By Jayne Archbold, CEO Sage Enterprise Market Europe
When the management of a company makes the decision to become customer centric, how does it reach this conclusion, and at what point does the customer become involved in making that decision? Who leads the charge?
A good idea
A lot of companies like the idea of customer centricity – but fail to follow through correctly when trying to achieve it. Sometimes it’s down to company culture, with too many individual fiefdoms, dysfunctional employee interaction and a sheer failure of vision at the heart of it. Sometimes it’s because (whisper it) customer centricity doesn’t work for their specific, esoteric, line of business, or is too close to what they’re already doing. Sometimes, there’s actually a very benign reason: the company is already pretty close to being customer-centric already. This may have been a conscious decision, or it may simply be a fantastic company culture geared towards excellent customer service and making sure products are developed with continual feedback from the people who use them day to day.
Who leads, and who follows?
Regardless of all of these, there’s the question of who leads the charge to this new state. Does the customer pull a business towards customer centricity, or is it something that companies must do?
My firm belief is that it’s a little of both – but the business has to take the first step.
Let me explain why.
It’s good practice to maintain a dialogue with customers, especially when a business is changing. Long term customers know more about your business than you might think, and are often in a position to give insight that may not be obvious to you. Identifying the lifetime value of your customers – and working out which ones are likely to stay with you in the long term – is a good first step. The second is to actually tell these customers what your company is going to do.
A study by Booz & Co found that, of the companies it surveyed that had attempted to move to customer centricity, those that shared their vision with their customers were the ones that were invariably successful. There are a couple of reasons for this, but the one that stuck out to me was this: planning for customer centricity in the long term, communicating that intention to long term customers, and applying targets to customer profitability, as opposed to customer profitability, ensured that the whole process wasn’t a nice, fluffy, flash-in-the-pan diktat from the top of the company. It moved the idea of customer centricity in the minds of front line employees and the customers they dealt with from being some sort of fashionable management fad to being a solid, concrete, long term change to the way the company measured profitability and success.
Of course, that’s not to say that making the move abruptly and publicly is good practice – thorough planning, structured experimentation and comprehensive testing are required. Just as important is a strong leadership capable of breaking down internal walls and personal fiefdoms, and an internal structure that allows the free flow of information.
So, why is the customer important in all of this? Simply put – because they become the new value centre, rather than the products your company develops. Someone once said that a product-centric business developed a product, and tried to get as many customers as possible for it. A customer centric business developed customers, and tried to sell as many products as possible to them. But for this to occur, those products still need to be desirable, up to the job and affordable. Putting the customer first in the relationship ensures this – but strong management is imperative to ensuring that such product development doesn’t come at the expense of profitability. The creation of a customer centric business should absolutely involve the customers as early as possible – but a strong hand on the wheel is vital to ensure that no-one forgets that their employer also has to make a profit from what is done on the customer’s behalf.