Michael Padilla-Pagan Pay
IS CUSTOMER-CENTRICITY A MYTH OR REALITY?
The world of management is prone to fads. They come in waves, littered with keywords that serve as identifying labels – agile, human-centered, digitalization, customer experience, lean, sustainability, networked organizations; the list goes on. Thus, management magazines, the salmon supplements, and presentations from consultants are bursting with them.
Let’s be frank, many of these expressions refer to ideas that were once powerful and full of substance. What tends to happen is they’re utilized with little rigor and end up becoming labels for organizations to certify they are up-to-date. Regardless of whether the ideas behind them have only been superficially applied.
One such idea that has become fashionable is the designing and building of customer-centric companies using Human Centered Design (HCD). These companies define their marketing, sales, services, logistics, and innovation processes (as well as their organizations) around the customer – or what we call ‘Humans.’
Customer-centricity has become one of the fashions I was referring to. Almost all large companies declare that becoming customer-centric is one of their strategic priorities for the coming years – and they have good reason to do so. Studies conducted as recently as last year suggests that companies with advanced maturity in their customer-centric transformation see 2.5 times more revenue growth than those with low maturity. Our own experience tells us a customer-centric operation can increase revenue by 2-4% in just one year.
However, beyond the rhetoric, real progress on the customer-centricity journey for many companies is rather modest. In my personal interaction with boards and executives, I can state that, despite their best efforts, transformations were taking much longer than expected. Some have abandoned the concept already. This is because it takes time and energy to build trust and relevancy with customers/Humans.
The experience of doing this ourselves, across all seven companies, is consistent with the findings of these studies. Strategic intentions to move towards customer-centricity or HCD encounter a number of difficulties – as we have seen first-hand. I’ve noticed companies in industries where we operate are struggling, or having difficulties, because of organizational and cultural problems.
Enterprises in sectors such as banking, travel management, and telecommunications have well-established and powerful products or distribution channel organizations that aren’t always open to the change customer-centricity requires. In the end, they sell products without the human touch of HCD. Don’t believe me? Call them, see if they have an automated system, then see how long does it take you to connect to another human? This is not customer-centric or HCD – this is product-driven.
In our customer-centricity and HCD transformation projects, we apply three principles:
Deep personalization of all interactions with customers. We do this by working together with our customers and being in front of them - always adjusting and reshaping our services, pricing, and communication, which fully personalizes offers and service messages.
Omni-channel by design. We ensure the customer experience is consistent across all channels. Every customer should receive the same offers, support, access, and messages across all channels – and exceptions should be very few and highly motivated. We also add and put in place cultural intelligence because we actually live, invest, and work where we operate.
Harnessing the power of connections, relationships, humans, and communities as well as data. This is about putting advanced personalization "in production" so every business, service, or interaction is informed by it and offers it.
When this philosophy is implemented successfully, one customer tells another customer about our services, capability, and ability to be contacted and reached globally. In reality, this fosters long-term customer relationships and gives them what they want, as well as educating them on what support they need most. This value distinguishes us as a partner, not a vendor, generating a real impact on revenue and margins. It also turns customer-centricity and HCD from myth to reality.