In the previous post, I shared the challenges that organisations are faced with on the journey of trying to become customer-centric organisations.
Without doubt, customer obsessed organisations, like Amazon, do things a little differently. But what does customer centricity really means?
In a nutshell, customer-centric organisations put put their customers first in everything they do. Customer centricity is an approach, a culture, a mentality, a mission that dictate the “why”, “how” and “what” where you put your customers at a VIP seat in everything you do regardless of who or where you are. Being customer-centric is not a new concept, it just became unwaveringly more popular as companies realise the long-term and sustainable growth that it creates.
If your organisation is also trying to embrace customer centricity, here is how you can embark the journey to becoming a customer obsessed organisation:
- Focus on customers’ goals rather than customers’ wants
While it is easy to celebrate success and forget why you achieved it in the first place, a true customer obsessed company would never stop their efforts investing in deep relationships with their customers. Once your product is released, you can be easily caught up in the loop of chasing customers wants, or worse, chasing business wants, what the business thinks the customer wants. If you ask the customers what they want, they would not know most of the time. Or as Steve Jobs says:
A much better way of approaching this challenge is to create solutions around customer’s goals or jobs, not wants. Customer jobs never change, while wants change every day.
Here is an example: listening to music is a customer job. This job never changed for centuries. Though the solution for it has drastically changed from radio, CD players, Mp3 players, iPods, Spotify, Soundcloud, Shazam etc.
Customer jobs rarely change. It is the wants that change all the time.
2. Manage the progress of the projects through learning milestones
Instead of giving a big budget, which has proven to only increase the chances of failure, specifically for the new products or services, give your teams a small budget and environment to test their hypothesis on which the idea was built, specifically testing value and growth hypotheses.
Value hypothesis are built around the main thesis: will the customers find value in my product or service?
Growth hypothesis: how many of my active customers will spread the word or come back to use my product or service again?
Throughout each sprint, share the learnings across the whole team. Immerse yourself in the process of learning as learning can be felt intangible to many compared to delivering a piece of code, or a tangible product. When trying to set up a company culture of innovation, do not celebrate the mere fact that you got dozens ideas that are full of assumptions, celebrate ideas that have evidence or validated learning and allocate the budget accordingly because like Michael Schrage says:
“A testable idea is better than a good idea.”
True customer centric leaders, who take this mentality of testing the products quickly and cheaply, drive this behaviour within their organisation from the top. Example of how Scott Cook does it in INTUIT:
3. If you focus too much on the competition, you will end up being like them
Too often companies spend way too much time on the competition rather than on understanding their own customers. Say you have released a big successful product to the market and now what? Customers constantly tell you what new features they want while the competitors deploy more features stealing your customers. You are forced to deploy new features to keep up with the competition which leads to infectious disease called “featuritis”, phenomena conceptualised by Don Norman, an author of “Design of Everyday Things”. As Don explains:
“If you realise you add the number of features of a product extending the number beyond all reason, there is no way that product can remain usable or understandable over time.”
Harvard professor Youngme Moon, argues in her book “Different”:
If you match features of your competitors you will end up giving no reason for a customer to prefer one over another. Instead of focusing on your competition, concentrate on ares where you are stronger and strengthen them even more.
Another way to look at it is to take a scientific approach deployed by user experience designers. Quite often not knowing what solutions can be while immersing yourself in discovering the customer, you will be surprised with the windows of unheard or unseen possibilities that it can lead to. If the effort was spent more on talking to customers, focus groups, contextual interview, 1:1 interviews, ethnographic research, the empathy towards the customers would have been far deeper. And you would be able to offer the customers what they never expected.
Jeff Bezos, CEO of Amazon, mentions in one of his shareholder letter:
“Good inventors and designers deeply understand their customer. They spend tremendous energy developing that intuition.”
4. Failure is the only way to learn
If our execution was always perfect, then we would not have learnt anything new and worse we are probably too late in the game. It means we were too sure of our product or service. Eric Ries in “Lean StartUp” emphasises the importance of building the products and releasing them early in the form of prototypes, mockups, beta versions to test with the small group of audience (early adopters) to then measure the metrics, learn from qualitative feedback that would help to make ultimate decision whether to pivot or persevere.
Imagine a dedicated talented team working on the product for 2 years to only realise that customers never wanted it at the end of 2 years. How hard will it be for the team to accept that fact, not to mention to let go or pivot? The concept of Build-Measure-Learn feedback loop and do it quickly to then decide whether to persevere or pivot is at the core of the successful startups or new initiatives. It is a rigorous methodology that became a global movement amongst many startups and large companies that are building new products and services under uncertain conditions.
5. Keep your customers happy and thus your staff happy
The equation is simple. For customer-obsessed companies, the priority should not be your competitors, businesses, your bosses or your bosses’ bosses. Priority should be the people who drop by your shops, who click on your websites, who make a decision to pay for your product or service and who trust your vision. The challenge is how you can attract, retain and grow the customer stickiness through meaningful and trustworthy relationships. Jeff Bazos, CEO of Amazon says:
“Look. I want you to wake up every morning terrified with your sheets drenched in sweat, but don’t be afraid of our competitors, be afraid of our customers, because those are the people with whom we have a relationship.”
If you can figure out what makes your customers happy, the next obvious step is do everything to keep the people who are directly engaged with your customers happy, and that is your staff. It is a healthy loop that can get you closest to success which in turn would keep your shareholders happy. While everybody seems to have heard this, it is easy to lose focus due to internal political dynamics. Instead, steer your focus towards what truly matters.
Your customers.
“If the employees come first, then they’re happy. A motivated employee treats the customer well. The customer is happy so they keep coming back, which pleases the shareholders. It’s not one of the enduring green mysteries of all time, it is just the way it is”.
To sum up, customer centricity takes a mindset change at all levels, and most helpful if it can be driven from the top. Regardless of which role you take in an organisation, you can drive this vision and ultimately your perverseness will lead to success stories with which you will be able to move the mountains. If you strive to be a more customer-centric company, remember to keep these 5 things in mind:
- Focus on customer’s goals not wants
- Managed progress of the projects through learning milestonses
- If you focus on competition, you will end up being like them
- Failure is the only way to learn
- Keep your customers and staff happy
In the future posts, I will give in-depth walkthrough of specific methodologies, techniques and tools that companies can use to minimise the costs of failure.
If you want to learn more, read “Lean Startup” by Eric Ries, “Business model generation” and “Value Proposition Design” by Alexander Osterwalder and Yves Pigneur.