Service Transformation

Creating an accountable, customer-focused business

The pursuit of a faultless customer service is placing a new emphasis on how the whole workforce can be motivated to play its part

by Adrian Clamp (contact)
6 minute read

The past few years has seen a notable shift in focus from products to customers across many industries. Companies are increasingly realising one of the key ways to improve the customer experience begins with their employees and the culture in which they operate.

To do this, a different way of organising your business is increasingly required. Rather than just thinking in terms of siloed functions, such as finance, marketing and IT each working towards their own internal goals, every business function must share the same goal, namely pleasing the customer.

Technology and market research company Forrester estimates that 2017 will see one-third of B2C companies start to transform their business structure in order to get closer to the customer. They also argue that the chief marketing officer (CMO) of the future will need to be ‘whole-brained’, able to combine the creativity needed to design interesting customer experiences with the technical, analytical know-how to deliver them in a personalised way. Forrester estimates that 30% of CMOs will be let go due to their inability to match up these needs.

Embarking on this transformation is a daunting prospect. The goal of a great customer experience is made up of many small positive outcomes. Knowing where to start, and what has to be measured, is a complex process. There is, however, a common theme among companies that have made a successful transition: before looking out to the customer, they looked in at their own employees.

Culture is key
For a customer-centric model to be highly effective, you have to create a culture in which employees actually want to please the customer, not just do it because they are required to. The first question to ask, therefore, is does the culture you have support or inhibit your strategic, customer related goals? Finding that out involves deep self-analysis and the willingness to ask hard questions about the way your business functions.

In many companies, the direction of communication is purely top down. Lower level employees, who often know most about the customer’s needs, have no way of relaying their insight up to those at C-level. When they try, office politics often prevents bad customer feedback from rising beyond middle management level. Opening up those lines of communication and allowing employees the opportunity to share their insights is a significant step towards creating an accountable, customer-focused organisation.    

C-level executives also have to ask themselves whether internal procedures or regulations are shackling employees’ efforts to serve the customer. At luxury hotel group Ritz-Carlton, who place significant emphasis on improving the customer experience, every employee is allowed to spend up to US$2,000 on solving a customer problem without having to seek approval from a manager. By empowering employees in this way, taking the initiative to solve customer problems becomes instinctive.

Thinking like a customer
Energising outward-facing employees is one thing. To get a whole organisation working towards a common goal requires you to ensure that each employee has a line of sight to the customer and understands how their performance has a positive final impact.

TV company Sky Italia chose four years ago to differentiate itself through customer experience, setting the goal of becoming the world’s best customer-led entertainment and communications company[1]. Across the organisation employees are encouraged to fight against the tendency to think they already know something. While business key performance indicators (KPIs) may reveal one thing, the goal is to discover how the customer perceives a situation. The company recently reinforced this idea with an internal marketing campaign consisting of videos that featured on-air talent working alongside back-office staff. The message is clear: everyone should focus on the customer and anyone can make a difference to their experience.

Social media has made the process of business transformation easier in some ways but harder in others. People have shown a clear willingness to discuss their relationship with the brands they use. This provides huge amounts of data that is invaluable for any company trying to become customer-focused.

At the same time, social media has multiplied the number of available engagement channels. Employees need to be aware of these new platforms and technologies. Interacting with and learning from the customer is no longer the preserve of marketing, but the responsibility of every employee.

Investing in success
Changing company culture is a tough task. This is made more difficult by the fact that so many success metrics are qualitative rather than quantitative judgments. The key in this regard is to create a scorecard that puts your long-term relationship with the customer at its centre, with metrics like customer lifetime value, revenue from repeat customers and customer profitability.

This approach has worked well for Royal Bank of Canada. By focusing on lifetime customer value it realised that medical and dental students, while not an attractive segment at the moment, could be some of the most loyal, profitable customers over the long term. It devised a number of products geared towards that group, such as low-interest tuition and car loans. The bank’s share of that market rose from 2% to 18% in the space of a year[2].

The customer is now in charge and accepting this is the difference between thriving and dying. A good employee culture is the bedrock on which innovative, competitive, future-proof companies will be built.

 

[1] Susan Wakefield, Customer Experience Director, Sky Italia, Forrester CX Europe Oct 2016

[2] Maxie Schmidt-Subramanian, Senior Analyst. Forrester CX Europe Oct 2016

 

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