CEO dilemma: if my company has been in the comfort zone for decades how can I make my organization more customer centric and innovative?
Customer Centricity is the current buzz word in business and it might seem easy as a concept, however, it can be difficult to reach. Today, customer intimacy and “being closer to the customer” are a real concern in several organizations. Companies need to be more customer centric and agile. Especially in companies that have had stable and profitable models for years. When you have a comfortable position in a market, your business works, your margins are high, and you can defend them through pricing, why should you “really be concerned” for customer? All this is fine when entry barriers and competitive advantages are high. And if this happens during several years you become addicted to your present business model comfort zone and any change becomes more difficult. However, today several economic sectors are under transformation. Lower competitive advantages force companies and organizations to evolve, be leaner and come closer to customers. But if your company has been in the comfort zone for decades how do you change the model? Do you really need “costly transformation” programs to do this?
Recently, we had the opportunity to support one of our global clients in Europe to think up ways to put in place a real Customer Centric culture. This decision was inspired by the CEO and its management team. Our client operates in a B2C sector in which competitive advantages are decreasing whereas management costs (such as R&D) are rising and competition is becoming more aggressive. This probably sounds familiar.
Today, in many businesses an evolution is required to get closer to customers, evolving from a traditional business model towards Cocreation of value with customers.
Forced by competitive changes in their sectors many companies need to evolve towards a more Customer Centric model, turning inward organisations outwards and substantially closer to customer needs. All this taking a lean and agile approach. This journey starts with making sure your management team is sensitive to the subject and understands what it means. This is the beginning, but how do you move into action? Our vision: “no big programs, but use agile thinking and define concrete action steps”.
Look for change, but do not start by setting up bold programs and spending fortunes on transformation programs. Be smart. Learn to act in a more subtle and effective way.
One of the key points is to evolve and transform your company culture to become more customer oriented without big investments. You can easily do this by building a simple “customer centric program” integrated with your management processes. A structured system in which your team leaves and leads customer centricity.
Getting your company to become truly Customer Centric and understanding how to better provide solutions to their needs is the basis for a real, digital or not, business transformation.
How to define a “lean customer centric program” for your company to improve business results. Basically, three simple steps:
- Live your customers: define how to connect with customers, and get the right insights
- Integrate customer needs into your system: make sure you integrate your customer insights in your day-to-day, put them in the center of your business
- Transform your customer findings into new initiatives: identify concrete challenges you want to solve using this new Customer Centric approach
Let’s look at each of these points in some more detail.
1. Live with your customers: How to connect with customers?
An intelligent way could be, for example, to challenge your team by asking:
- How can we look at the market from a different angle?
- How can we capture and use our “customer ecosystem” insights?
- How will we really put consumers, shoppers, customers and partners at the heart of what we do, and actively generate more external inspiration?
Start identifying your relevant customer, prescriber and influencer targets. Map out your customer ecosystem. Segment them and find a way to “make them come alive”.
There are different and powerful ways to bring the voice of your customers inside your organization and this is not just about “satisfaction surveys” or traditional inquiries. For example, use the Persona technique if needed to “make customers concrete and real” and to help your organisation “feel and sense” them. You can also conduct some empathic or ethnographic research to more deeply explore and understand their real life, needs and identify interesting “pain points” you could try to solve with your offering. Listen to them, feel their story telling, learn to read between lines… There is a lot to get inspired!
This is the moment to see and listen to the what the customer has to say about concrete topics, identify barriers, challenges or opportunities you feel are relevant for achieving your strategic goals and to conduct an empathic research on it. You will be positively surprised by the findings; we call them “insights”.
Take a bolder approach to understanding your whole “customer ecosystem”. Think broadly, do not limit yourself to “pure customers”, and include prescribers, entrepreneurs and other ecosystem members that could provide inspiration and a different approach to your challenges. Try to involve most of your stakeholders. Open your organization and “send them talking to relevant sources of inspiration”.
To start building a relevant Customer Centric program involving your organization you can try to answer some questions such as:
- How can we get closer to our consumer, customer and ecosystem to better capture their insights?
- Which activities and tools would you use to get connected to consumer, customer and ecosystem and get relevant insights?
- When is the best moment to get these insights? How often would you carry out this activity?
- Who should be involved/participate in this program? Who should lead?
- The program works better if it has clear research/findings objectives. What are the first topics you should address with this program? (see point 3)
2. Integrate customer needs in your system: how to use findings in your day-to-day to deliver results and sales?
Once you understood how to capture insights and other inspiring information, make sure you integrate all this valuable knowledge into your business management and budgeting processes.
