Welcome to my second article in a series about assessing customer centricity in our global Customer Experience consultancy. All organizations are somewhere on a spectrum from Naïve to Natural, with Naïve being the least customer-centric and Natural being the most. The processes you have internally reflect on the experience you provide the customer.
To assess an organization, we look at nine areas of internal operations to determine where they are. Last time, I explained two of the nine areas, People and Culture. This time, I am tackling three more including, Customer Strategy, Marketing, and Customer Expectations.
Customer Strategy
Let’s start our first area, Customer Strategy, by reviewing Customer Segmentation. Customer Segmentation is how you classify your existing customers into different groups. It is an essential part of using the behavioral sciences to improve your customer experience. Knowing what your customers value or want is a critical step to giving it to them. Each group has different values, and it’s your job to know what they are.
However, knowing how an organization segments customers is also essential for the Customer-Centricity assessment. For example, if an organization segments customers by the product they buy, I know this organization is on the Naïve side of Customer Strategy. On the other hand, if the organization segments customers based on behaviors, I know I am talking to a Natural Organization—at least in this area of internal operations.
Customer Centricity in how you segment is one of many indicators that start to tell you about the mentality of an organization. For example, if you only look at the product, you could inadvertently skip some of your most significant customers if you happen to pick a product they don’t buy from you. Worse, suppose you decide to use that product your important customer doesn’t buy from you as the litmus test for assigning resources. In that case, you could damage the relationship by not giving that customer enough.
We say that Transactional companies, which are one step closer to Natural than Naïve firms, focus on revenue instead of products. That is a bit more customer-centric because it assesses the customer from a different viewpoint and is more likely to lead to better decisions.
Enlightened companies, which are at the next step toward Natural, might tell you they segment by industry. We like that segmentation because it views a customer base as having different values for the products and services you provide specific to their business needs. That also indicates they have additional requirements and decision-making criteria than customers in another vertical. Effectively, it is the beginning of understanding customers and what they want, which is the foundation for customer-centricity in this area.
Natural companies understand their customers by their behavior, which is foundational to using behavioral sciences to improve the experience. When you know what they are doing and why you can help them do more of what you want by tweaking your experience that influences their behavior.
Another equally important area of Customer Strategy is the alignment your experience team has with other departments. Do they operate in a silo alongside the different department silos in your organization? Is there a functional strategy that governs department processes that align with putting the customer at the center of everything you do?
Naïve companies wouldn’t have a customer experience strategy. Transactional companies would have functional strategies in the departments, but they wouldn’t align with other departments. Enlightened organizations would have a Customer Strategy, but they haven’t pulled it down into all the different departments’ functional strategies (yet). Natural companies have a functional strategy in each department, but if there is ever a conflict, the customer wins every time. In other words, the customer is the dominant strategy, the ace, the trump card, or whatever metaphor works best for you.
Customer Centricity does not mean that you give the customer everything they want. It means understanding the customers is baked into the organization, and they wish to govern the organization’s decisions at every level. It means that you consider the impact on customers for things like deep staffing decisions or legal policies you employ, or even recruitment policies. These areas might not have direct contact with customers all the time, but they do impact it, and Natural organizations understand and manage that to have a customer focus.
Marketing and Branding
In our next area of internal operations, we look at the alignment between the brand that you market to customers and the Customer Experience you provide. Naïve companies might have a lot to say about the brand but little to nothing about Customer Experience. Natural companies, on the contrary, would have them aligned at every point—and likely through a collaborative effort between the two areas of the organizations.
Many organizations in the middle of these two extremes have a different relationship, perhaps a tenuous connection at best. That means the Brand team is doing one thing and the Customer Experience team is doing another, and, through sheer luck in some cases, they overlap a bit here and there.
We were talking with a client about their brand values. They told me that one of the brand values was Red. What did that mean? I could tell there was a great deal of intellectualization that had gone into that concept. Still, it was less clear how the intangible idea of Red manifested in the actual, real-world Customer Experience. In other words, what does Red mean to the customer contact center? That’s what I mean about a Brand and Customer Experience not aligning.
