thinking like a customer

thinking like a customer

Can We Prove Customer-Centered Is Better?

By on March 17, 2010

Why should any supplier-centric organization switch to being customer-centric? It’s not difficult to imagine the arguments against the change: “Customer-centricity is an abstract idea. It involves a culture change. We prefer pragmatic results to ideology. Show us the benefits.”

Much has been written about the ‘How’ of customer-centricity, but not a lot about the ‘Why’. There is proof, of course, of the advantages. Research has shown that customer-centric organizations had a 36% higher return on investment than their industries’ median performance because they were focused on a specific purpose. (Corporate Culture and Performance, by Kotter,Heskett). The transformation of Best Buy’s customer strategy has been well-documented (Reorganize for Resilience, by Gulati). But it is easy to look at the evidence as “not applicable to our company.” Where’s the tangible proof?

Remember the Fosbury Flop? It was the 1968 Olympics in Mexico City. Dick Fosbury shocked the world and captured the gold medal by breaking the world record for the high jump by jumping over the bar backwards (facing up). Prior to that time, all high jumpers had used a face-down, straddle technique of rolling their legs over the bar during their jump. Today, virtually all Olympic-caliber high jumpers use the technique that Fosbury invented.

Deveshwar quote_lrgCustomer-centricity is as transformative as Fosbury’s game-changing technique. Becoming customer-centered provides purpose to the corporate mission. But it cannot be started with a ‘2 + 2 = 4’ mindset. It is a difference maker because it is a unifying force for entire organizations. It will bring about cross-pollination of perspectives between departments, resulting in teamwork built around integrated mindsets, rather than segregated, silo mentalities, to work through complex customer strategies.

The leaders of customer-centric organizations must have a fundamental belief in becoming the best, coupled with the realization that they will not get there via the traditional product-centered path from the past. They have the attitude displayed by Yogesh Chander Deveshwar, Chairman & CEO, ITC. "Either we become world-class or we leave the business." (1,000 CEOs, by Andrew Davidson, editor).

Y.C. Deveshwar took over a 'rudderless' business and re-oriented it. Under his leadership (since 1996), ITC has transformed itself by focusing on a corporate strategy that synergizes shareholder value creation with societal goals. Yogesh Deveshwar’s vision for the company is "A Commitment beyond the Market" and excellence in sustainability practices. It is that kind of vision that structures all customer-centric organizations.

Customer-centricity starts with the knowledge that performance will improve because it provides organizations with purpose and empowers employees to focus on customer outcomes. But the impact, both external and internal, is clearly measurable after it is implemented. Next week we will introduce you to a method for proving that customer-centricity is really better.

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One Response to “Can We Prove Customer-Centered Is Better?”

  1. [...] this may sound more intangible than actionable, Corporate Culture and Performance (as cited on Thinking Like a Customer) credits customer-centric organizations with a 36% higher ROI (return on investment) than their [...]

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