7 ways a CEO demonstrates he/she is serious about being customer centric

Posted by Christopher Brown | Leave a comment

One of the reasons companies struggle in their quest for enhanced levels of customer focus is employees don’t buy the fact that their leadership is serious about making the change. They are looking for signs that this is not just the flavor of the month and it to will pass soon.
Here are 7 ways you can send that message:
1. Define what a customer centric culture means to your organization. What are the values of the organization and how do these translate into how you will treat customers? Even in businesses with very thin margins there are ways to create value that allow companies to differentiate. Take Ingram Micro for example, the world’s largest distributor of computer products. Ingram Micro were the first company to provide their smaller retailers a drop ship capability where they could opt to have products ship directly to customers. This service reduced handling costs for the retailers and added significant value, which Ingram was able to capitalize on through increased market share.

2. Define a customer service charter. Have you defined how customers will be serviced? Is this approach mirrored internally? There are certain fundamentals that every customer values but not every company delivers. Speed of complaint resolution is one example, has your company considered how important this is to your customers? A print shop owner would lose a lot of money if his printer stopped working and was not able to get a fast response. However, a clothing company may have a little more time to get an issue resolved. Regardless of these differences do all employees know how critical certain service elements are to the life of their customers?

3. Measure and benchmark your current levels of customer focus. Customer focus can be measured and compared with the best. You can only manage what you can measure and this goes for culture as well. Tools such as the Market Responsiveness Index (MRI) allow companies to very simply see where they stand versus the best companies across industries and the globe.
Companies with a strong culture of customer focus outperform their competitors on a consistent ongoing basis; this culture forms the bedrock of competitive advantage. Companies like Apple, Zappos, 3M and Nordstrom have dominated their markets with an unrelenting focus on customers.

4. Evaluate your decisions in light of the message they send to customers. When you decide to increase price in order to meet revenue or profit targets for a quarter, think about what message that sends to customers and employees? Is there an equal increase in value being provided? Or will it be perceived as price gouging, taking advantage of captive customers?

5. Top 10 lists of customer insights and issues. The practice of communicating what is on customer’s minds on a regular basis across the entire organization demonstrates that customer’s and their issues are important. Great customer centric companies publish these regularly and they come straight from the top. Treating all feedback as valuable and potentially actionable is energizing. Make sure complaints are viewed as opportunities by presenting them in a “here is what we are going to do about it” fashion.

6. Appoint a Chief Customer Officer (CCO). The appointment of a customer advocate at the most senior levels of an organization demonstrates a real commitment by the CEO and executive team to make customer’s a priority. There is a small but growing number of CCOs in mid-size and large companies. This reflects the trend of leveraging an end-to-end customer experience as a way to differentiate products that are increasingly commoditized.

7. Measure everyone on customer satisfaction. Elevate customer satisfaction and other customer metrics such as lifetime value to the same level as revenue and profits. Businesses succeed when their customers succeed and yet many companies bury the customer metrics in favor of only revenue and profits. But revenue and profits are the outcome of the customer metrics. In competitive markets if you see declines in customer satisfaction, increases in customer defection and reductions in customer lifetime value, a profit decrease is sure to follow. Just ask Reed Hastings of Netflix after some recent mis-steps cost the company more than 800,000 lost customers.

In business, words are meaningless without action, if your company’s vision and mission includes some statement related to customers, what tangible actions do the leaders of the organization take to reinforce this?