So you want to be customer centric?

1. FUTURELAB A Futurelab Action Guide So You Want to Be Customer Centric? Alain Thys, December 2010

2. FUTURELAB Prelude About this presentation “Customer centricity is a journey. This presentation offers you some guidelines for the first few steps.”

3. About this presentation There are many great books, articles and presentations about customer-centricity Most herald the same brilliant companies as examples. FUTURELAB

4. About this presentation But while best practice and academic models can be inspiring, life often doesn’t reflect the reality they portray. What do you do if you live in the real world ? In most large organisations: • CEO’s don’t wear turtlenecks or fly balloons. • Silos, habits and politics get in the way • Thousands and thousands of people need convincing In the real world 11-28% of customer questions NEVER get answered Source: Insites Consulting survey of 500 senior marketers in Belgium, Netherlands, France, Germany and Great Britain FUTURELAB

5. About this presentation Five steps to make your business (more) customer-centric #1 Understand it’s a mindshift game #2 Show them the money #3 Make the customer voice actionable #4 Pick your battles carefully #5 Build a movement Futurelab associates have been involved in over a dozen customer-centricity programmes involving tens of thousands of employees across each continent. This action guide brings together the pragmatic lessons learned. FUTURELAB

6. FUTURELAB Step #1 Understand it’s a mindshift game “By doing more of the same, you won’t get a different result. You need a new perspective.”

7. Understand it’s a mindshift game While useful, too much customer thinking starts with the tactics What is the best metric to use? Which CRM software best meets our need? How do we improve first call resolution time? Which customer methodology is most suitable? What social media tools should we use? Which questions should we ask our customers? How can we benchmark ourselves? ... • • • • • • • • FUTURELAB

8. Understand it’s a mindshift game But by doing so, they avoid the elephant in the room Reality Check When the chips are down, most companies choose shareholder value over customer value any time. Sorry my friend, but customer happiness doesn’t buy you much on Wall Street. FUTURELAB

9. Understand it’s a mindshift game Much of the well intended customer rhetoric misses the point The business hears: • This may cost money • This will upset the status quo • I’m already busy enough • Yes, this will cost money The customer evangelists say: • We owe it to our customers • Customers pay our salary • We will lose our competitive edge • It’s important FUTURELAB

10. Understand it’s a mindshift game STEP 1: Change the way customer-centricity is perceived DO: TAKE THE FINANCIAL PERSPECTIVE DON’T: BE A CUSTOMER CARE BEAR If your company only really cares about the money, talk about the profits that can be made from being customer-centric. Even if this is your driver, don’t talk about customer-centricity in terms of morality or long term gains. FUTURELAB

11. FUTURELAB Step #2 Show them the money “Saying that happy customers are more profitable isn’t good enough. You must prove it.”

12. Show them the money Traditional satisfaction metrics aren’t boardroom proof In spite of standing ovations, churn rates among concert goers of 55% are not uncommon (OW, 2008) • Upto 80% of customers that left a given ISP declared they were satisfied in the 12 months before they left (Mercer, 2004) • 60-80% of “lost” US banking customer described themselves as satisfied in surveys just prior to departing (Brandchannel, 2010) • There is no relevant correlation between satisfaction and market share (AT&T/Gale Consulting, 1997) • Customer satisfaction is no guarantee for loyalty, repurchase or other forms of “new profit”. FUTURELAB

13. Show them the money Newsflash: People pay to be satisfied Where satisfaction works Satisfaction measures are very useful to check whether people received what they expected. Where satisfaction breaks down There is no hard business case for satisfaction alone. When was the last time you voluntarily bought something with the explicit expectation not to be satisfied? FUTURELAB

14. Show them the money You need a metric that correlates with economic behaviour Extremely unlikely Extremely likely 0 1 2 3 4 5 6 7 8 9 10 DETRACTORS PASSIVES PROMOTERS NPS™= (Promoters-Detractors)/Total FUTURELAB Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.

15. Show them the money And express this in terms your business can appreciate The more likely customers are to recommend, the more profitable they become Promoters: • buy more & more often • are more loyal • negotiate less • are easier to service • bring their friends • ... = are more profitable 0 1 2 3 4 5 6 7 8 9 10 Your Business Case Investment: the cost of making customers more likely to recommend ROI for decision making Return: the gains from the altered economic behaviour FUTURELAB

16. Show them the money STEP 2: Make a business case for customer-centricity DO: ESTIMATE THE ROI DON’T: GET LOST IN SATISFACTION LAND Customer satisfaction is a useful measure, yet does not meaningfully contribute to the financial impact of customer centricity Look at actual economic behaviours from different customer types to build a business case with a measurable ROI. FUTURELAB

17. FUTURELAB Step #3 Make the customer voice actionable “All this customer information is interesting, but what does it mean to ME?”

