If you are a typical executive, you’re worried about things like how your sales, marketing and call centers are doing. You are concerned with the products you are selling, how many customers you are acquiring, and about customer loyalty and retention. You think about getting the right customers; you think about the product development team getting the right products into the pipeline. No matter what the role – from IT and operations to marketing and channel management – most people in these groups do their best to serve their customers. But more often than not, knowledge of customers isn’t shared from one group to the next.
Most companies tend to look at the world through the lens of these internal silos, groups and divisions that dictate how things are done, and which “own” different aspects of the customer and the data that surrounds them. The problem with this "inside-out" view is that is doesn't take the customers perspective into account. Customers don't look at your company this way.
Customers look at companies from the outside in, through the lens of their goals and objectives, irrespective of the channel or group they're dealing with. Most organizations do a poor job of understanding not only their customers' wants and needs but how their customers feel about the company as an entity. As a customer, you expect the same experience from a company regardless of the product or service you own, the objective you’re trying to reach, or the channel or device through which you interact with them.
Whether it’s the call center, a website, a product, a mobile interface or any other channel, you expect there to be a consistent, end-to-end experience. If the experience isn’t consistent across segments, journeys, channels or devices, it feels broken from the customer’s perspective.
Moving from an inside-out to an outside-in focus means changing how your organization looks at the world. This change of focus is critical to becoming customer-centric. For all companies, this means change. For some, it means changing the culture as well. For instance, a company that has an inside-out view is probably not going to have its employee incentive structure aligned around delivering a better customer experience or meeting customer needs. A sales-oriented corporate culture does not necessarily care about what customers truly need; it is focused on what it can sell them. Such a company might need to change its reward structure to focus on what’s most important to customers and that entails a culture shift.
It takes time to make these changes, to improve and to identify the systems and the people that need to be in place, and then to deliver on those improvements. In most cases, the culture shift involves training existing team members to change their perceptions or replacing them with people who are prepared to embrace the new culture. Expect this shift to take some time.
When a company begins to focus on the customer experience, it begins to see the journeys that customers take and to understand from a customer perspective how customers are moving through their relationship with the company. Once the company has articulated those journeys, and codified and mapped them out visually, it is then able to look at its internal processes, systems, capabilities, and data and see how those various internal and operational components connect to the customer’s experience.
For example, one large company examined its customers' “pre-purchase” journey – from “unknown to known” (or initial discovery of the company), through online product trial and on through purchase. The company found there was absolutely no data congruity between one stage and another. This meant that somebody in the organization, or the customer, had to reenter nearly all of a customer's data at each stage in the process. Aligning internal systems with the customer view allows you to identify and close such gaps in operations, improving experience, removing friction and making the process easier for your customers and your people. The result is operations and systems that are aligned around designing and delivering a consistently superb customer experience.
One of the most common barriers to being intelligent about customer experience is lack of customer knowledge or understanding. The truth is, not all customers are of equal value to your company. Some represent larger portions of revenue; some are more engaged; some are more influential with other customers.
The lens of customer experience, focused on your most valuable customers first, allows you to prioritize where you focus your improvement efforts. It’s also an important first step. But most companies stop here. You cannot afford to. Why? It doesn’t help you understand what one customer needs versus another.
The bottom line is that if you don’t segment customers by their individual needs, it will be incredibly difficult to deliver exceptional customer experience or to remain competitive. It is very important to prioritize your customers based not only on what customers are worth to you, but also on what they want and need. Since you can’t change everything at once, you need to prioritize your improvement efforts by understanding which customers are the most valuable to your company, as well as what’s most important to them.
Back in the mid 20th century, the average lifespan of a company's tenure on the S&P 500 was as much as 40 to 50 years. Today that lifespan is around 12 to 15 years. The pace of change is accelerating such that in 10 to 15 years, 75 percent of the companies on today's S&P 500 list will no longer be there. One company is replaced about every two weeks.
The list of companies – and industries – that have been disrupted by these changes is a long one. Companies like Blockbuster and Borders. Industries such as music, publishing and retail. Seven out of ten executives today are running the next Kodak; the next company that was huge yesterday but nowhere today. Unfortunately, these executives do not yet know that they're in this position.
In short, the world has changed dramatically, but many companies have not. Forget about innovation, they’re not even sure how to keep up. This is the challenge that companies need to confront, to understand what is changing – with their customers, their markets and their competition – so that they can innovate and avoid obsolescence.