Start with the Customer

Remember when?

When I was younger, I remember going with my dad to his tailor. The moment he walked into the store, the salespeople greeted him by name. They knew his shirt size and were familiar enough with his wardrobe to provide recommendations for his current visit. However, this was just a moment in this relationship. There were so many factors at play that worked together to determine how long this relationship would last, how loyal my dad would remain, and the total amount he would spend over the duration of this relationship. Was the price he paid a reasonable value exchange? What happened when he returned something, was he treated fairly? Did the tailor keep my dad abreast of seasonal discounts? Was the tailor involved with his community? Was the tailor a good steward of his environment? All of these variables and more add up and become the entire customer experience.

What’s the most important asset of a business?

Try searching “what’s the most important asset of a business?”. You’ll find overwhelming results affirming that your employees are your most important asset. I wholeheartedly agree; they should be among your top five. However, the simple fact is that without customers, you have no business. The total life-long revenue earned from your customers is indicative of the health of your organization.

Steve Jobs, Apple Co-Founder, encouraged his team to start with the customer experience and work backwards. That’s the focus of a customer-centric company or customer-centricity.

What’s customer-centricity?

The concept of customer-centricity is a strategy that puts the customer at the centre. It’s leading through customer empathy. An empathy that extends to the customer’s emotional needs, understanding the reasons behind those needs, and responding appropriately (Yohn, 2018). Then, developing an empathetic response at scale and across your organization. As Gartner Research Director Olive Huang puts it, “you must win at every interaction the customer has with your organization, whether that be a marketing campaign, a call to a contact center, an invoice, or a delivery reliant on the supply chain.”

Why is this important?

Because "service with a smile" is no longer enough. 

New customers are hard to find. It's less expensive to maintain existing customers than to acquire new ones, and new customers tend to be less loyal. Loyal customers spend more and are less likely to seek business elsewhere (Frankenfield, 2020).

The Third Edition of Salesforce Research's State of the Connected Customer provides compelling insights from more than eight thousand consumers and business buyers worldwide. I'd like to highlight some key findings from the study that warrant attention. 

Customer-centricity is not a new concept; companies have been upping their customer experience efforts for a long time. However, 73% of customers claimed that just one extraordinary experience raises their expectations for every other company in the study. For example, 59% of customers expect every company to match Amazon’s shipping speed. Another example highlights customers’ expectations to transact with companies seamlessly across all channels - an omnichannel experience; this was particularly important to generation Z (born after 1995) customers. When companies weren’t able to meet these elevated expectations, 61% of customers stated that they felt like the companies didn’t care. As the study points out, 73% of customers expect companies to use new technologies to create better experiences; this has led to a frantic race in which companies transform how they foster their digitally savvy relationships with customers, raising expectations further.

While superior customer service implies a singular focus on a specific customer event, customers evaluate your business based on their entire, life-long experience with you. As you automate your processes through artificial intelligence (AI), consider that 84% of customers still value being treated like a person. After all, your competition is only a click away, and 76% of customers recognize how easy it is to take their business elsewhere.

There are opportunities to offset these costs. Most customers are willing to pay more for enhanced customer experience and value their experience more than the product quality itself; the two are often considered part of a complete package. In addition, customers are less likely to seek business elsewhere, allowing you to earn more significant lifetime revenue per customer (Frankenfield, 2020).

Why is this so difficult?

While technology has made life better, easier, faster, it’s also raised expectations on multiple levels. Big data, for example, make customer data available to companies, but the volume, velocity and variety of data overwhelm the most sophisticated companies, let alone the typical small business (Yohn, 2018). Yet, 71% of customers expect companies to communicate with them in real-time, and 78% of customers expect the first person they speak with at a company to solve complex issues. Despite their omnichannel behaviours, customers expect customer service representatives to access the same information across the organization.

As the volume of potential channels to reach (and interact with) customers grows, the customer journey becomes increasingly complex, nonlinear and fragmented. 64% of customers stated that they had used multiple devices to start and complete transactions. 78% prefer different channels depending on the context of where they are or what they’re doing.