18. Make the customer voice actionable Customer voice data & market research are often distant While containing extremely valuable data, traditional customer survey and voice-of-customer programmes are often too complex or abstract to inspire executive action. Even those that wish to act often need to wonder what all this interesting data actually means to them. FUTURELAB

19. Make the customer voice actionable Bring the customer’s voice into the business, literally. Do Play a video of 27 customers saying how your business “sucks” (and why). Don’t Show a graph saying that 9% of your customers are highly dissatisfied. Provide abstract graphs on aspects customers like or dislike about your service. Bring a dozen customers into the business and have an executive conversation. How often do members of your executive team actually meet and talk to real customers? Summarize verbatims into generalised statements. Have your teams go through every individual verbatim. NPS Tip If you ask people about their likelihood to recommend, simply asking them one or two more questions on their reasons and the opportunities they see for you to improve, can give you a wealth of information. FUTURELAB

20. Make the customer voice actionable Create a cross-functional platform for action Fact Customer’s don’t care about the way you are organised. Acting on their voice may break through every silo you have built and challenge every orthodoxy or KPI your business believes in. Set up cross functional meetings and action mechanisms at every level of the organisation, to directly listen to the customer’s voice and establish multi-department action plans. Establish an alert system that ensures you keep going until every touchpoint gets it right. FUTURELAB

21. Make the customer voice actionable STEP 3: Bring your customer into your business DO: REALLY LISTEN AND ACT DON’T: RELY ON ABSTRACT OBSERVATIONS Executive teams have become too distant from their customers. This is only worsened by abstract research and VOC programmes. Bring the customer’s voice really into the business and listen to it across silos. Then act on what you hear. FUTURELAB

22. FUTURELAB Step #4 Pick your battles carefully “The goal is to make change happen, not to become a customer martyr”

23. Pick your battles carefully This is not a walk in the park Some of the hurdles you will encounter: Disbelief in de customer value numbers • Extensive debate about the validity of your data • Silo-based myopia • Structural/political opposition • Data being interpreted wrongly • Project hijacking • Many companies have attempted – and failed – at integrated customer programmes. • “It’ll pass” behaviour Outright cynicism • The ride can be rough. FUTURELAB

24. Pick your battles carefully Start with a pilot project No two customer centricity projects are ever the same. This means you are bound to make mistakes. Don’t start running before you can walk. Gain (private) executive sponsorship Test your assumptions in a pilot Refine & test again Announce to the world FUTURELAB

25. Pick your battles carefully Balance quick wins with structural improvements Understanding the future buying behaviour of your customers allows you to devise sales strategies which generate short and long term wins. € Impact Even if you get people to commit to a long-term customer strategy, there will be a point where some get impatient and want to see results. Structural improvements Quick wins Make sure they get them by securing a few quick wins. Time FUTURELAB

26. Pick your battles carefully Be patient and pragmatic You will not be able to make your company customer-centric overnight. In fact, the process may take years. So don’t be too quick to judge the organisation against absolute standards, yet consider the progress that is being made. FUTURELAB

27. Make the customer voice actionable STEP 4: Move with utmost deliberation DO: ACT WITH RESTRAINT DON’T: BLINDLY CHARGE AHEAD Your business will not benefit if you become a customer martyr. Don’t announce big programmes or changes before you’re ready. Build your customer case in a way it becomes impossible to ignore or discredit. Manage expectations along the way. FUTURELAB

28. FUTURELAB Step #5 Start a movement “Customer-centricity cannot be conscripted. You need to light the fire, and get out of the way” 2/01/2011 28

29. Start a movement Customer centricity: it’s all about the people DO YOUR PEOPLE WANT TO BE CUSTOMER CENTRIC? Willing: Do they want to behave in a customer-centric manner Skilled: Do they have the knowledge and practice to do what is right Able: Can they do the right thing, or does the business get in their way You will face three types of people in your business: Those that hinder Eliminate or ignore Those that act Your primary focus Those that wait Gently encourage FUTURELAB

30. Start a movement How to start a customer movement http://www.youtube.com/watch?v=fW8amMCVAJQ&feature=related FUTURELAB

31. Start a movement In practical terms: success will generate success 1. 2. 3. 4. 5. 6. Identify those who already behave in the right way Get their support for your bigger objective. Find champions at all levels in the business Help them be successful as well Highlight these successes to the organisation Attract more supporters FUTURELAB

32. Make the customer voice actionable STEP 5: Start dancing DO: BE A REAL LEADER DON’T: FIGHT FUTILE BATTLES Not even the CEO can change an organisation alone. Don’t waste your energy and resources on trying to move things that are too strong. Set the example that you encourage others to follow. Help them in their efforts and use their success to build a movement. FUTURELAB

33. To Conclude Five steps to make your business (more) customer-centric #1 Understand it’s a mindshift game #2 Show them the money #3 Make the customer voice actionable #4 Pick your battles carefully #5 Build a movement And if all the above is too ambitious, just step out of your office and meet a customer. FUTURELAB

34. A moment of self-promotion A world-class team that believed in customer-centricity before the word existed. Hi there, Alain Thys: Email: Twitter: ath@futurelab.net @FLB_alainthys If you have made it this far in the presentation, customer-centricity is probably on your mind. So perhaps we should talk. Futurelab’s 30+ associates have been involved in over a dozen customer-centricity programmes involving tens of thousands of employees across each continent. Stefan Kolle: Email: Twitter: sko@futurelab.net @FLB_stefankolle This makes them perfectly placed to assist you in your customer- centricity efforts. Not with complex methodologies and theoretical advice, yet with pragmatic recommendations rooted in experience. So if you feel you’d like to have an informal chat about the ways we can make your business more successful, please do get in touch. FUTURELAB