Q&A: Driving a Top-Down Plan for Customer-Centricity
Many organizations have tackled customer-centricity with varying degrees of success. To effectively establish an enterprise-wide customer-centric mindset, change management is the key: focusing not on the content of the change, but the change itself.
As a principal at Lenati, Clay Walton-House helps global brands understand what is required to become a customer-centric organization. He leads the Customer Retention and Loyalty Practice at Lenati, a marketing strategy firm committed to helping the world’s leading brands build customer loyalty and generate business growth. Walton-House is a sought-after speaker and industry thought leader with a track record of successful loyalty strategy work with global brands like Starbucks, Hilton, Nordstrom, Nike, Expedia and more.
We asked him to share his perspective on implementing customer-centricity and the importance of executive commitment to the process.
COLLOQUY: What does it mean for a company to adopt a customer-centric approach?
Clay Walton-House: Customer-centricity means more than simply offering good service. It puts customers at the core of the business, providing a great experience from the awareness stage through the purchasing process to the post-purchase relationship, ultimately resulting in the growth of the existing customer base through repeat business, increased profitability from new- customer acquisition and deeper relationships with customers who increase their investment in the organization.
COLLOQUY: What is the first step?
CWH: The customer-centric approach begins with an acknowledgement that change is necessary. Many organizations maintain the “build a better mousetrap” paradigm, which focuses on the product and the processes involved in development, production and distribution. Conversely, customer-centricity turns full attention to customers, responding to and anticipating their needs and wants. Keeping customer considerations front and center may require a significant change in thinking, and that’s the place to start.
COLLOQUY: Any kind of organizational change requires leadership. What is your perspective on that?
CWH: Research and experience show that change management initiatives work best when driven from the C-suite. The top-down approach offers specific benefits:
- Streamlined approvals. At the management level, approvals must typically be obtained both vertically from supervisors and horizontally from peers in other departments. The C-suite can bypass potential obstacles in navigating the organizational chart.
- Clarity of message, since the directive comes from a single authoritative source.
- A sense of priority and urgency, because when organizational leadership points the way, employees are motivated to follow.
- Faster acceptance by employees, as they follow the strategic direction from the C-suite.
COLLOQUY: Once an organization has changed its mindset and gotten commitment from the C-suite, what’s next?
CWH: Three key action steps will help ensure successful change: defining, measuring and implementing.
First, every member of the organization needs to understand the goals and expectations. An explicit, clear-cut definition of customer-centricity ensures enterprise-wide consistency and enhances employee buy-in.
From senior leadership, this requires an explanation of what customer-centricity means in practice and how the principles apply specifically to the organization. In their day-to-day behaviors, employees need to know the organization will interact differently, invest differently and measure success differently.
As part of the process, the C-suite needs to make the case for change. Customer-centricity can tie directly to profitability – and employees need to be aware of that connection. It’s crucial to engage all departments, especially those with limited or no customer contact. Customer-centricity requires commitment and support from every corner of the organization, and this puts everyone on the same wavelength.
COLLOQUY: The next step involves measurement. What are the key components?
CWH: The ability to quantify results and measure key performance indicators must be built into a successful initiative. The plan should incorporate analytics and customer-level data to obtain a true reflection of the situation and accurately monitor ongoing developments.
Measurement criteria should move away from product-driven measures like units produced, units shipped or sales volume. Metrics like customer lifetime value and share of wallet reflect changes in thinking and represent the ideals the organization is striving to achieve.
Setting up this type of measurement reveals where opportunities exist at the customer level – not the product level – which is the essence of customer-centricity. Based on the results, organizations can identify the levers that can activate customer value.
COLLOQUY: What happens during the implementation step?
CWH: Management and individual departments can focus on specific tactics that pertain to their employees and areas of responsibility.
Ideally, the C-suite has already clearly defined and illustrated what customer-centricity looks like; now employees will receive the appropriate tools to accomplish it.
Throughout the process, employees need reinforcement – not just slogans, but reminders of why it’s important and their role in its success: “Here’s how you influence customer value, and here’s how you can increase it.” Tying customer-centricity to the bottom line – regardless of department, makes the message both meaningful and impactful.
COLLOQUY: A successful initiative needs resources. What do you recommend?
CWH: Part of the process is assessing whether the organization has the capabilities to execute the initiative. For example, “design” is a critical skill set – not necessarily graphic design, but people who can create effective customer experiences ranging from web interface to in-store interaction.
Technology is a crucial piece, and success depends on integrating it with execution elements. IT is no longer a back-end-only function; it must be fully integrated within the organization, agile and responsive to the work that needs to be done.
Customer data management remains the key piece to the customer-centric puzzle. The existing knowledge of customers and prospects will drive all future decisions.
COLLOQUY: For organizations, what’s the bottom line?
CWH: Customer-centricity represents a tremendous undertaking for any organization, requiring a significant investment of time and resources. However, it can truly transform them into efficient, flexible, responsive and long-term partners with their customers.