Customer centricity: Doing the right thing for the customer

The strategy of customer centricity is a well accepted method of winning customer satisfaction, loyalty and even increased profits, argues Stephen Hewett of consultancy Charteris. But where to begin?

In most organisations, between 50% and 70% of internal effort expended doesn't add any real value to what the organisation is achieving for its customers? This seems a little alarming, giving today's increasing focus on internal efficiencies. But when you consider what people say about the calibre of customer service they receive from many organisations, perhaps these research findings are not entirely surprising. The question that Charteris asked itself was simple: What can be done to improve the situation?

No single secret exists
Nobody knows for certain the secret of creating a successful business. Indeed, there is no single secret of success. Businesspeople who have achieved success enjoy writing autobiographies in which they tell the stories of their business life. But they usually imply they saw everything coming and that their success story was pre-ordained apart, perhaps, from an occasional brief hiccup.

So can we ever really learn very much of practical usefulness from business celebrities' autobiographies? Probably not, because these books don't usually acknowledge the point that every successful business has - to some extent - been fortunate in that it was doing whatever it was doing at just the right time.

However, there are some extremely useful underlying strategies that can help. Some of these strategies offer new ways of getting real clarity on the ideas, approaches and tactics that work beyond even the most optimistic expectations. And one of the most useful, interesting, empowering and transforming strategies in the business world today is customer centricity.

Unpretentious, and here to stay
What's good about customer centricity is that it's unpretentious, it's not a fad, it's not clouded with jargon, and is generally opposed to all the things that can be so annoying about "management speak" and "flavour of the month" management concepts. In fact, it brings you back to basics.

One of the insights from customer centricity is that it's easy to forget why the business began. And this can apply to anyone at an organisation. Senior executives, and even board members, are far from being immune to it. Yet customer centricity, properly deployed, is much more than a mere antidote to this forgetfulness. At its best, customer centricity can transform an organisation into being everything the organisation should be, but which it can so easily fail to be.

Defining customer centricity
The role of customer centricity in business is still evolving, though. But we do need a working definition, and an informal definition might be "the process of ensuring that every individual and department within an organisation is taking every step feasible to add value to what the organisation does for its customers".
It's also useful to work towards your own more formal definition, which includes details of the actual processes whereby customer centricity can be achieved.

The essential mindset behind customer centricity isn't new. Visit the open market at Marrakech in Morocco - or any other busy marketplace in the world, for that matter - and you'll see the concept of customer centricity at work (at least at the most successful stalls). It has, in effect, been around since the very dawn of business.

Where CRM failed
Our modern economy is more sophisticated than the market at Marrakech, though the need for making customers feel special is no less important. Our modern business economy likes to relate new strategic concepts to old ones, and so customer centricity is increasingly regarded as both a descendant and replacement for customer relationship management (CRM), which many still regard as a failed concept (even if the failure was largely in the execution rather than in the concept itself). But whether or not you agree that CRM was a failure, it's difficult to be convinced that the CRM approach of regarding quality customer service as something you can instil in an organisation by installing a piece of software is really going to work, unless you were highly customer centric already. The problem with CRM systems is that they tend to 'gloss over' an organisation's deficiencies in the area of customer service.

This causes a double problem: there is less return on the large investment in the CRM system than might otherwise have been the case, and the underlying problems go unresolved.

Customer centricity, however, does not come packaged in a box, and it isn't something you can pay someone to install and then go back to going about your business pretty much as you did before. Instead, customer centricity is an entire strategy for running your organisation so that you focus every aspect of what you do around the needs of your customers.

As the business and IT consultancy Charteris defines customer centricity, it is "the alignment of organisational structure, processes and technology to deliver products and services to internal and external customers in the most agile way". Note that, in this definition, the technology angle is just one part of the story. And perhaps the most important point to make about customer centricity is that to become customer centric an organisation really does need to look hard at crucial factors such as its culture, processes and ways of doing things before it brings in new technology that is designed to facilitate customer centricity. Becoming customer centric is not just an item on the agenda of a board meeting... it is the agenda. It's also - for those who may have forgotten - why you're in business in the first place.

