An easy way to disrupt your industry – the five orientations of a truly Customer Centric Culture
Creating a culture of customer centricity is at the core of many organisations’ espoused values and focus. Yet for many organisations that espouse customer centricity, this is still a holy grail. As consumers, Adaptive Cultures often identify areas where businesses we buy from could very easily disrupt their industry, by paying greater attention to the real needs of their customers.
Many of the opportunities are linked to evolving the organisation’s culture, and hence its attention and actions, towards understanding and meeting customer needs. Most of these changes would bring greater congruence to the organisation’s stated purpose and increase alignment to the customer promise and brand.
We are sure many of you have had customer experiences that reduce your loyalty. Some common examples might be:
- Lacklustre service department after buying a new car we love
- Sticking rigidly to process and policy when dealing with customer challenges
- Offering discounts to new customers and having to pay more as an existing customer
- Offering a product or service that puts the needs of the provider over the needs of the customer
We have also observed an astounding lack of difference offered by different companies within the same industry. It appears as if many organisations are waiting for someone else to take the risk of innovating and becoming different. When one organisation moves, the others tend to follow suit. They often feel compelled to, in order to maintain their position in the market.
If your organisation would like to become truly customer-centric, you might find the below of interest. We would also love to hear any other orientations you believe are essential to enable true customer centricity.
The Five Orientations of a Truly Customer-Centric Culture:
For an organisation to be truly customer-centric, they need to be primarily externally focussed. This ultimately enables organisations to co-create with a wide group of stakeholders in and beyond their industry. External orientation allows for true innovation in markets, delivering more value to customers and the wider community. Policies and procedures are built to support customers and enable a positive customer experience. All team members are responsible for applying policies around principles that keep the organisation sustainable and successful, rather than blindly following guidelines.
The other important aspect is to identify who the organisation’s customer is. For some organisations, there are different layers of customers. For example, in B2B industries your organisation might be delivering to another business who will then deliver your product to their customers. In this type of organisation, you are delivering to BOTH your customers AND the customers of your customers. A deep understanding of how you can solve the current and future challenges of both customers can allow your organisation to become more aware of how to disrupt and challenge the market.
Not only is retention up to five or six times less expensive than acquisition, loyal customers do wonders for customer-centric organisation’s brands. They act as brand advocates and can create a steady stream of referrals. Loyal customers also tend to be less price sensitive and spend more. Transparency around retention and acquisition strategies ensure that loyal customers are not disadvantaged by their loyalty AND that the brand retains its value and integrity with all customers.
Customer-centric organisations treat everyone as valuable – all the time. Customer-centric cultures have a kindness orientation towards all stakeholders (including their employees and team members). Colleagues are treated with the same respect afforded to customers.
They understand that a customer’s value can change over their lifespan. The renter becomes a homeowner, the student an executive, an occasional flyer a frequent flyer, and a single car purchaser the procurement manager of fleet vehicles. While these examples focus primarily on financial value, treating each human being as valuable is a key differentiator of customer-centric cultures. Increasing transparency of how organisations treat people means that more than ever, every person’s experience with your brand has an impact on your company’s ability to achieve its aspirations.
Kindness also means working closely with customers to understand the customer experience right through their lifecycle. From marketing, to sales, to purchase, to administration to servicing the existing product or relationship. At each stage, the organisation develops a deep appreciation of where the customer derives value from the relationship. Each of these steps is seen as a critical partnership that can build or destroy the company’s social capital (the inherent value of its relationships, both internal and external).
Customer-centric cultures are future-oriented. Strategies and ways of working align with creating value for customers emerging needs, beyond what others are currently delivering. Customers are viewed as long-term partners and customer-centric organisations co-create with a range of stakeholders (even competitors) to solve complex challenges in and beyond their industry.
Along with a kindness orientation and future orientation, customer-centric organisations are deeply ecological in their approach. They consider their customers’ several generations ahead, and how their product or service can genuinely contribute to enhancing the health and well being (financial, psychological, emotional) of the customer. They also demonstrate a commitment to contributing positively to the world around them and creating a better future in the way they do business.
The impact of cultural evolution on customer centricity
The Stages of Cultural Evolution framework suggest a significant relationship between the customer experience, and the organisation’s stage of cultural evolution (find out more about the framework here).
An authentic customer-centric experience emerges at collaborative growth, with a noble purpose guiding the decisions and actions of the organisation. At this stage, a true relationship develops with customers beyond the transactional and the organisation can learn and adapt to meet needs that have not yet been identified.
Processes and policies are adapted to be able to make doing business a kind and uplifting experience.
The experience of compliant dependent culture to a customer
When a customer makes a complaint or asks for support, the last thing they wish to hear is “it is our policy”. Customers, in general, couldn’t care less about an organisation’s policy.
When an organisational policy protects the customer, supports legal compliance or company ethics, the policy is a sound one. The challenge is that many of the policies that team members so rigorously adhere to (and use to justify their lack of ability to meet customer needs) are not policies that are there to protect the organisation from insolvency, regulatory impacts or will in any way “break the company”.
Organisations at a compliant dependent stage tend to apply black and white rules and approval processes which often ignore the responsibility of the organisation in the customer’s dilemma. They rarely educate team members on principles regarding customer interaction or consider what level of care would or would not damage the company.
As well as limiting the potential of team members to exercise personal agency and develop higher levels of accountability, these policies tend to erode customer trust and loyalty and treat customers as a “number” rather than as a human being.
Ways in which deeper customer centricity can start to emerge in healthy achievement cultures include:
- Attachment to rules and procedures at the expense of the customer gives way to a principle-based approach. Responsibility is no longer the domain of process and hierarchy but of everyone in the organisation. Each person is expected to apply principles in a way that supports the long-term sustainability of the organisation
- When a team member applies a principle, which is not in line with the organisational purpose or long-term sustainability, this can be treated as a learning opportunity. If it is not going to “break” the organisation, learning can be safe
- Examples where principles are applied responsibly are shared to educate others about what great application of principles looks like
- Dialogue can be practised regularly to explore when and how principles can be applied
If you are a leader in an organisation:
- Consider how you might move from a policy to a principle-based approach
- Consider how to create learning in the organisation to enable people to do this in a way that respects the organisation’s purpose, long-term sustainability and customer promise
- Encourage and liberate the power of the intelligence, heart and personal responsibility of everyone in the organisation
- Challenge any policy or pricing process that rewards newly acquired customers above loyal long-term customers. Frederick Reichheld of Bain and Company did research that shows increasing customer retention rates by 5% increases profits by 25% to 95%
Through our personal experiences and the many experiences our clients share with us, we have seen the consequences of compliant-dependent cultures on the customer. We imagine that as readers, you will have your own experiences and potentially a need to evolve the customer experience in your organisation. If you are interested in exploring these themes further or discussing the application of the Stages of Cultural Evolution Framework to your customer experience, please contact us.
If any of this article resonates with you and you can observe some of these challenges in your organisation, then you may be interested in the Adaptive Cultures community. The community of practitioners are actively exploring many of these themes within their sphere of organisations, and actively developing ways and means to respond and adapt.
Our next practitioner accreditation starts in October 2018. Find our more here.