The concept of customer centricity is not new. In 1954, Peter Drucker wrote in his book The practice of Management:
“It is the customer who determines what a business is, what it produces, and whether it will prosper.”
Today almost every company vision includes customer centricity as a key driver of its strategy. Forrester defines it as “a system of shared values and behaviors that focus employees on delivering great customer experiences.” Companies that adopt this philosophy are 60% more profitable compared to companies that are not focused on the customer. Yet many companies are still struggling to fully understand, embrace or integrate customer centricity in their DNA.
Businesses focus on metrics. From net promoter scores, to overall satisfaction, to loyalty measurements. Though these measurements are important indicators, they are not sufficient to show the company’s maturity and commitment to customer centricity.
Customer Centricity is a journey and not a destination. It evolves and changes over time in response to changing market environments and customer sophistication. It is mainly related to customer understanding, organizational culture, its structure and processes, and is primarily driven by strong leadership commitment, employee behavior/ engagement and a single-minded approach to delivering on target customer expectations.
Historically, companies tended to be very product-centric. They were focused on producing superior quality products with the motto “if you build it, they will come.” As long as companies made sure that their product quality was superior to the competition, they were successful. Later, as customer demand evolved, companies developed the discipline of brand management, or marketing. They started packaging product, service, solution and image, creating a brand value which was hard to copy. This required a deeper understanding of the target consumer, so that products offered not only functional value but emotional value.
Today, the market looks very different. Consumers choose when, where and how they want to interact with brands. At the same time, consumers are inundated with as many as 5,000 ads a day, causing an ever-increasing headache trying to cut through the clutter. In fact, a recent survey of Canadian media consumption by Microsoft concluded that the average attention span had fallen to eight seconds, down from 12 in the year 2000.
Cutting through the clutter with customer centricity
The customer experience goes beyond the brand to fully understand the customer journey touch points and the pain points. It is about developing empathy for the customer and building a relationship that creates intangible value for the company. Customer Centricity is taking this intangible value and institutionalizing it throughout the organization by making it part of the company’s psyche, creating a sustainable leverage that drives value and differentiation.
Customer Centric culture starts with a philosophy and ends in practical policies, processes, organizational structure, talent management and employee engagement. But it is difficult to measure. Every day we see examples of individual employee going beyond the call of duty to serve a customer. But is it about individual heroics or company culture attributing to these efforts? The answer is to create conditions that make those outcomes more likely to naturally occur. For example, Corporate Executive Board (CEB) uses over 1,500 companies’ data to see trends and analyzing employee customer centricity across 5 dimensions: customer focus, alignment, teamwork, empowerment/agility and leadership. The report gives specific recommendations regarding what companies must focus on to drive a customer-centric culture transformation.
Additionally, research shows that an engaged workforce is a big part of the answer. The research company Temkin Group found a correlation between efforts in employee engagement and success in customer focus. In its 2016 Employee Engagement Benchmark Study, the firm revealed that companies which excel at customer experience have “1.5 times as many engaged employees as do customer experience laggards.” Despite the impressive impact, most companies are failing at this challenge.
According to a recent Gallup poll, only 30 percent of the U.S. workforce consider itself engaged in work. Even worse, only 15% of the worlds workforce is engaged at work. These results show that we need to transform our workplace cultures. Every time we talk about customer focus, we should be thinking about employee engagement as well.
The success lies not only in institutionalizing models and processes but learning from real life examples and companies that have shown success. There is a direct link between the best companies to work for and customer centric culture. Companies in the top 20 of the list e.g. Google, Salesforce and Intuit etc. have customer obsession. David Lo – Vice President of Intuit said in an interview:
“We believe empirically that the company that understands the customer best is going to win. The world is changing around us, the customer base, technology and the environment. For these reasons, we are more focused than ever at the company level on how we be more customer centric. We call it customer obsession.”
You can learn more about Intuit’s transformation in this Harvard Business Review article.
Customer centricity at Schneider Electric
At Schneider Electric, we are committed to creating an environment to promote a customer centric culture. Our industry is evolving with higher customer expectations, technology and competitive pressure. Our leadership has strong commitment to customer focus and our CEO Jean-Pascal Tricoire is very clear on this topic “Our #1 priority, Delight Customers with a tailored and outstanding end-to-end experience.”
We have metrics, programs and rituals in place from Net Promoter Score to Net Satisfaction Score. We have programs like customer personas to customer journey mapping to customer voice. Now we are on the path of creating a customer centric culture, where the whole will be greater than the sum of these activities. We are looking at the models that have been successful in some of the best in class companies regardless of Industry. But as I said earlier, Customer Centricity is a journey and not a destination.
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