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Are You Really Customer Centric?

Customer centric shouldn't just be a concept you use to describe your company. Make it carry some weight by treating it as a mandate that drives action.
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In a decade of working with companies on customer issues, I have never met an executive who would say their company isn't customer centric. Never! Now how can that be when you and I get over-billed by cell phone companies, misled by the credit card industry and have everyday experiences that remind us that the customer is not king?

Companies are born to serve customers. So what's with the disconnect? Why do so many good companies continue to make decisions that unwittingly erect a wall between customer expectations and reality, between exponential growth and stubborn revenue barriers?

I'll tell you why.

The disconnect exists because companies have been treating customer centricity as an idea, as a concept, instead of as a business principle or mandate that drives action. And because it's just an “idea,” customer centricity remains un-managed, un-budgeted, un-owned and un-measurable, leading to operational challenges and behaviors that ultimately create revenue barriers and limitations to growth.

Case in point. A company we know got the idea that “innovation” was its key differentiator and a critical loyalty factor, so they re-tooled their engineering assets to support “innovation.” Thinking that new products would keep customers and create remarkable experiences, they launched one product revision after another -- and caused a series of migrations that over a two-year period cost customers millions of real dollars and sweat. They later found, after tracking the defection of high profit loyalists and promoters, that innovation wasn't what customers wanted most after all -- it was rapid and predictable value. Needless to say, sales took a serious dip and the company spent several months reorienting away from the customer-centric idea that wasn't.

On the flip side though is a company like Mercado Software. Mercado realized over 300% top-line growth for the past two years -- and projects 350% this year. CEO Corey Leibow directly credited the reverse of a stall and the exponential growth that followed to a focus on cultivating marquee customers and increasing customer delight through the company's advocacy program.

The trifecta and the cascade

Our quest, since we first discovered the connection between expectations and reality and growth and decline, has been to uncover the root causes of how and why customers contribute to the success and failure of companies. The trifecta:

  1. Companies don't invest in the tools and capabilities to continually (operative word) listen to customers, gather meaningful data and insight from and about them, and ultimately integrate that data and insight into the business.
  2. When companies uncover the truth about why customers leave and why they aren't happy, the reaction tends to be emotional, muddled and wrought with politics such as who owns the problem and who is empowered to fix it.
  3. Companies simply aren't equipped with internal processes to leverage all areas of customer information across the business, such as what happens when customers defect or are at risk of defecting, who owns the analysis of customer retention and where do happy customers go to tell their stories.

The cascade? Businesses base essential and far-reaching decisions -- which market to pursue, which accounts to nurture, which product to develop, how to uniquely position -- on ideas, lore and assumptions about customers rather than on fact. And when lore takes over -- well, trouble can't be far behind.

Last updated: Jun 1, 2007




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