Sunday, February 16, 2014

Customer-Centricity vs. Profitibility

Exert lots of intelligence, look for insights, use the imagination, but make validation, predictability

Becoming a customer-centric organization has been articulated in many businesses’ strategic agenda. However, the reality is that profitability and customer-centricity are both integral parts of any successful business model and company. Without customers, an organization cannot survive and without profitability, an organization cannot grow and understand its customer needs and requirements. So what’re the logic scenarios to become the customer-centric business, while also be profitable to keep the business running and growing?

It's always about the hierarchy of priorities in the corporate strategy. You cannot do everything at once. Something always has to be done first. When growth considerations make the top of the corporate priority list, then decisions inside the company at every managerial level will be done in one direction instead of another. Opting for short-term profits is the easier, more tempting alternative. In reality, companies have to look after both shareholders and customers but a good executive team knows exactly what to do when a conflict of interests arises. 

Having a clear understanding of how customer-centric approaches enhance the business model and extend profitability. It requires consistently digging deeper and having level two metrics in place that keep a pulse on the inner workings of the business. Everything from how pricing is affecting close times and support calls to referral business activity triggered by high customer satisfaction. While some companies could increase profit in the short term, to lose a customer-centric approach will impact the bottom line in the long run. Having a strong sense of how to develop customer-centric programs within the business -- that means the infrastructure to combine technology and business tactics. 

Customer Experience assessment tool looks at a company's culture around the customer, and how that culture is embedded in the organization. The index score looks at both of those measures on a weighted scale. There is one characteristic of truly customer-centric companies in that they tend to be much more innovative because they understand the markets they serve. This is a result of the long-term relationship they build with customers, and the short-sighted quarterly results driven management models to fail. 

From customer integration to customer experience: Customer integration, behavioral, emotional, social and transactional design are well understood and practiced. Being customer-centric is not just a few best practice or even high-level customer interface, it has to go deeper to integrate all key business ingredients in orchestrating a high mature business which has key capabilities to delight customers. Exert lots of intelligence, do data analytics, look for insights, use the imagination, but make validation, predictability, try to inspire everybody and fight to make your organization customer-centric but keep at the profitable trail for the long run.

From Top-Down strategy to Bottom-Up approach. The strategic plan needs to be well articulated, communicated, made personally relevant to all employees and sustained that reflects customer desired outcomes and the relevant measures on par with producer-centered criteria in measures of success. The reward/ consequences system (include compensation and personal performance system criteria) needs to be fundamentally changed at the beginning and sustained over the backsliding period. Goes beyond the commitment to customer centricity at the top of the organization -- it requires expertise in leading a customer-centric organization. Besides internal talent and process, the tools and vendors alone represent a set of capabilities that many senior executives are unaware even exit

Being customer-centric needs to be business’s long-term goal, but achieving profitability is a strategic aspect of  business’s surviving and thriving, especially for many struggling vertical sectors today, the balancing act of looking to increase profit while keeping a customer-centric strategy of the business is perhaps tricky sometimes, as it takes thought-through planning and integrated approach to leveraging multiple factors to achieve expected performance. 


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