Blending Customer Centricity findings with your regular business activities and processes is key. If you do not do this nothing will happen. Nice insights and ideas will remain on paper (or somewhere) and fall into “no man’s land”; there will be no real impact on your business. You need to actively inject them in your business. Create momentum and make sure you are specific and structured when organising the “customer centric program.”
Some questions guiding your thinking in this stage could be:
- How do we manage generated information?
- How do we use the information to take better decisions?
- How can we integrate insights into our processes?
- How can we connect insights with sales?
Integrating your Customer Centric initiatives into your “already existing” processes is a must for success.
Understand how to enrich your current business processes with fresh insights. Do not try to change your processes too much. And do not spend huge resources to build capabilities. Not yet. Just make sure you use customer information and insights at the right moment in your strategy and budget planning process.
One possible way to start is by making sure your team arrives with fresh insights before defining a brand or category plan. Provide space and time for them to “immerse” themselves in the life of their customers some weeks/months before they present their plans. Do not allow them to present a plan without talking to, “shadowing” and understanding their customers. Make sure they feel them, think about them and also “live being them”.
Several companies already use programs like this. P&G has been a well-known example for a long time. At Sara Lee for example, they had a program claiming, “Get Connected with them, about them and being them”.
The key point is you integrate your Customer Centric activities into your company’s regular business flow and make sure your teams works on strategic challenges.
When integrating Customer Centric initiatives into your processes you can choose among different approaches:
- Some companies have regular programs running throughout the year,
- Others create a momentum in which all relevant company members conduct specific actions,
- Other companies create a contest or specific Cell-teams working on challenges for some months,
- Nowadays, hackathons are also a popular format, especially when mixing internal and external partners,
- Agile is an approach that is every day more useful and popular, specially to solve concrete challenges,
- And do not forget about Cocreation.
To put in place an effective Customer Centric program connected with your systems, you could try to answer following questions:
- How can we structure obtaining insights?
- For which topics/business areas would you use this process?
- How can different teams use insights in a meaningful and useful way to generate business?
- When is the best moment to work with insights? How often would you carry out this activity?
- Who should be involved/participate on this program? Who should lead?
- How should we adapt the existing internal budget process?
- Which process can ensure that program insights are used properly to help generate sales and business?
3. Transform your customer findings into new initiatives: identify concrete challenges you want to solve using this new Customer Centric approach
Once the “system is in place” use these insights to build new solutions with your team. Make sure your solutions address customer problems and are relevant for them. You will probably discover you need to segment your customers according to their relevant needs.
At this stage you need focus. You have probably identified several relevant needs and clustered them into some segments. You might have a map of possible initiatives and your team is excited about their findings and want to develop them further. Depending on your strategy, resources and priorities you need to select the most relevant ones to work on them. Focus is key, empower your team to select the best challenges to work on.
A Customer Centric program always delivers better results when facing a concrete business challenge. It is not just about customer exploration. This may be obvious, but it is too often forgotten.
Once you have identified, described and understood your key customer profiles and identified their insights make sure you translate them into concrete initiatives. They could be related marketing, sales, logistics or innovation. The idea is to involve your customer voice to improve your offering or define new solutions to better serve them or to set up new models to interact with your potential customers.
The initiatives you selected could become, for example, the base of your innovation program. With a solid customer centric approach your team will have a strong base to build new solutions that could become part of your offering. It is important you make a clear link between the customer centric program (allowing your organization to be more customer centric and identify relevant insight for your business) and the innovation project you want to put in place. Normally, if you work on stage 2 properly (Integrate customer needs into your system) this happens in a natural way. However, innovation is always hard, and you need to have in place the right model to convert insights into products and services, and consequently, sales and revenues. But this is another subject all its own, which is the right innovation model for my organisation?
With the approach we described you can help your organisation build a platform for a real customer centric approach. This is a practical approach to involve customers as a starting point for your new business initiatives (not only marketing or innovation). It is an effective way to make sure your plans are based on customer needs and that your organisation works to better satisfy your customers. In this way you make sure the inspiration for new initiatives comes from real customer insights and needs.
If you do it properly with this approach you will help your organization to be more customer centric in a very cost-effective way. It is not about building new processes, having lots of ideas or being product-centred. It is not only about training or new capabilities. It is about managing how to involve a relevant part of your company to identify and work closer to customers. And this can be done in an easy way.
We hope this will help you understand how to put in practice an effective, low cost and results oriented Customer Centric program in your organization.