How to be customer-centric
Relative to the sheer breadth and depth of conversation around the topic, there’s surprisingly little consensus on what it actually means to be customer-centric. Unfortunately, running the occasional focus group is not enough to claim full-on customer obsession. The following outlines three easy steps toward customer-centricity (and three not-so-easy leadership skills) to help managers walk the talk:
1. Start with the customer, not yourself
Customer-centricity starts with acknowledging a simple truth: You are nothing like your customers. Unless you sell luxury, you are likely in a different income class, have a different educational background, live in a different part of town, drive a different car, own a (different) house, and most likely work a different type of job than your average customer. These differences make it entirely unreasonable to assume your customers see, feel or do things in the same way you do. Or like the same things you like — including your product experience and your advertising.
The most successful leaders show a high degree of humility in their journey toward customer-centricity. Instead of an inside-out philosophy that puts the product first and often anchors in individual presumptions and opinions, they will follow an outside-in operating model, anchoring decisions in a rich blend of customer data, customer research insight, experience and informed gut. For them, putting customers first means to admit they know little or nothing about their customers. And that is their starting point.
2. Know the why behind the what
Customer-centricity goes beyond observing customer behavior to understanding the motivations underlying that behavior. Of course, running a series of epsilon-greedy bandit tests can help explain what customers do (and prefer), and translate to immediate improvements in key business metrics. However, it doesn’t explain why customers do what they do (and prefer what they prefer), and therefore doesn’t yield much value for systematic customer experience improvements. Scalable experimentation is short-term, tactical business optimization, not customer-centricity.
Successful leaders demonstrate curiosity in addition to optimization skills. Successful leaders keep asking “Why?” (not unlike young children), striving to understand customer needs, barriers and motivations at a granular level. They know that customer demographics, -behaviors and -preferences are easily identifiable characteristics — observations, not insights. Insights are tacit, hidden, sometimes subconscious, and always difficult to unearth. But precisely because of that, they can serve as a basis for long-term, strategic competitive advantage.
3. Level up your listening
Customer-centric leaders listen not only to react to customer needs, but to anticipate customer lifetime value. Operating a customer research team, running customer panels and focus groups, or inviting a handful of customers to the annual employee event does not make your company customer-centric, yet. It is entirely possible for a company to acquire significant customer knowledge (e.g. through psychographic segmentation and end-to-end journey mapping) and still only use it to explain the past, or react to the present situation.
The leaders of the future listen with empathy. While attentive listeners can generate sufficient understanding to react to a customer need in a relevant way, their perception is limited to feelings of sympathy. Empathic listeners, on the other hand, can step outside their own frame of reference to generate a more profound understanding of their customers’ viewpoints. And they will synthesize knowledge to emulate the context in which their customers make decisions, helping them not only to predict customer behavior, but also to model customer intent.
Knowledge is nothing without action
Humility, curiosity and empathy are critical leadership qualities to build customer-centric organizations and experiences. However, as long as corporate goals remain exclusively product- or shareholder-centric, it will be difficult for leaders to propose customer-centric action plans which intuitively link to and impact core KPIs.
Most companies will start making meaningful progress on their path to customer-centricity after they’ve complemented their balanced scorecards with customer-centric metrics like Customer Lifetime Value, Customer Equity, Likelihood to Recommend. Or, for a really slow ramp, maybe start with Share of Wallet instead of Average Revenue per Customer?
