The Simple, Proven Steps to Creating a Customer-Focused Organization
Data shows that investing in customer experience can drive significant growth.
There is a magic question that can turn a business into a customer-focused organization.
This question, according to Denyse Drummond-Dunn, is: “What would my clients think? It is this question which, according to Drummond-Dunn, should animate the actions of all employees of a company.
Drummond-Dunn is the main catalyst for C3Centricity. After working at many large organizations, including P&G, she launched her coaching practice with the goal of helping her clients develop a customer-focused strategy. She will present some of her ideas during her “You are not your client” session on June 15 at the Channel Partners Europe conference.
She previewed her speech in a Q&A with Channel Futures.
Channel Futures: You state that research has shown significant return on a customer-focused strategy. Could you tell us more about these discoveries?
Denyse Drummond-Dunn: There are many research studies proving the benefits of a customer-focused strategy. The first one that probably had the biggest impact on me and my clients was the 2012 CX ROI study from Watermark Consulting. Using data from Forrester and Temkin, he showed that companies that excel in customer experience grow three times faster than the S&P index and seven times faster than companies that lag behind. Their latest analysis shows a slightly lower advantage than a decade ago (3x vs. 7x), which I hope indicates that more companies are now adopting a customer-centric strategy.
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And that’s vital, because when you look at how customers react to their experiences, you quickly see the importance of being more customer-centric. Eighty-nine percent of customers have stopped doing business after just one bad experience (source: RightNow). And don’t forget that customers tell an average of nine people about a positive brand experience. But they tell 16 people about a negative (Deloitte). The decision becomes obvious, especially when 86% of customers would pay more for a better experience (Temkin).
Therefore, ensure that your customers are not only satisfied, but surprised and delighted with your service. They will stay loyal and even pay more than they otherwise would. And the impact on the business? A 2% increase in customer retention has the same impact on profits as a 10% cost reduction (HBS).
CF: It’s hard to find a company that doesn’t present itself as dedicated to the customer experience. Do you have any examples of a company whose actions did not align with their claims/aspirations to be customer first?
JDD: An example may surprise you, as this is a leading food, beverage and household products company in Europe, known to be one of the most customer-centric companies. When I first started working with them, as I often do with a new client, I called their customer service. Imagine my surprise to learn that I could only contact them during office hours.
Since they manufacture a lot of food products, customers looking for information or advice are more likely to come to them when preparing meals. When I shared this fact with them, and that was over a decade ago now, they realized they still had work to do to improve their customer-centric strategy. I often notice that the most customer-centric companies are always the ones looking to improve. In contrast, many more talk the talk, but actually don’t walk the walk.
CF: Do you have any success stories, perhaps from your own career, of how a true customer-centric mindset has helped a business grow?
JDD: Yes, of course, I have a lot. Another customer, a soft drink manufacturer in Japan, wanted to launch a new fruit flavored soft drink. Now, it might seem logical that when they first reached out to me for my support, they were looking for competitors who also made fruit flavored soft drinks.
I persuaded them to take a more customer-centric approach, starting their analysis with all drink consumers. We then focused on cold drinks, then soft drinks, then still soft drinks, and finally fruit flavored soft drinks.
By working in this way, what I call “zooming in”, for category identification, they discovered that as a drink containing fruit juices, consumers actually saw them as competitors to drinks energizing. They positioned their new product this way, and it was a huge success. Not only did it appeal to these consumers, but it was also purchased by competing fruit-flavoured soft drink consumers. So they effectively doubled their category penetration.
CF: Is there anything else you would like to add?
JDD: I would like to start with a simple yet extremely powerful way for any organization to quickly become more customer-centric. It’s this: every time a decision is made, employees need to ask themselves what their customers would think of it. If they realize their customers wouldn’t like it, then the decision needs to be re-evaluated. I call it the “magic question” because it magically improves customer focus in every business, regardless of size, industry or region of operation.