Over the past six years, there has been a shift in the number of organizations that have embraced customer experience management as a core operating model. Key findings from the 2018 North American Study on Customer Centricity.
About 120 senior leaders participated in the 2018 North American Study on Customer Centricity, titled “What Is Your Customer-Centric DNA?” Since 2012, Janet LeBlanc + Associates has surveyed North American leaders to learn how they shape the culture of their organizations to focus on the customer. Released in a series of e-books, the results have been benchmarked against previous findings to identify evolving trends and behaviors.
A person’s DNA can be defined as the fundamental and distinctive characteristics or qualities of someone, especially when regarded as unchangeable. By extension, “organizational DNA” is the well-ingrained value system that guides its decision-making and how it behaves.
A truly customer-centric organization has successfully engaged and aligned all employees around meeting and exceeding customer expectations. Working together, they have mastered the ability to intentionally design—and consistently deliver—a customer experience across all products, channels and brands.
The processes to design, organize and oversee every interaction between a customer and the organization is managed through a disciplined approach and methodology throughout the customer lifecycle.
Emerging Trends Identified in the Study
Over the past six years, there has been a fundamental shift in the number of organizations that have embraced customer experience management as a core operating model.
According to the study, a greater number of senior leaders recognize that improving the customer experience is not simply a rally cry to boost morale and productivity. Instead, they understand it as a viable business strategy that will drive business and financial results.
CEO Jeff Bezos guides Amazon with a clear vision to “create the world’s most customer-centric company.” Airbnb, Netflix and Uber are other examples of global firms that are driving the experience economy by using an improved customer experience as their core business strategy.
Despite having gained a better understanding of what it takes to achieve true customer centricity, the majority of survey participants have only begun developing their strategy or taking their first steps of implementing transformational change.
Among those who have made progress, some recognize that, despite quick wins at the beginning of implementation, they are further away from achieving their goal than they first thought.
The toughest stumbling blocks are often legacy challenges that are so deeply ingrained. Employees will say, “We have had that customer problem for years.” This is where cultural transformation is most needed to overcome them.
The Journey Toward Customer Centricity
Janet LeBlanc + Associates’ Customer-Centric Index® maps the progress of organizations across four phases on their journey to becoming truly customer centric:
Infancy: Strategic alignment and building leadership support are essential at this phase. Setting the vision and strategy for aligning the customer experience with business strategies and goals is also essential.
Developing: Building a coalition of sponsors and recruiting change advocates are needed at this phase. Educating employees about what the future will look like helps employees understand their role in driving customer experience improvements.
Transforming: Commitment and endurance are needed during this phase to see a long-term transformation come to fruition. Corporate patience is a must to keep customer experience initiatives on track for the duration of the journey. Communicating success stories helps to keep employees motivated and on track.
Truly Customer Centric: Achieving customer centricity is a major accomplishment and must be recognized and reinforced. Organizations must protect against complacency by keeping the organization focused on emerging customer expectations.
(Figure 1 shows organizations’ progress across the four phases from 2014 through 2018.)
Figure 1: Progress Across the Four Phases on the Journey to Becoming Customer Centric
Results from the 2018 North American Study on Customer Centricity show a decline of 5% from 2016 of those organizations who view themselves as truly customer centric.
Best Practices: The Five Pillars of Customer Centricity
Beyond the four phases of progress that organizations navigate to become truly customer centric are the essential practices required to drive this progress. Janet LeBlanc + Associates designed a standard framework of essential practices containing five pillars of customer centricity.
Together, they identify the various behaviors needed to instill customer experience as the core operating model for the organization—to shift the culture toward customer centricity.
Pillar One: Understand How to Strategically Align Around the Customer
Strategic alignment with the customer requires a shared vision of the ideal experience. It requires a clear articulation of how the customer fits within the organizational mission (why we exist) and within the firm’s value statements (what we believe in and how we behave). It also requires the senior leadership team to unite the organization around a shared vision of the ideal experience (what we want to be) with a clear sense of purpose defined for everyone’s role in serving the customer.
The 2018 survey results show an impressive gain since 2012 in the area of “measuring the impact of customer experience initiatives on business performance” (see Table 1). This key value driver of strategic alignment is critical to the drive toward customer centricity.
Table 1: Key Value Drivers of Strategic Alignment
Customer-focused organizations can empirically prove the link between how customers perceive the quality of their experience and various key elements of loyalty behavior such as willingness to buy more, reluctance to switch and likelihood to recommend.
