Latest posts by Yaniv Vardi (see all)
- Why every startup should have a baby boomer on the team - November 24, 2014
- How to Create a Customer Centric Culture - July 9, 2014
• Customer centric companies are more successful than those focused on products or profits.
• Creating a customer centric culture requires the commitment of everyone involved: from management and through all departments.
• Creating a customer centric culture must be coupled with cultivating that culture.
Wouldn’t it be great if your startup could become the next Trader Joe’s, Zappos, EMC, Citrix or Amazon? It doesn’t matter if you are selling groceries, technology, shoes, or . . . everything and anything. What truly matters is your customers and how well you can place them at the center of your organization.
While most startups see the conceptual benefit of centering their organization around the customer, the practicalities often elude us. As with most strategic initiatives, creating a customer centric culture requires planning, teamwork, and commitment. Customer-centricity is worth the effort though.
Consider these statistics:
• According to an annual Customer Experience Impact (CEI) Report:
86% of buyers will pay more for a better customer experience. But only 1% of customers feel that vendors consistently meet their expectations.
• Walker’s Customers2020 Report (http://www.walkerinfo.com/customers2020/) found that:
By 2020, customer experience will overtake price and product as the key brand differentiator.
• Accenture’s Global Consumer Pulse Survey (http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Global-Consumer-Pulse-Research-Study-2013-Key-Findings.pdf) reports that:
In 2013, 62% of global consumers switched service providers due to poor customer service experiences.
These numbers and the case studies of companies like Starbucks, Nordstrom, Samsung, and others, show us that there is quantifiable success is customer-centric cultures. While your startup is still manageably sized, consider these questions: Do your customers find value in the customer experience you provide? Do you stand out from your competitors in terms of customer satisfaction? Are customers switching away from you to better providers or away from other providers in favor of your service?
To make sure you have the “right” answers, create a customer centric culture in your startup with these steps:
1. Understand your Customer
The first step is to fully understand your customer. To do this, we segment customers based on their lifetime value. We use data about current customers (very new startups can use projections) to understand their behavior, challenges and preferences. We classify personas and rank them based on their lifetime value with our company. The classifications with the highest lifetime value are the ones we focus on when creating new products, services, and marketing messages.
Once you can pinpoint the customer personas you are targeting, you can move to the next step of seeing your world through their eyes.
2. Your World; Your Customers’ Eyes
Assess the eco-system through your valuable customers’ eyes. First, explore the choices they face. View how they are exposed to your direct competitors, but do not stop there.
Starbucks can research competing coffee chains like Peet’s or Coffee Bean, but they should also explore their customer’s options of making coffee at home. They could also investigate messaging that is reaching their customers about the health benefits of cutting out coffee altogether. It is important to view all the choices a customer makes before becoming your customer.
Once you have a comprehensive understanding, proceed to understand their needs from your specific product offering. Use customer feedback to drive your roadmap. Being customer-centric does not mean losing focus on your product: it means realizing your vision through your customers’ eyes.
Once the products are created in line with the customers’ needs, view your company’s complete customer experience through their point of view. If your company has an online ordering system, try it yourself on different computers with different browsers. Inspect the data you gather about where in the process customers abandon their carts. Research email open rates. Survey real customers to understand what kind of service they want and through which medium they prefer to receive it.
Viewing the internal workings of your company helps you focus on profits, on products, on employees. When you view your startup from the outside in, you will discover that most customers prefer that you serve them, not sell to them.
3. Get the Entire Team on Board
As a startup, your team may be small (it may even be only you!), but every member of it (or every hat you wear) must share a commitment to customer centricity.
We recommend that you start from the top. Executives must be committed to creating a customer-centric model. A great way to do this is to involve executives in the early stages. If you want to be like Zappos, have the execs step into the customer’s proverbial shoes to view the eco-system.
Once the executive suite in enrolled in the possibility of creating customer centricity, all other teams must get on board. It seems obvious that customer service, sales, and marketing teams must buy in and alter their strategies to fit the new model; but so must R&D and product teams. Every part of an organization must be committed to the customer.
One way to instill this kind of commitment is by offering acknowledgement, recognition, and rewards. The type and timing, of course, will differ from company to company. What needs to be consistent is the reason. Rewards should be given to those who demonstrate insight and understanding into customers. It may be someone on the sales team who shows creativity in targeting the highest value customer segment; but it may also be someone on the products team, who develops a solution to a need of the desired segment.
4. Cultivate the Culture
Creating the customer centric culture may be challenging, but, especially at the startup stage, it is certainly doable. Profiling valuable customers, seeing the world through their eyes, and getting all of your teams on board to serve those eyes pays off. Customers become loyalists. Loyalists become advocates.
Advocates do the work for you. But is does not end there. To fight complacency, you must always innovate and keep your customer-centric commitment at the top of the minds of all those involved.
To do this, lead by example. When the team feels your commitment to the customer, they will align their thoughts and behavior. Share stories of success with the entire team: stories of your own satisfied customers and stories from other brands and industries. Celebrate the successes together, learn from failures together, and take steps to continually renewing your commitment to your valuable customers.
You are in good company if 2014 is the year that you shift your startup to one where the customer is at its center. The 2014 Call Center Executive Priorities Report (http://www.callcenter-iq.com/cc-performance-metrics/white-papers/call-center-iq-presents-2014-call-center-executive/) found that the customer experience will reign as the primary investment target in 2014 as 68% of businesses plan to increase their customer management spend.
Forrester Research tells us that 90% of customer experience decision makers say that a good experience is critical to their success; 63% think the importance of the customer experience has risen.
A customer centric culture is important to your business. According to the Customer Experience Index 200(CEI200), customer-centric companies have a higher valuation on average than their competitors.
For your startup to succeed, you must look from the outside in; your must take the profit-centered model and turn it inside-out. All the research shows it; all the successful companies prove it. A customer-centric model is a successful model.
The above tips will help you create a customer centric culture in your startup. And creating a customer centric culture, will, in turn, foster Amazon-style success for your company.