What is Customer-Centric Culture, and How to Get it Right

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For better or worse, we are all customers. From the moment we wake up — on our mattress, pillow, and bedspread, that we at one point purchased — we are making purchasing decisions (and living with those we made previously). Maybe we even have a few purchasing stories we are likely to share with friends or family – perhaps even a few paint a company in a less-than-positive light!

Due to all these experiences, even the most objective of us develop opinions, sometimes imperceptibly so. On my way to work this morning, why did I go three minutes out of my way to choose one coffee shop over another? Is it the often-cheery greeting from the barista at the spot further away? Did the skipped shop burn their coffee once three years ago? Did I just want to delay getting to work by an extra three minutes? Each of us makes these types of decisions continually throughout the day — but why?

A large part of the “why” has to do with a concept called customer-centricity. What is customer-centric culture, really? According to Indeed, customer-centricity is “a method many businesses follow that emphasizes the importance of putting the customer first and creating a positive experience for them at all times.”

As technology rapidly advances, an astute observer should notice that companies are at least aware of (sometimes uncomfortably) and are pursuing this concept. This is backed up by the stats: according to McKinsey&Company, companies see customer experience as one of their top priorities. A lot of effort is being put into the elusive concept of customer-centricity.

What’s also clear is that companies are putting in this effort with varying degrees of success. Companies can exhaust themselves trying to be customer-centric, but it’s the customer who makes the ultimate call.

What is Customer-Centric Culture?

Forbes captures an additional nuance to customer-centricity that the above definition misses:

“Being customer-centric means anticipating a customer’s wants, needs, and communication preferences. And then, getting it right. [emphasis added]

“Getting it right” is the missing piece, as it conveys a sense of purposeful and effective action. To truly get it right, customer-centricity cannot start from bottom-line thinking, nor can it be a superficial concept — it needs to come from a deep well of empathy for, and understanding of, the customer.

But how many are truly getting it right? According to modeling by the California Management Review (CMR), only 9% of companies operate in a truly customer-centric manner, which they define by criteria represented in Level 4 of the below graphic.customer-centric-culture-1

Source: www.berkeley.edu

There is also a disconnect between the effort put forth by companies on how to become more customer-centric and their perceived results. The same article from CMR cited a Salesforce study indicating that 56% of companies with 2,500+ employees have adopted a “customer journey strategy,” but only 29% rate their strategies as “very effective” or “effective.”

For their part, customers believe that companies are capable of improving the customer experience; this whitepaper from PWC states that “54% of U.S. consumers say customer experience at most companies needs improvement.”

Customers and companies alike are frustrated; why on Earth is such a simple concept like customer-centric marketing so difficult?

Challenges of Customer-Centric Marketing: Why Can’t Companies Get It Right?

When companies embark on their journey toward customer-centric marketing, the first thing they should realize is that the customer purchasing journey itself is not straight-forward: customers are influenced at every point along the way by a multitude of factors. This complexity sometimes leaves the company in the dark about how customers are finding them. I’ve been asked by a company more than once, with a note of shock, “How did you find us?”  

Not fully understanding the buyer journey is one reason why companies are struggling with their customer-centric marketing, but there are a host of other potential pitfalls that we’ll explore in this article. Remember, this “simple” concept is not easy for companies to successfully implement.

What is the Impact of Customer-Centricity?

When woven into every fiber of your company, customer-centricity benefits are vast. According to this Amazon article, Adobe found that “companies that prioritized and effectively managed the customer experience were three times more likely than their peers to have significantly exceeded their top business goals in 2019.” The article goes on to mention a Salesforce study that discovered that 73% of customers say one amazing experience with a company raises their expectations of other companies. The truth of the matter is this — you will get left behind if you don’t take customer-centric marketing seriously.

A customer-centric vision leads to more customer loyalty, lower churn rate, and higher customer lifetime value (CLV) — a calculation that measures the amount of revenue a customer contributes over the long term to your business. Companies that take the long view are more motivated to please their customers; not to mention the well-known fact that acquiring new customers takes substantially more time, money, and effort.

Study after study has shown the benefits of customer-centric marketing, but when thinking about our daily experiences of being a customer it’s quite an intuitive concept — do we really need studies to tell us this?

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How to Become More Customer-Centric: Key Tips

With eight years of consulting experience, fifteen years in the tech industry, and many more than that as a customer, I’ve had a lot of experience in the realm of customer-centricity.

It all started for me when I was eleven years old. I was hooked on McDonald’s, and this obsession was cemented when they introduced a game called “McDonald’s Monopoly.” For those of you who were making healthier choices at the time, customers were given a Monopoly tile with certain purchases and were supposed to cash in when they collected each of the tiles in a Monopoly section (for example, if the Illinois, Indiana, and Kentucky tiles were collected, a customer would get $10,000 USD).

McDonald’s displayed the chances of receiving each tile, and I quickly received the two most difficult tiles in the previously-mentioned combination, leaving only the easy tile uncollected (a 1 in 50 chance with each purchase). My 10-year-old brain was well-versed enough in statistics to calculate that I needed to order, at most, 50 more Happy Meals to get the enormous sum of $10,000. And I had BIG plans for that money.

