I was reading Bruce Temkin’s report, The 6 laws of customer experience, which has a number of similarities with an article I wrote for 1 to 1 Magazine published in January, so I decided to post the full article here:
The 10 Rules of Customer Centricity
Build long-term relationships and business success by acting in the customer’s best interest.
Many companies claim customer centricity in their list of company values, in their organizational tenets, or in their mission statement. Being customer centric is not easy. Use these 10 rules to assess your organization’s customer centricity:
1. Co-create with customers. Involve customers in the design, test, and ongoing improvement of your products with tools like advisory boards, customer design meetings, and beta programs. Don’t focus on features and specs; instead focus on how you are helping customers get a specific job done. At Threadless, for example, customers design, vote on, and order shirts before they are produced. Starbucks captures customer ideas and feedback via StarbucksIdeas.com.
2. Incent your sales team to be customer centric. Most sales teams get bonuses based on quarterly or monthly sales and profitability, yet satisfaction and loyalty are the leading indicators for future profitability and long-term success. At leading companies, customer satisfaction is measured twice a year and the results directly impact executive compensation.
3. Empower front-line employees. Ritz-Carlton hotel employees at all levels are empowered to spend up to $2,000 per guest to do whatever needs to be done to make customers happy.
4. Happy employees = happy customers. Simple, but true. A company that values employees is a company where people enjoy working and, therefore, they do a good job.
5. Your customers are not assets, they are your reason to be. Peter Drucker said the purpose of the organization is to create a customer. The relationship you build with customers is, therefore, the foundation for success. Are you trying to extract as much money from customers or are you building relationships? Are you charging “convenience fees” that generate what Fred Reicheld calls bad profits like car rental companies that charge outrageous prices for gas? Kimpton Hotels’ loyalty program members are delightfully surprised by getting $10 worth of mini-bar items for free.
6. Contact Us. Really. Go to your website and measure how long it takes you to find your organization’s contact information: a real email and phone number. Pretend to be a customer to learn your response times via email and your toll-free number. At customer-centric companies people answer the phone within seconds, executives answer customer calls directly, and they publish names, phone numbers, and email addresses on their site.
7. Listen to customers proactively. You can do this the old-fashion way via customer service reports that feed product development, customer surveys, and other tools. Today companies are also required to listen – and respond – to the social web: Twitter, blogs, Facebook, etc. Beyond listening, you must empower people to respond and to fix problems. Do you have the processes to capture, organize, prioritize, and act on what you are hearing?
8. Focus on the customer experience. Get in your customer’s shoes. Pretend to be a customer to understand their end-to-end experience and what goes on in their mind at each step. Executives at a courier company went through the experience of actually shipping a product and tracking it to delivery. Software product managers go to customer’s homes to witness their experience from installing to using to troubleshooting the product.
9. Customer orientation. This means putting the customers’ needs first. The customer is not always right, but you really need to focus on making them happy. I owned a computer store in the 1980s. A customer walked in ready to buy a new computer because the old one was very slow. I suggested buying more memory, which solved the problem. The customer was blown away that I offered an inexpensive product when he was ready to buy a new computer. Not only was he my customer for life, buying multiple computers and accessories, he also referred lots of business to me and we became great friends.
10. Make money from your customers. Making money from customers is OK. They will gladly give their money to a company they value. Ritz Carlton estimates customer lifetime value at over $1 million – what is yours? An unhappy customer will probably tell a dozen people about their bad experience. Acquiring a new customer usually costs $300 or more. It is a better business proposition to keep your customers happy and make money from them over time by building a long-term relationship, not a transactional one that ends at the cash register.
Truly embracing customer centricity requires transforming the organization. The book The Discipline of Market Leaders suggests that organizations align behind one of three core disciplines: operational excellence (think McDonald’s), product leadership (think Apple) or customer intimacy (think Nordstrom). The “chosen” discipline defines the company strategy and culture and therefore the chances for success. Embracing customer centricity presents an incredible opportunity for differentiation, becoming a source for competitive advantage.