Todd Hollander Market Research

In a recent posting (”How to develop a customer-centric business model,“ March 08, 2007), I discussed an article in the San Francisco Chronicle about the benefits of corporations developing a customer-centric approach to business. The author, who defined a customer-centric company as “one that recognizes the only way to add lasting value to the company is to value the customer,” identified seven guiding principles of successful customer-based firms:

1. Focus extensively on delivering value to customers.
2. Forgo short-term results and look instead at long-term business value.
3. Include senior-level buy-in in your customer-based program.
4. Share your customer-focused initiatives with employees, partners and customers.
5. Recognize that traditional measurement tools may not adequately track your customer values, such as emotions and loyalty.
6. Incorporate employee (and contractor) training as part of the customer-centric movement.
7. Identify internal stakeholders (owners, employees, partners, suppliers) and work to build support within this group.

When attempting to build a customer-centric organization, many companies find it necessary to change the culture of the company from an internal perspective focused on the goals and priorities of each customer-facing department (sales, marketing and service) to an external perspective based on using all of the company’s resources to improve the customer experience.

In a recent posting on SearchCRM.com, Donna Fluss, founder and principal of DMG Consulting, noted that one of the most formidable obstacles to building a customer-centric organization is the fact that there are often conflicting goals among the primary customer-facing departments. Fluss used an illustration to highlight these conflicts.

In assessing these common conflicts, Fluss notes, “Somehow, in the drive to achieve goals, each department loses sight of customers as people and sees them only as “objects” that need to be optimized. Clearly, the obvious answer is to shift the focus back to customers and to align corporate goals.”

Of course, aligning the goals of each customer-facing department is much easier said than done. Nonetheless, it is an essential first step in developing a customer-centric organization. In my experience, companies that succeed in changing the corporate culture tend to do two things:

1. Acknowledge that customers do not care about the goals and priorities of the various departments.
2. Initiate the cultural change from the top down. Senior leadership is essential.

The bottom line: If your company is more focused on the goals and priorities of each customer-facing department than on the needs and wants of each customer, the corporate culture must change - but it has to come from the top.

There was an interesting article in yesterday’s San Francisco Chronicle about the benefits of corporations developing a customer-centric approach to business. The author defines a customer-centric company as “one that recognizes the only way to add lasting value to the company is to value the customer.”

While some may beg to differ with the assertion that this is the only way to add lasting value to the company, there is certainly a body of evidence to suggest that customer-centrism is one of the best ways to add lasting value. But how does a company that is not explicitly and implicitly customer-centric develop this orientation? The Chronicle article offers the following suggestions:

Seven guiding principles of successful customer-based firms:

1. Focus extensively on delivering value to customers.
2. Forgo short-term results and look instead at long-term business value.
3. Include senior-level buy-in in your customer-based program.
4. Share your customer-focused initiatives with employees, partners and customers.
5. Recognize that traditional measurement tools may not adequately track your customer values, such as emotions and loyalty.
6. Incorporate employee (and contractor) training as part of the customer-centric movement.
7. Identify internal stakeholders (owners, employees, partners, suppliers) and work to build support within this group.

These are good suggestions. Of course, they are not always easy. Take for example the point (#2) about forgoing short-term results in favor of building long-term value. This is a often a difficult challenge, especially for public companies. The recently-leaked memo from Starbucks Chairman Howard Schultz questioning whether Starbucks’ drive for growth and efficiency had diluted the customer experience underscores this challenge.

The bottom line: We can learn from the experiences of other companies and use these models to underscore the importance of developing a customer-centric business model. If we don’t, our customers will simply migrate to a company that has one.