When organisations first start trading they usually have the very clearest idea of what they are in business to do, who does what, and why. Every person involved in a start-up will know how they add value to the finished product or service and who they need to work with internally to make sure the best service or product is delivered to customers. They will know this because looking after the customer is why they set up the business in the first place.

Losing touch through growth
But when the business succeeds it grows. To start with, as it grows, the founders and the new staff may be able to keep alive the flame that embodies the spirit of why they are in business. But sooner or later, somewhere along the line, the flame will diminish or even go out completely, as the clarity of why you are in business fades. Once that clarity starts to fade, customer centricity fades with it.

As organisations grow in, size a curious effect almost always occurs: Staff members start to look inward, worry about their own internal departmental issues and become more and more remote from the actual agenda of the customer. Staff begin to create internal processes and agendas that have little - or may indeed have nothing at all - to do with adding value to the external customer. It's common for whole new business areas and departments to be created to deal with and manage these internal issues.

Of course an organisation that is getting bigger needs internal departments if is going to function properly. An organisation consisting of half a dozen people doesn't need a Human Resources department or an IT department, while an organisation with perhaps 75+ people certainly does need them. And people work for job satisfaction, too. Generally speaking, people prefer to do a good day's work than a bad day's work. People like taking some action that directly or indirectly involves them looking after customers because it makes them feel that they're doing a good job. The trouble is, too many large organisations forget this, and don't give their staff the opportunities or encouragement to look after customers properly. This problem applies particularly to staff working in internal departments that don't have a direct interface with customers, though it often applies to customer-facing departments too. And because people in those internal departments perceive that the organisation doesn't empower them to take steps to understand their role in looking after customers, they start to drift and lose focus at a motivational level.

Always add value
The best way to ensure that you deliver what the external customer really wants is to make sure that each step in your customer chain adds value to whatever is eventually delivered to them. In practice, within a large organisation, it is almost inevitable that most of the departments will not be customer-facing. And here the very size of a large organisation can conspire against it being successful. The organisation needs to be certain, at all times, of what every individual person and every department is doing that adds value to the paying customer by providing top-quality products and services to customers directly or by doing things that directly facilitate the provision to customers.

The remedy is to achieve agility in how the organisation is run, and how every element in the chain links together. Make sure everyone knows who their own key internal and external customers are, and what products and services each of them needs (and are prepared to pay for, in the case of external customers). Take steps to assess whether your customer chain is delivering products and services most effectively at the lowest cost. Be ready to start making your organisation customer centric from first principles, and be adamant that you won't paper over the cracks in those parts of your organisation that aren't agile and flexible enough to demonstrate very clearly the role they play in the chain.

Preparing for change
Above all, be honest and prepare yourself for long-term incremental change. Build a group of stakeholders from all levels who understand the concept of customer centricity, what it requires, and who can preach it to others. Ultimately you will need to drive the customer centricity concept and principles throughout all aspects of the business including strategic vision, people, process, organisational structure, information and technology.

You can grow customer centricity within your organisation on a department by department basis: you don't need to do it all at once. And when you are ready to implement the technology, you'll find there is plenty of great technology out there - systems for workflow management, enterprise resource planning (ERP), database management, business intelligence (BI) tools, and so on.

But remember that, deep down in your organisation, the chain that will delight your customers and your shareholders may possibly already exist, obscured by internally focused organisation design, poor process, inappropriately deployed technology, and perhaps even a lack of vision. Liberate that chain, and watch your business grow again.

Eight steps to take next
Charteris recommends a simple eight-point plan for maximising customer centricity within an organisation:

1. Identify who your primary and secondary customers are.
    
2. Identify the products and services they consume and through which channels (web, call centre, bricks and mortar and so on).
    
3. Work out where the crucial 'points of addition' occur in adding value to those products and services.
    
4. Make sure each of the business areas involved in these points of addition know how they - the business areas - add value to these products and services.
    
5. Align the organisational structure to support these points of addition.
    
6. Minimise the activities that don't add value to what the customer is getting from the organisation.
    
7. Ensure that the correct measurements maintain and improve the processes.
    
8. Support where appropriate with technology solutions.

"Written by Steven Hewett of Charteris and republished with permission from theWiseMarketer.com ( The Wise Marketer )