Well, after purchasing 100 Happy Meals, the tile I needed never materialized. I think at the time I really keyed into the unfairness of it all. It gave me that little extra reason to skip McDonald’s and go somewhere else instead. Although I couldn’t have verbalized this at the time, there was a feeling of being hoodwinked by a large corporation which is never fun. But maybe this made me learn in some ways.  (In 2020, HBO released McMillions; this Monopoly game turned out to be fraudulent to the tune of $24 million USD between 1989 and 2001. I was on to them the whole time!) In fairness, McDonald’s wasn’t the beneficiary of that $24 million, and the swindler behind it all ultimately spent some time behind bars.

While I can’t say that this experience completely changed my purchasing behavior at McDonald’s at the time (remember, I was a kid), it did leave a bad taste in my mouth. And, in retrospect, the feeling of being cheated led to less positive feelings towards the company. Of course, McDonald’s is doing fine, but these days — with so many companies focusing on customer-centricity — no company benefits when customers feel cheated by them!

Obviously, if you want to know how to build a customer-centric culture, don’t commit or allow fraud in, or associated with, your organization. That’s an easy one – eleven-year-old me could even figure that out! But there are a few more subtle things that, if done well, will lead to true customer-centric marketing and all the resulting benefits. Let’s dive in.

Identify Your Experts (Then Become One)

“You work here and you haven’t even tried the most popular meal?”

Sit me down in a restaurant and I turn into one of the most impressionable people on the planet. When traveling in France, choosing a meal is easy — I simply order “le plat du jour” (the meal of the day) and get on with life. Typical U.S. restaurants are not so easy, as there are often upwards of twenty options from which to choose.

The sheer number of choices causes me to throw my hands in the air: I need an expert to help me, so naturally I ask the server what they suggest. Invariably, they skirt around the question by instead telling me what the most popular items are. Typically, I follow up by asking “but do you like it?” and they tell me they’ve never tried it or any other remotely similar meal. “Okay, never mind,” I think, and then I move on and blindly pick an option.

The problem I see is that companies are typically slow to equip their public-facing employees with these inevitable conversations. This is unfortunate, as these public-facing employees literally represent the company to its customers. Even when leaders do empower these employees to represent the company, they don’t view them as the experts on what the customer wants. This is a huge mistake.

Business owners and leaders typically think that they are the experts on how to generate a customer-centric approach. This misguided conviction leads to product ideas that miss the mark; business processes that don’t account for uncommon events; and lots of wasted money, time, and resources. As a leader, it’s a much better plan to look around and identify your experts, then become one (not the other way around!).

I’ve recently been fortunate enough to consult with a Fortune 500 company on a project which brought customer-facing workers into the corporate setting in a product team for a six-month stint. This company has a large customer-facing workforce which is mostly disconnected from the corporate office, and the benefits were astounding on both sides: product teams learned from the real experts, while the workers were able to learn a different side of the business and (oftentimes) move into corporate roles after the program.

The customer-facing folks were able to bring a creative approach to customer issues based on their unique perspectives and experience. Because they could answer questions related to what customers actually care about, this project was able to directly increase product quality and decrease customer pain points.

This program was a win-win-win — for the business, the workers, and the customers. I call that customer-centric vision at its finest.

Next time I meet a server who hasn’t tried the best meals the restaurant has to offer, I’m tempted to tell their manager to train their staff better and, more importantly, ask them what the customers truly want on the menu. The manager would likely discover some surprising and enlightening insights!

Understand Where You Can’t Fail (And Provide Good Options for Things That Can Wait)

“I am relying on your taxi service to get me to the airport at 6 a.m., and your driver slept in?”

After two years of ‘pandemic living’, I was ready to head back to France. The route from point A (home in Washington state) to point B (rental in the south of France) was to take over thirty hours, basically an entire weekend. I felt confident about all aspects of the trip except for the first step, which required a taxi driver to pick me up in a rural community and drive me to the pickup point fifteen minutes away — a step that if I missed somehow, would put the entire trip in jeopardy.

My nervousness only increased when I called the night before to confirm and they said they had lost my reservation. But they assured me that, fortunately for me, they were still available for the pick-up.

6 a.m. arrived, and no taxi. 6:05… 6:07… I began to sweat, even in the cool February morning — were they going to miss the pick-up? Fortunately, I had a Plan B. I put it in action, and voila — I was on my way via an alternate method, skating into the park on two wheels right as the carpool van (the next step in my trans-continental journey) was about to leave. I am not prone to writing scathing reviews, but as you can imagine, this was an exception.

Businesses have a set of core functions that absolutely should not fail. If your business serves ice cream and it is scorching hot, you’d better be able to deliver the goods. The bare minimum expectation for any business is to identify potential scenarios and points of failure and plan to avoid them.  For those who don’t heed this advice on how to be more customer-centric, this headline from Forbes says it all: “Businesses Lose $75 Billion Due to Poor Customer Service.”.