Elusive trust

The COVID-19 pandemic has dramatically changed customer buying behaviour; most seek products and services from brands they know and trust. The study found that 89% of customers are more loyal to companies they trust, and 65% stopped buying from companies deemed distrustful. 

Trust is a foundational element in customer relationships, but it’s a nuanced subject. As the diagram “Earning Customer Trust Is a Multifaceted Pursuit” illustrates, trust is elusive because of the many factors that can enhance or erode it. Factors that have become elevated recently by technology advances in authenticity, security, and privacy. Customers in the study acknowledge that it’s harder to earn their trust. 41% of customers don’t believe companies care about their data security, and 63% of customers say most companies aren’t transparent about what they do with their data.

How can we improve?

Design solutions start with the customer. Asking questions such as “what’s good for the customer?” and “did we help solve their problem?”.

Connect internal systems so that customer data is more easily shared, focusing on customer relationship management software (CRM) vendors such as Salesforce and HubSpot, particularly as it pertains to marketing, sales, service and commerce systems. Salesforce has a tool called Customer 360; HubSpot has The Flywheel Model (see diagrams below); both promise a 360-degree view of the customer, and equally important, ensuring that everyone within the organization has a single view the customer and the role of the customer experience.

McKinsey & Company offers a more scientific approach that some progressive sales organizations employ (see below). It’s a domino-triggered approach starting with a centralized operation to pool sales data to generate insights. The data is then made available through an agile omnichannel model supported by automated sales processes. The approach ultimately requires a more sophisticated frontline team, reskilled and tailored to match the advanced and more complex customer journey.

Own the entire experience for customers by offering a one-stop shopping experience from inspiration to delivery to support and after-purchase service.

It calls for a customer-centric culture

The entire organization must adopt it for the customer-centric approach to work; this is its Achilles heel. Every employee must assume and understand the organization’s customer-centric culture to respond appropriately to customer needs (Yohn, 2018). Too often, however, as Tiffani Bova, Salesforce’s Global Customer Growth and Innovation Evangelist, points out, “employees often operate with a myopic, territorial view of customer experience.” Most organizations need to make a fundamental “internal culture [shift] from product-centred to customer-centred.”

Customer opinions extend beyond their shopping transactions to collective societal issues; they expect companies to operate ethically with them and in a manner that’s in the best interests of their communities, which is contradictory to Milton Friedman’s popular shareholder theory.

As the study identifies, the Fourth Industrial Revolution sees technology and ethics intertwined. For example, 71% of customers expect companies to state their position on equal rights clearly. 76% of customers think companies are responsible for giving back to the communities where they do business. 78% of customers believe companies are responsible for taking steps to reduce climate change.

Looking ahead

Starting with the customer at the centre ensures that your people, objectives, strategy and technology align with your most important assets, your customers.

References

(2019, April 18) Salesforce Research, State of the Connected Customer. Third Edition. Insights from over 8,000 consumers and business buyers worldwide

Chappuis, B., Cruz, G., Ellencweig, B., Valdivieso, M., and Viertler, M. (2020, October 1). The domino effect: How sales leaders are reinventing go-to-market in the next normal. McKinsey & Company. Retrieved from https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-domino-effect-how-sales-leaders-are-reinventing-go-to-market-in-the-next-normal

Frankenfield, Jake (2020, August 23). Client-Centric. Business Essentials. Investopedia. Retrieved from https://www.investopedia.com/terms/c/client-centric.asp

McGinnis, Devon (2019, January 29). How to Create a Customer-Centric Experience. Salesforce Blog. Retrieved from https://www.salesforce.com/blog/2019/01/how-to-create-a-customer-centric-experience.html

Posner, E. (2019, August 22). Milton Friedman Was Wrong. The Atlantic. Retrieved from https://www.theatlantic.com/ideas/archive/2019/08/milton-friedman-shareholder-wrong/596545/

The Flywheel Model. How the flywheel drives business growth and customer delight. HubSpot. Retrieved from https://www.hubspot.com/flywheel

Yohn, Denise L. (2018, October 2). 6 Ways to Build a Customer-Centric Culture. Harvard Business Review. Retrieved from https://hbr.org/2018/10/6-ways-to-build-a-customer-centric-culture