I always say that the brand makes the promise in the marketplace. The customer experience should deliver against that promise.
I’m not advocating that customer experience is more important than brand. However, it would help to think through how the brand manifests itself in the Customer Experience and that alignment. Go back to the question of the degree of alignment between those two. Does that make sense?
Another way we assess this area is how marketing briefs customer-facing people about advertising campaigns before they go live. We find this an important place to understand because it reflects in the actual Customer Experience. For example, if a customer knows more about it than the employee, the customer feels like those briefings never happened, leading to feeling disappointed. Naïve companies don’t brief these teams at all; Natural companies do.
Also, we look at how an organization emphasizes market research. In other words, what does organization research cover? Naïve organizations, if they even engaged in market research at all, would use their resources for product research. The transactional organization would perhaps include customer service in their product research. Enlightened companies would research customer feelings, like what delights or frustrates customers. Natural companies not only get into conscious emotions but also consider the subconscious cues the market research method delivered and how that affected responses. So, looking for the hidden things, like how customers say one thing and often do another and why.
Customer Expectations
We also assess the way the organization looks at managing customers’ expectations. There are expectations that every customer brings to an experience. When you meet or exceed them, you often have a happy customer. Unfortunately, it can go the other way, too. Customer-centric organizations manage these expectations, whether they are emotional, meaning how a customer feels during the experience, environmental, meaning things like cleanliness or safety, or physical, which refers to processor speeds or inventory shipping methods.
We were working for a credit card company many years ago. But, unfortunately, when it came to how the company treated customers with financial difficulties, they didn’t see a way to improve what they saw as a negative experience of chasing money no matter how you handled it.
They had essentially excused themselves from this part of the Customer Experience. We convinced them that this was a mistake and that they could improve the experience by treating people fairly. They changed, and it worked. Sometimes it takes an outside perspective to change the way things “are always done around here.”
We had a similar experience with a medical center that treated cancer patients. Having cancer is a bad experience. However, there is a significant difference between the what, which is having cancer, and the how which refers to how you are treated during your care. We showed them that focusing on how they provide the experience for a lousy situation mattered to patients, and it improved their patient care.
Am I saying that you shouldn’t chase the money or try to cure cancer? Of course not. You should, but you should also be empathetic to the customer’s situation. Naive organizations would not. They only care about what they can do to close the deal. Natural companies would take their time, consider the words and phrases they used, and provide a better experience for a bad moment. They would not focus on what they were doing but instead on how they were doing it.
We assess this area of Customer Expectations in a few different ways. First, we look at how frequently an organization reviews what people expect. So, if your research is ten years old, it’s indicative that you are more Naïve than Natural. We think a Natural organization investigates these expectations at least once a year. However, in our present circumstances, anyone using research from before the pandemic should probably throw it out and start over. A lot of things have changed over the past year and a half as far as expectations.
Another area we assess is how the company organizes itself around the customers. What’s the degree of integration between the channels? Do customers have to phone different parts of the organization to get responses? Does an organization view the complete customer? All of these answers help us see how customer-centric a company is.
Much like an elusive construct in academic theory, customer centricity has no single measure for it. Instead, the best way to measure it is to look at the areas that contribute to it and see how they converge. Of all the things I shared about these areas today, you can see that no single one will capture it. If you want to get a good handle on it, it would be best to have a comprehensive evaluation.
Moreover, if you do this in an extensive organization, you get different parts that can be more customer-centric than other parts of the organization. We have seen it happen in large pharmaceuticals where one organization was more customer-centric than others. However, you can identify best practices and share them with the other departments.
As I mentioned before, it is the first time I have shared the details of the deep dive we do into these assessments, including some of the critical questions we ask. I hope that this will help you assess organizations on your own, starting with yours.
There you have it. No promotions, no gimmicks, just good information.
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