In addition to my view as a consumer, I’ve also had some consulting experiences that were head-scratchers. Several years ago, I was consulting with a client that held a great deal of customer data. One of their employees decided to take me down to the basement with their physical servers, explaining that they didn’t have any virtual back-up. Amidst the heat in the room my mind was racing… what happens in case of an earthquake? A fire? How is this possible in the 21st century?

For things that can wait, it’s important to provide options to the customer. There is nothing more upsetting than waiting for 10 minutes on hold and then being told “No one is here. Please call back later. Goodbye.” There are several choices that could be offered in this scenario, but the business is either unwilling or unable to provide them – or simply hasn’t thought.

Companies that don’t give good choices, or worse yet, fail at their core function, are practically begging their customers to leave.

Know Your Customer (But Not Too Well)

“Do they realize how much money I’ve spent with them over the course of my lifetime?”

Let’s admit it, we consumers are a finicky bunch. We seek to be understood, desired, and even cherished by companies who provide us goods and services. We want, in fact, a personalized experience. But, we also get creeped out when Google surfaces puppy articles after we type “what are good puppy names” into the Google box.

But although consumers can be difficult, there are some basic steps that companies can take to know their customers – and some obvious lines not to cross.

I love the concept of natural food stores, and I seek them out whenever I can to get high quality food. I live in a small town with limited grocery options; when I found that one of them was a natural food store I was ecstatic. So, I started going religiously; every week for about a year I shopped at the same natural grocery store in my small town.

Though I was there so consistently and saw many of the same employees, not one single individual acknowledged me at any point. Not only that, but their parking lot had a significant downhill slant leading to the highway, which was especially an issue because the mountain town gets very icy in the winter. One had to basically fling open the door, muscle the cart out, slide into the side of the car, fling the door open while tossing the groceries in over-one’s-shoulder, then muster up enough energy to get the cart back into the store. “Do you realize how much money I’ve spent at this store?” I would usually angrily think to myself but never quite have the courage to verbalize.

Invariably, I left the store in a bad mood. As a consumer, I want to connect with others throughout my day, and maybe even feel a bit of camaraderie with my fellow humans. And if I’m being honest, I want to be respected as someone who has spent a lot of money at their store. Recently, despite the fact that I prefer their goods, I’ve decided to take my business elsewhere.

Businesses would do well to consider who their customers are and the lifetime value that they bring to the table, and treat them accordingly. But beyond this, businesses need to understand that each customer has their own network with which they connect — and one bad experience can reverberate. Come to think of it, it’s no wonder that there are so few people at that grocery store when I shop.

Business owners and leaders: it’s important that you know what customer-centric culture is and do everything you possibly can to make customer-centric marketing work.

A note of caution, though: in this era of personalization, it’s important to note that companies can go too far down this path. Customers are leery of companies who seem to know a bit too much about their habits, purchases, and life. I covered issues around this concept as it relates to the smart home in my previous blog.

How Does SAFe Describe Customer Centricity?

It’s mind-boggling to think that so many companies struggle with customer-centric marketing, but when you consider the often-siloed and disconnected internal structure of these companies, it starts to make sense. Very little understanding exists of the buyer journey, starting at understanding customer needs and culminating with delivering on those needs. This is where the Scaled Agile Framework (SAFe) can come to the rescue.

In my organization, many employees (including myself) are SAFe Agilist certified. SAFe is a robust methodology combining elements of Agile, Lean, and DevOps, and scaling these concepts for large enterprises. One of the core elements of SAFe is, in fact, customer-centricity. And one of the core recommendations from SAFe on how to be more customer centric is to organize around value.

To organize around value, companies first need to understand what value they are offering the customer and the steps required to get there. This is accomplished by creating operational value streams, as seen in the examples in the image below.customer-centric-culture-2

Source: scaledagile.com

In addition to identifying the steps and value, companies should identify the people who perform these steps, the systems they use to do their work, and the flow of information and materials that are necessary to satisfy the request, as seen in the diagram below.customer-centric-culture-3

Source: scaledagile.com

This method also breaks down silos within the organization, as it shows where collaboration needs to occur. Especially as organizations grow larger, it is critical to get a handle on all these pieces.

Mapping value may seem unnecessary for smaller companies, as it might be seen as a no-brainer. Isn’t it obvious that a taxi service needs to deliver rides to their patrons? Yes, of course — but the exercise of understanding how this value is delivered can help even the smallest business predict pitfalls and create back-up plans to maintain customer-centric marketing.

A company can choose to pursue SAFe or not, but the concept of defining value streams is absolutely critical to understanding the “what,” “how,” and “who” of delivering customer value — which makes customer-centric marketing an achievable goal.

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What is the Impact of Customer Centricity?

Tim Cook’s vision for Apple is this: “Our whole role in life is to give you something you didn’t know you wanted. And then once you get it, you can’t imagine your life without it.”

Building an aspirational vision is a great start, but hopefully by now you can tell that customer-centric marketing requires a lot of planning and hard work. To achieve customer-centricity, companies need to step into the shoes of their customers by identifying and utilizing their experts, avoiding failures and providing good options, and truly knowing their customers.

Companies that do these things successfully will put themselves in an enviable position and cement themselves as customer-centric leaders for many years to come.

Author: Nate Joy