informed decisions and trade-offs.
- Company leaders must have access to information from the field. An engaged front line helps executives keep a finger on the pulse of the customer and the market, monitor trends, and pursue opportunities.
Moreover, a culture of empowerment must be tied closely to the company’s purpose in order to be effective. And while senior executives may know the broad outcomes they want to see from more empowered employees, they should also remain flexible and open about how staff accomplishes these goals, so as to ultimately reflect — and indeed, amplify — the natural talents of their employees.
Living up to its motto of “We are Ladies and Gentlemen serving Ladies and Gentlemen,” the Ritz-Carlton empowers its employees by budgeting $2,000 for every employee to spend to create memorable guest experiences. To be sure, employees are encouraged not to wield this authority recklessly, but it nonetheless sends a strong signal to them of the company’s “whatever-it-takes” philosophy to delight its guests.
A strong sense of accountability
In moving toward an empowered customer-centric culture that leverages talent effectively, leaders must select indicators to gauge performance and track progress for both behaviors and outcomes. While the latter is always easier to capture, leadership is crucial to measure the former: executives must promote behaviors that encompass not only what customers desire but also what the organization unequivocally stands for. This task becomes easier if the talent agenda is tightly aligned with — and fuels — the company’s customer service values.
By using robust and timely customer-driven metrics that extend down to the team level, leaders and managers gain visibility into customer satisfaction. This effort must be supported by a tenacious commitment to customer-focused, day-to-day behaviors. Both behaviors and outcomes offer company leaders and frontline associates alike the levers that can be used to drive performance in an effort to increase innovation, profits, revenue growth, and market share.
For example, one global automotive company integrated a customer engagement incentive into its overall performance metrics (traditionally, these were individual, sales-based targets) at auto dealerships across one of its North American regions. This shared measurement resulted in a far more seamless customer journey and a collective effort by staff to deliver the branded experience that the automaker was looking for. Here, a concerted effort on shaping the right behaviors had a direct impact on sales, with the more engaged showrooms able to increase their sales by 21% a year.
Leaders who “walk the talk”
Executives should not be fixated on performance measurement exclusively. Time and again, senior executives have found to their dismay that if they are unable to motivate their teams, it’s nearly impossible to deliver an excellent customer experience. The final component of a successful customer-centric strategy involves leaders who:
- Model the desired behavior through action, conversation, and professional development to reinforce what the organization stands for and what customers are demanding
- Celebrate the best-in-class performers on both behavioral and outcome dimensions
When executives promote customer service values, it sends a strong signal throughout the organization that management recognizes the customer as central to its existence. Likewise, recognizing standout employees creates customer service “heroes” who can serve as examples to their counterparts. These heroes allow ownership of the journey to be widely shared and embraced, thus creating a heightened sense of purpose and greater connectivity among employees, the organization, and its leadership.
Strong, customer-centric cultures offer organizations an organic, and sustainable, avenue to better results. However, such cultures don’t emerge and flourish on their own. Leaders who better understand the building blocks of strong customer cultures will have the edge when it comes to implementing, shaping, and sustaining them. The stakes are high: the effort could prove to be the difference between growth — and stagnation — for companies competing in an era characterized by heightened digital competition.