“How to Become a Customer-Centric Company” – Ken Bernhardt
Customer-centricity has become a hot topic in marketing recently. A Google search on “customer-centric” yielded 4,120,000 results. Consulting companies, large and small, have been promoting their capabilities to help companies become customer-centric. Some use the term customer-focused and some like Forrester prefer customer-obsessed, but all share similar thinking regarding what companies should be doing.
Dictionary.com defines customer-centric as “placing the customer at the center of a company’s marketing effort, focusing on customers rather than sales.” In my opinion, this definition is too narrow because it limits the centricity to marketing. I believe that being customer-centric means that all the processes and activities of a company, not just marketing, are done in support of what the customer is trying to accomplish. In other words, customers (and prospective customers who are now customers of competitors) are at the core of the company’s decision-making.
Last January, Talkdesk.com compiled the Top 10 Customer-Centric Companies of 2014 from multiple polls and identified Amazon as number one.
Amazon’s founder and CEO Jeff Bezos established the company’s customer-centric culture in several important ways.
At meetings where important decisions are being made, he leaves one chair open at the conference table, making it clear to everyone that the seat represents the customer – – “the most important person in the room.” Bezos also believes that everyone should spend time in a call center to gain insights into the customer perspective, and he periodically fields calls himself.
Apple is another top 10 customer-centric company. There, engineers don’t begin by talking about technology; they start by talking about customer pain points that the company could solve. The customer is at the center of what the company does and the thinking yields solutions like the Genius Bar. The CEO, Tim Cook, reads customer emails daily, keeping him in touch with customers’ needs and desires.
Bain & Company has conducted often-cited research that reports that 80 percent of companies surveyed believe they deliver a “superior experience” to customers, but their customers stated that only 8 percent of these companies were really delivering on that. Numerous research studies show that those companies that are customer-centric regularly outperform their competition.
So how does a company become customer-centric? First, it requires a cultural transformation driven from the top. Customer input and understanding must be infused throughout the organization. Strategic intent, why the company exists and what it wants to be known for, must be clear throughout the organization. Perhaps the best example is Ritz Carlton’s Credo: “We are ladies and gentleman serving ladies and gentleman.” At the Mayo Clinic, everyone understands that “the patient comes first” and at Ace Hardware, “Ace is the Helpful Hardware Place” makes it clear that helpful is what they are all about.
The desired customer-centric positioning and differentiation must be translated effectively to the total internal organization. That requires a clear understanding of who the customer is and what is to be delivered to customers. At Chick-fil-A, another Top 10 customer-centric organization, the mantra to employees is “Be REMARKable” (meaning provide an experience so outstanding that customers will remark or tell others about it).
Measurement is also a critical success factor. Many companies today measure customer satisfaction or their Net Promoter Score, but this alone is not sufficient. The key is having metrics that can be used to affect behavior throughout the organization: What is the customer retention rate (or conversely, churn rate) and what are the factors that cause the churn? What are the factors that drive Customer Lifetime Value? What do customers have on their wish list of things they wish the company did better?
A powerful combination is having employees who have a comprehensive understanding of customers and their needs and are empowered to make decisions that are for the benefit of the customer. Employees must take their cues from the company’s leadership and truly believe that the customer comes first. The company must invest the time and dollars in soft skills training such as customer service and relationship building. As J. Willard Marriott said in listing the companies core principles, “Take care of your people and they will take care of your customers.”
What are the impediments to building a customer-centric company? According to research cited by Marketingprofs.com, silos that prevent customer data sharing, lack of a common definition of what it means to be customer-centric, and the organization being focused on sales instead of the customer are among the major contributors to failure. Other pitfalls include failure to get broad-based buy-in and losing focus before the cultural transformation is completed.
Becoming truly customer-centric is not easy. It is a multi-year journey, but one with a very high payoff.
Ken Bernhardt is Regents Professor of Marketing Emeritus at Georgia State University’s Robinson College of Business and a marketing consultant. He can be reached at email@example.com. This post appeared previously in the Atlanta Business Chronicle.