Friday, January 31, 2014

A Customer-Centric Strategy

Digital is the Age of Customers. 

 In essence, the digital era is the age of customer; customer-centricity becomes the goal to right fit business’s purpose –to create more customers. However, since there are many elements to customer-centricity, the key to success is focus on something that will "move the needle." For some companies it's the customer experience; for others, product excellence. And some can build loyalty through low cost/price., etc. So how should forward-looking organizations craft their customer-centric strategy?

Customer Centricity is about linking your strategy to the customer, linking your process to strategy and linking your technology to your process. Customer centricity is about an attitude or a passion to do what’s good for customers you target. The customer-centric strategy shall serve the purpose of generating a positive customer experience that contains a commercial value. As we have entered and exist in "the age of the empowered customer" with all the challenges that it brings!

Customer Centricity is about how to sustain customer value, the customers experience is both an output/outcome as well as acting as input to future improvements and innovations. So innovation and customer centricity have to be built into the business strategy, the fundamentals of the business model and in the DNA of organization such as corporate culture.  It is important to building a new model around 'sustainable customer value' that aligns customer expectations with customer experience, staff expectations and corporate vision and values.

Policy formulation is a crucial step in customer centricity. An organization’s policies are either Customer Centric or they are not. Process redesign should not  take place until policy formulation has taken place.A move towards Customer Centricity can be delivered through policies that are taking the Customer perspective not the Process perspective.Customer resolution is as much driven by the policy that informs or governs the process as much as by the physical act of the task at hand. 

Customer Centricity is built upon rigorous business’s capabilities & processes. In order to improve the process, questioning the reason of existence of the processes in the first instance, ask the questions; Should this process even exist in the first place? Or is it an inability to imagine a different perspective that could be the big resistance to Customer Centricity taking a firmer hold? Overly rigid process is an outcome of using rigid process approaches where they don't belong. Process approaches fit for service, but don't restrict – they should support by getting the right information to the right people at the right time. 

People factor is critical in Customer Centricity. There is a unique element in effective genuine "human connection" that cannot be standardized because of its very nature. Without that human connection, the outcome is far more dependent of task excellence. It is the element that can greatly influence the "memorable" part of the experience for the customer - the part they deem worth talking about. Great people with poor processes can still occasionally give great outcomes - talented and engaged people can shelter customers from bad processes although only with much greater effort, and therefore, the much greater cost to the organization. But disengaged employees will never wow a customer, no matter how great the processes behind them.

Action-effect: Action is always part of the good strategy. It is incumbent on the organization to prove its capability to deliver a unique and differentiated experience consistently. It requires 1) a blend of strategic thinking -what do you intend to do in the future to create high contrast customer experiences, 2) an ability to execute-demonstrable evidence that the business is actually doing something to build differentiation and 3) Effect -as a result of executing against the plan, the organization is able to deliver a differentiated experience as well as generate improved business performance. The 'effect' dimension often lags of course but this is the determinant of a successful strategy. 

Measure Customer-Centric Score: There's plenty of industry research to show that customer-centricity links to business performance. Customer-centricity has, at least, five dimensions: strategy, people, process/experience design, technology, and metrics. One thing to measure an organization’s Customer Centricity score is the measurement of the gap. On one side of the gap is how well you understand your customers and on the other side is how well you deliver to your customers. The narrower the gap then the more Customer Centric (CC) you are. Once recognition of the gap exists then the journey starts towards CC starts. Usually measuring how well you are delivering to your customers is relatively easy but developing a true measure of how well one understands their Customers is the hard part. It is akin to measuring the difference between somebody knowing something versus understanding something.

Customer-centric strategy takes the outside-in view and put the customer at the center of business strategy. Customer centric strategy needs to be full-fledged and has objective and tactics assigned to various departments and measure business performance systematically.


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