thinking like a customer

thinking like a customer

Beautiful Evidence

By on March 24, 2010

Okay. What will happen if your organization becomes customer-centric? Will it be worth it? Business leaders want “beautiful evidence”* that their companies will become better and even unique. And the evidence has to be motivating. Otherwise, the effort will become sidetracked because of scattered forces.

Customer-Centricity_lrgOne enemy standing in the way of success is lack of clarity. So we've created the Customer-Centric Index™ (CCI) to track our clients’ performance. The index measures closeness with external customers and strength of relationships with internal customers. It's geared to focus on silo-busting. It's systematic and consists of highly-specific measures of the behaviors that experience tells us will make those clients' organizations more customer-centric.

The CCI is a dynamic tool that allows an organization to track its level of customer-centricity against its customer satisfaction scores in order to monitor changes in customers’ perceptions of its performance. Because the CCI is behavioral, it's also an excellent yardstick for trends in business performance, including profits, problem-handling, and organizational efficiencies. It is heuristic and enables discoveries that focus an organization on metrics rather than intangible “feel-good” reasons for taking care of the customer.

Fred Reichheld's well-known book, The Loyalty Effect, is almost 15 years old. While many of the principles it espouses are still true, the book presents these ideas from a “selling” viewpoint, concentrating on the advantages for the business in terms of customer retention, recommendation, and the efficiencies that accompany these categories. Of course it's always cheaper and more effective to keep a customer buying from you rather than to find a new one. But the nature of loyalty has changed.

Today, keeping customers requires staying even more closely in tune with their experiences. Undoubtedly, the customer landscape has changed in the last 15 years. Customers want the best price from your organization, and thanks to the Internet they can easily find out what your competitors are charging. The barriers to customers leaving you for a lower-priced alternative are much lower. Although they might continue to buy from you, their comments to others may not always present accurate and positive messages about you. In addition, in most cases your most loyal customers have higher expectations from your organization than your average customers (according to Jeremy Alexis's "Using Design to Create Fiercely Loyal Customers" in the book Building Design Strategy).

Customer-centricity has come of age primarily because the customer has many more options than in the past. Being product-centered is dispiriting to businesses and employees because it unrealistically expects customers to behave in traditional ways. Worse, when businesses are supplier-centered, it's much more difficult to detect “drift” in their customer focus. Ambiguity can and will set in.

The CCI is the key to making the connection. It puts the ambiguous into an ordered, recognizable and repeatable system. It's a measure of the quality of the interactions your organization has with your customers. It provides specific data that takes your organization’s buy-in from “soft” benefits to a straightforward, tangible understanding of the behaviors that provide value for your customers. If you're transitioning to being more customer-focused, it's critical to define and measure the impact those changes will have.

In the journey toward becoming customer-centered, organizations must develop their own evidence, based on what they have determined to be most important in driving deeper customer value. Using the CCI, they can track improvements against profits and customer satisfaction to clearly understand the influence that "thinking like a customer" has on their overall performance. Customer-centricity is transformative. Now, with a valid measurement system, its time has come.

*Thanks to Edward R. Tufte for the phrase, Beautiful Evidence.

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