Why we're getting "customer focus" all wrong
When I do my keynote talks and workshops around the world, I will sometimes ask a room full of business leaders whether they think their business is “customer-focused.” Inevitably, the vast majority - 80% of CEOs in fact - will agree and when quizzed further many will happily talk about why the customer is so important to them and explain actions and initiatives they have taken to make sure they offer good service to customers.
So why did a recent study reveal that only 8% of customers believe that companies they buy from are customer-focused? Are these CEOs fooling themselves into believing they put the customer first? Or maybe we are using the term “customer focus” in the wrong way?
It is all in the details
A recent study by McKinsey showed that the difference between a company being “customer-focused” and having an “extreme customer focus” is not down to the channels or products – these are the everyday basics that customers would expect companies to get right. In fact, the extremism comes in between the channels, in the little details that we only start to see when cracks appear. Which companies are extremely customer-focused becomes apparent when things go wrong and we see how they deal with complaints of individual customers. For example, a great sign of an extreme customer focus is when a company is ready to actually recommend a competitor if they might offer a better solution for that individual customer – does your business have the confidence to do that?
Successful Belgian radio station, Q-Music built a reputation for going the extra mile for listeners, and takes pride in its slogan “Q is good for you.” In one competition, the station gave a house worth €250,000 to a lucky listener. Of course, the winner was delighted, but delight quickly turned into despair when the construction company walked away from the job half-way through, turning a wonderful prize into a complete nightmare.
Q-Music quickly came up with a solution and instead paid €250,000 in cash straight to the winners so they could buy a new house. On the face of it, you might think that was the only fair thing to do, but ask yourself how many companies would have instead opted for a long drawn out legal solution between sponsors, builders and several other parties in an attempt to save money. Q-Music put the listener first, even though it must have cost a lot more in the short-term, and this extreme customer focus has helped build a loyal army of listeners and brand advocates that is worth a lot more.
So how do companies show they really do have an extreme customer focus?
It is a valuable exercise to take a moment to look at your own “symbols of extremism.” These are the details by which you prove to the customer (and to yourself) that you really mean it, and while they might seem like minor details, the little things you do to go the extra mile can make you stand out from the crowd and make your customer-focused attitude visible for both customers and employees.
Behaviour follows reward
If a company has any desire to achieve “extreme customer focus”, it must consider its bonus and evaluation system. With a purely sales and financially-driven bonus system, the degree of customer focus is always going to be in question.
One relatively small insurer in the Netherlands called ZLM has made itself the exception in the insurance world by evaluating employees only on customer satisfaction rather than any financial parameters. As a result, ZLM now has unquestionably the most satisfied customers in the insurance sector, they now have the biggest share of their market, they are growing at an average rate of 8% per year, and they are the most profitable company in the sector in the Netherlands. It is an interesting paradox that a company without financial targets has the strongest growth and the greatest profitability in the sector.
Management teams who scratch their heads wondering why their company fails to make the transition to extreme customer focus should think about this forgotten barrier: the evaluation and bonus system. Behaviour follows reward – the most profitable companies don´t strive for profit, but for excellent performance.
The value of the human touch
In the increasingly anonymous digital world it can be easy to forget the value that people add to the customer relationship. But real extreme customer focus cannot be achieved without also focusing on the human element within your business.
It is an interesting paradox that the more we embrace digital, the more rare human interaction becomes, and we therefore value it much more highly.
Of course, this is the element of the customer relationship that you cannot automate – computers still cannot offer empathy, passion or creativity – so genuine personal skills must be engrained into your company if you are going to build an emotional connection with your customers and really achieve a culture of extreme customer focus.
Prof. Steven Van Belleghem is author of When Digital Becomes Human, published by Kogan Page, priced £19.99. Follow him on twitter @StevenVBe, subscribe to his videos at www.youtube.com/stevenvanbelleghem or visit www.stevenvanbelleghem.com