The most customer-centric organizations understand what actions are critical for driving revenue, rescuing customers at risk, as well as retaining and growing share of wallet. They are reaping the benefits of delivering exceptional customer experiences through repeat business, valuable word-of-mouth advertising and reduced cost to serve.
Pillar Two: Recognize the Importance of Senior Leadership
No one leader can achieve customer centricity alone. Instead, a strong coalition must exist across the organization to bring about transformational change.
Silo-based thinking is the nemesis of true customer centricity. By examining the end-to-end customer experience across functional departments, organizations can identify redundant steps, poor hand-offs from one department to the next, duplicate work and costly time-wasters.
Senior leaders need to do the hard work required to move from silo-based business planning to a cross-organizational focus on customer priorities. When senior leaders use shared metrics and cross-functional accountability to deliver the ideal customer experience, they are taking another important step toward becoming truly customer centric. Collaboration must move from an informal structure to formal multidisciplinary teams, with customer priorities at the center of these discussions. (See Table 2.)
Table 2: Key Value Drivers of Senior Leadership
Pillar Three: Integrate Customer Perspectives
into Everything You Do
With rapidly changing customer expectations, organizations today have a stronger will to understand customer requirements and how they perceive the quality of the experience. They also understand the need to collect and analyze customer feedback through a variety of sources, from structured surveys to social media feedback.
Many organizations are building comprehensive voice of the customer programs to develop a 360-degree view of the customer across all products, channels and interaction points. “Voice of the customer” is a term used to describe a corporate-wide system designed to capture customer perspectives about their experiences. These perspectives are then integrated into business planning systems, process improvement initiatives and employee engagement practices.
Almost half of those surveyed for the 2018 North American Study on Customer Centricity report being able to respond immediately to pressing customer issues. One-third regularly ask customers to evaluate their performance relative to competitors. Twenty-two percent of respondents’ report “regularly tracking the cost of poor quality and its impact on the customer experience.” This represents a 13% increase since 2012. (See Table 3.)
Table 3: Key Value Drivers of Customer Insights
Considering how difficult relationships are to strengthen, they are remarkably easy to lose. Understanding where the customer experience is unreliable and the resulting cost of poor quality to the organization can help answer some of the following questions:
- Do leaders fully understand the economics of the customer experience?
- Are customer issues visible throughout the company at all times?
- Are leaders deliberate about knowing which customers are at risk?
- Is there shared accountability for solving customer issues?
Pillar Four: Engage Employees to Deliver a Branded Customer Experience®
A Branded Customer Experience® is intentionally designed and consistently delivered across all products, channels and brands. The customer experience brings a brand to life. Every interaction with employees or transaction online provides an opportunity to reinforce the branded experience that represents the ideal experience expected of customers.
To truly embrace customer centricity, everyone in the organization must understand their role in delivering the ideal customer experience and what they need to do differently to improve it. (See table 4.)
Table 4: Key Value Drivers of employee engagement
Employees can make or break your customer experience. They are the face, the voice, the character, and the performance of the company. The ability to deliver a consistent, high-quality experience across every interaction is what separates the good from the great.
Pillar Five: Measure and Reward Customer Experience Improvements
An organization’s performance measurement system includes the ongoing monitoring and reporting of progress toward reaching its goals. It is the internal system that collects, collates, reports, and recognizes the risks and rewards along the way.
The purpose of performance measurement is to assist the organization in making decisions about where to invest resources, how to adapt to market changes, and where its people, processes or technology might not be measuring up to expectations.
Organizations that measure and reward customer experience improvements as part of their overall corporate performance system have adopted a customer-centric mentality. Employees at all levels of the organization are more easily motivated by what is measured and rewarded. Linking customer experience metrics to a corporate-wide performance measurement system sends a clear message to employees about the importance of customer experience to the success of the business. (See table 5.)
Table 5: Key Value Drivers of Measurement and Rewards
The Journey Continues
The 2018 North American Study on Customer Centricity reveals a clear progress toward bringing the customer closer to the forefront of the business. Delivering a Branded Customer Experience® includes a collaborative, cross-functional approach to intentionally design, and consistently deliver, the ideal experience during every interaction between a customer and the organization throughout the customer lifecycle.
Customer-Centric Index® and Branded Customer Experience® are registered trademarks of Janet LeBlanc & Associates Inc. All Rights Reserved.