Customer Strategy

How to become a customer centric business

“Being customer-centric means spending more time thinking about what customers want and also about what needs they have, even if those needs aren’t immediately apparent.” This quote from Steven A. Kandarian, CEO at MetLife sums up the way we need to start thinking about transforming our businesses around our customers.

by Adrian Clamp (contact)
5 minute read

Now that just about any product is available on demand, the days of brand loyalty are behind us. Today, customers have countless options to choose from and if you disappoint them, the relationship is usually over. If you are not meeting their needs—sooner than anyone else and maybe even before they actually know what they need—they will not let you try again.

Promising this excellent customer experience is one thing but actually getting the job done is another. Unless you create an internal structure and mindset that enables you to be completely customer-centric, your customers will ultimately flow through a chain of unconnected and inconsistent experiences, recognise a failed promise and never give you a second chance. An effective customer management strategy can help.

Develop a customer centric culture

Culture is a living part of your organisation’s brand and one that is the most transparent to your customers. What your brand says to customers through marketing and communications and what your employees actually deliver has the potential to be poles apart. The words and actions of your teams is what your customers will remember. Therefore, creating a culture where employees deliver your brand promise because they want to and because it sits well with their moral compass is the first place to start. Recruiting the right people into your organisation is important but making it easy for teams to implement meaningful change – no matter how small is crucial.

Use digital technology across the enterprise

Organisations often begin their digital capability by incubating e-commerce or e-service efforts in a separate business unit. While this approach may be effective in getting a new initiative off the ground, it is not necessarily going to be scalable to deliver a true multi-channel business. This requires commitment and alignment across the whole organisation which is difficult when departments have different motivations and are scattered geographically. Ultimately, customers don’t care about the structure of your organisation. They want to do what they want, when they want, how they want.

Organisations who are winning in this space are doing so by re-integrating digital back into the organisation as an additional mode of engagement, rather than a standalone channel. John Lewis, TSB and First Direct have a strong focus on customer experience strategy. They offer a seamless experience across all their customer touch points as they have invested considerably in aligning channels and distribution.

In our recent research American Express sets the UK benchmark. They already offer an outstanding experience for customers on the phone but now their recently transformed online portal also gives customers the ability to manage cards, apply for cashback, or talk to someone from the support team all within this channel. The developments aim to reduce the effort required from customers to manage their finances.

“ Organisations with an integrated and consistent branded channel experience are likely to continue to outperform the UK market in experience excellence”, David Conway, Director KPMG Nunwood.

Eliminate silos

Many balance scorecards are starting to take customer experience into account. We are seeing a change away from measuring the progress of individual department silos and channels, towards measurement of the quality of delivery at different touchpoints in the customer journey. This is also evident in the way many firms are restructuring around the customer – by functions that support the same service delivery.

After several years of operating separate entities, Macy’s[1] restructured its merchandising and marketing teams to better serve customers no matter how they shop. It recognised a clear shift in shoppers and shopping habits acknowledging those who shop on the phone or online 24/7 as well as those who remain traditional and purchase instore. Macy’s reshaped key functions but also created new ones such as regional teams devoted to special projects or teams focused solely on multi cultural customer needs. The retailer has been able to increase productivity and profitability whilst at the same time delivering a fast and seamless omnichannel and personalised experience for its customers.

Align incentives

All organisations fight hard enough for customers and sales—they should not have to exert energy fighting internally for sales allocation credit. To be more effective it’s important to look at total sales to align the incentives of their front-line employees with those of staff at HQ. This should be regardless of where customers order, pay, or interact.

In the UK TSB have made significant changes in order to improve customer experience and drive customer satisfaction. By removing sales targets, making all employees partners and completely changing the variable pay regime across the entire bank, they have created a brand new business culture. This new culture, coupled with the introduction of the ‘TSB experience programme’ across head office as well customer-facing roles, was combined with the creation of a single distribution function responsible for key customer interactions, be that digital, face to face or through brokers. This has helped to deliver a consistently great customer experience.

Customer centric business transformation is one of the toughest challenges facing every organisation today. But the challenge needs addressing head on as the link between culture, employee behaviour, customer experience and commercial outcomes is growing ever closer.

 

 

[1] Forbes: “Macy’s Restructuring Positions It For Future Growth,” 13 Jan 2015

 

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