Episode 15

The business game is hard. Coordination of people, processes, and technology requires an aligning vision or purpose to guide priorities, establish culture, and foster the development of a brand image. To gain better market understanding and differentiate from their competition, many organizations are shifting to a customer centric view. But organizations have always cared about customer needs, so what makes this shift different? How can it be applied?

Customer centric processes are different because they start at the very foundation of the organization. A customer focus will be explicitly stated in the organization’s vision and mission statements and is commonly held as a core value. Ideally, all customer centric decisions can point back to the vision, mission, and values. A common example of customer centric values would be “The Customer is Always Right”, with more modern interpretations like Amazon’s “Customer Obsession” motto.

The largest difference in customer centric processes when compared to traditional business norms is through redefining the brand to focus on the customer experience, not the product or service the firm provides. The shift from product focus to customer focus has numerous ramifications. Does the best possible product provide the best possible experience? Does the best possible experience require the best possible product? Now ask the same questions but with price, place, and promotion. It is not necessary to have the lowest price, best product, best location, or most engaging advertisement to provide the best possible customer experience. Everyone has a situation where they paid a little more, travelled a little further, or waited a little longer because they felt “product B” would provide a better experience. And now in the world of social media, individual user experiences uploaded to platforms like YouTube can sway purchase decisions.

experience

There are other dimensions to consider, let us look at supply versus demand driven; reactive versus proactive; standardized versus personalized. Marginal cost of production in many industries is a race to zero and this relationship is no more apparent than in consumer electronics. Firms do not flourish when the lowest cost wins. Economies of scale powered by standardization has provided us great abundance; however, as margins get squeezed firms can fall into a trap. It is a self-defeating trap when the focus is purely on squeezing value from the supply chain. The trap is further magnified when and the only reaction to changing market forces are when the firm forced to, because change is viewed internally as an unwanted expense. To break the habit, leaders must look back at the vision, mission, and values, and ask: what will provide the best client experience? To provide the best experience, demand must be anticipated, change must be proactive, and the product or service must feel personalized. The business game has shifted from maximizing transaction volumes to maximizing lifetime customer value. Lifetime value is driven by the chain of positive experiences derived from your brand.

Now you’re thinking, sure, experience is important, but providing a personalized experience is well beyond the capacity of our organization, plus all that hands-on customer service cannot be cheap. Most organizations are sitting on gold mines of data waiting to be turned into insights. Take for instance a parts supplier that can proactively service its products for its clients, eliminating the typical reactionary process of the client calling customer service when the part fails. Sensor data can be streamed from devices in the field and preventive maintenance routines can be developed. Technology is enabling organizations to predicted demand, provide proactive responses, and personalized experiences at scale. It is that great feeling when the barista knows your name (with correct spelling) and has your quad long shot grande in a venti cup half calf double cupped no sleeve salted caramel mocha latte ready by the time you are at the counter. Cameras near the entrance remember your face and recall your last order, instead of placing your order with a barista, you walk to a counter, and confirm your order with a thumbs up, and proceed to pick up your order from a service stall with your customer number.

Humans are interesting creatures, details like names and activities can long be forgotten, but we will always remember how that last brand experience made us feel. To stay in the game, it is about the processes that provide for the customer, the best possible experience.