Are We Building Our Companies Inside-Out?

Yes, this depression will come and it will go (albeit with scars to show for it). But once we have retrenched half our staff, squeezed our suppliers out of business, and fitted energy saving light bulbs throughout the office, how will life return? No sooner has the Managing Director disembarked the low cost airline after ‘successfully’ completing his national road show encouraging his staff to think of ways to reduce costs, has the fat started to build again. We just don't get it do we? Improvement has to be a way of life - not a rescue operation.


2011 and beyond...

The situation

With ripples of the one of the greatest global economic slumps in history are still being felt across all corners of the globe, top executives have been scrambling to stop the bleeding and cushion the aftermath. Organisations have been turning to all sorts of methodologies to save costs and turn things around. Lean, Six Sigma, Theory of Constraints, Systems Thinking and other improvement methodologies have all been discussion points in the boardroom to change the colour of the bottom line.


The problem

In many cases however, these methodologies are executed as stand alone projects and result in fads rather than newly adopted ways of working. Too often these methodologies are implemented to simply tackle inefficiencies and subsequently drive down costs. Don't get me wrong, it’s not that these methodologies cannot add value, it’s more a case of how they are implemented that is often their downfall. The top line of the income statement is quickly neglected, sometimes even forgotten, and so little attention is allocated to understanding what is important to the customer.


As we emerge from the economic downturn and life slowly returns to ‘normal’, we shall all revert back to focusing on the customer - or will we?


The opportunity

We need a shift in thinking - placing more emphasis on the customer and how our product or service can add so much value that our customers not only willingly return, they bring their friends. If we focus on value from a customer perspective, we not only drive revenue, we automatically have to consider the efficiency (cost) and effectiveness (impact) of our service offering. One such approach that looks to increase revenue and save costs is Customer Experience Management.


Building great customer experiences...

The customer experience is simply an interaction between an organisation and a customer. This interaction, made up of both rational and emotional factors, is intuitively measured against expectations across all moments of contact. In order to build customer loyalty, you have to win over a customer’s heart (emotional) as well as their head (rational). If we know what emotion we want to evoke in our customers, we have a better idea of how to create a more effective customer experience that builds customer loyalty.


Understand that your customers are human too

One cannot forget that we all sell to humans. Whether you are a municipal worker or the president, we all have feelings. We require a change in mindset and approach in building great customer experiences.

It is said that people buy one of two things:

  • good feelings, or
  • solutions to problems


If we not selling solutions to problems, we need to sell them feelings. This challenges the way we view our service/product offering. Consider the below as examples.

  • Don't sell people clothes - sell them fashion, warmth, style.
  • Don't sell people insurance - sell them peace of mind, security.
  • Don't sell people houses - sell them an investment, pride of ownership.


In order to know what emotion you wish to evoke, you need to know two things: who is your customer and what drives their behaviour. Segmenting your customer base and understanding what drives their behaviour is essential in building a customer experience that matches their critical needs. There is no sense spending time and money customising a customer experience for a target market that brings in only 20% of your revenue. Focus on positively changing the behavior of your most important customers.


So how do we get to understand what excites our customers? We ask them!

Companies that are getting it right time and time again are those that engage with their customers on a regular basis. They invite customers to participate in focus groups, they ask for suggestions, listen to complaints on public blogs and forums. Apple, who is currently taking the world by storm with their innovative products, is one such company that carefully listens to their customers. It is through understanding the needs of their raving fans that they can continuously deliver a knock-out punch when launching new products.


Embedding a customer centered culture...

Creating great customer experiences can not be executed in a vacuum. Simply designing and executing a customer experience improvement program in isolation is quite frankly just window-dressing. Sustainable returns on investment are derived by building happy customers. Happy customers are derived by happy employees. Happy employees are derived by great leaders. Think about it, your staff more than likely treat your customers the way their management treat them.


Leadership is key to embarking on any improvement initiative - especially customer experience management. The leaders of the organisation have to not only believe in it, but  have to live it. Leading by example is non-negotiable characteristic in establishing a customer-centered organisation.


If the ideal is to create customer fans, how does one create employees that deliver great customer experiences day in and day out?


Employ the right people

It sounds so basic, yet it is so frequently forgotten. How often do companies employ someone to then spend the next five years trying to get rid of them? The right person needs to demonstrate the values that are aligned with your customer orientated culture. The right attitude with less skills is more valuable than the right skills with the wrong attitude. Southwest Airlines takes this exact approach when recruiting inflight attendants. Having the right personality comes first. They believe they can teach you the rest (skills).


Empower your staff

Once the right people are on the bus, empower them to delight your customers. Customer centric organisations allow those closest to the customer to make decisions.  Traditional companies’ frontline staff have to ask their managers. If you employed people with the right values, you should trust their judgement. The Ritz-Carlton issue $2,000 to every newly trained employee to use at their own discretion in resolving customer-related issues.


Training and career development

If you have the right people in your organisation, the last thing you want is to lose them. Invest in your team - let them excel by developing them (training, education, etc). Map out a career path with them. Show your faith in them and they shall show you their loyalty.


Performance management

Incentivised staff are not limited to sales representatives. Acknowledge and reward staff who have delighted customers. This should be the biggest focus area of any reward system. Effective performance measurements don't just drive the right behavior, they rocognise them. Help your staff to win and accomplish their goals.


Traditional Business Models...

We are all in the business of selling. Without a customer, we don't have a business. One would then think that managing the customer experience is the most critical role of any business. So why is this so often not the case? I call it Customer Experience Blindness and are typically a result of two key factors:

the higher you climb the corporate ladder, the further removed you are from the customer - those that make the big decisions are not in touch with their customers.

the bigger the organisation gets, the more departments are created, and the moe fragmented or dispersed the customer experience becomes - resulting in no-one overseeing the customer experience holistically.

So what is the solution?

  • Make the customer a focal point of everything you do.
  • Live the customer experience - test your own service/product.
  • Walk in the shoes of your customer and discover what they experience.
  • Break down the silo effect through cross-pollination of department meetings, performance measures, etc.
  • Think in process teams, not entities.


Where to from here...?

The 21st century customer is a dynamic one. The global economy is truly upon us with competition emerging from all parts of the world. The critical question then is - how will the 21st century business survive? We now know that offering a good product or service is a given and is really just a ticket to the game. To differentiate yourself and take center stage, you need to offer something special, something different, something that can will get people talking. If you are willing to take the journey of improving your business outside-in, the customer experience may just be the solution.


Contributed by Andrew Richmond, Customer Experience Specialist, Outside-Insight South Africa