In this informative webinar, produced by professional networking organisation InTouch, NextTen’s director of delivery Nick Bush offers some useful advice on how to power up boardroom discussions by putting the customer at the centre.
Make it easy for your stakeholders and your job will become easier too
Selling sand to Saudis? Carrying coals to Newcastle? Or just trying to convince your senior stakeholders to focus the attentions of the company on the people who pay their salaries – the customers – and providing a much better experience for them?
Sometimes being in customer experience (CX) feels like a hard sell, but it doesn’t need to be that way.
Why so hard?
It’s one thing to persuade the board of the advantages of investing in a ritzy new system to streamline accounting, raise productivity in the back office or make you compliant with the latest regulatory requirement. These are all things that have an immediately attractive requirement where the benefits – cost saving, keeping directors out of jail and so forth – don’t require a massive feat of the imagination to get a handle on.
And they don’t require anyone to change.
That’s the problem with customer experience, particularly if you want to get significant benefits out of it. It requires a change in behaviour at the top level of the organisation as much as it does at the front line: executives who’ve been happily building a career in their organisational silos will suddenly need to work cross-functionally to find out how to identify customers’ real needs (outcomes) and then provide excellent experiences with streamlined processes to deliver them.
That’s not something people take to naturally so making the case for customer-centricity can be hard.
But sometimes we make things too hard for ourselves.
I’ve had a couple of conversations in the last few days that changed my views on how we present customer-centricity at board level.
I delivered a webinar on Bringing Customer Experience into the Boardroom for InTouch Networks to a couple of hundred aspiring consultants and non-executive directors. There were some really interesting questions at the end, including one from someone who asked how I would deal with the sensitivities of boardrooms around outcome-focused, trajectory-driven ways of working (two topics I had introduced in the session)? A great question and I was reminded of hard times I had had earlier in my career when I attempted to convince senior stakeholders of the “rightness” of my position without taking their sensitivities into consideration. It’s easy to fall into the trap with anything customer-related that it must self-evidently be a good thing to do because it benefits the customer. Senior executives won’t see it that way though because they haven’t been through the same arguments that you have to get to your point of view – and often you don’t have time to take them through the same learning process that you went on, so the simplistic “moral” argument is one you fall back on.
I found a similar parallel when talking to Danny Witter, co-founder of Work for Good. Work for Good encourages businesses to make donations to charities by connecting businesses with charities on their website. Only 2% of charitable donations are made by companies so there’s an opportunity to increase that level massively. But, like customer-centricity, it’s not an easy sell – despite being a self-evidently good thing to do.
Take it easy
What struck me, talking to Danny, is that Work for Good has done a number of things that CX leads can learn from. I’ve covered some of the return on investment considerations that CX involves elsewhere but this conversation yielded some additional insights. Here’s what Work for Good do that helps make the leap into the world of philanthropy more appealing for hard-nosed business leaders:
- Provide advice
The Work for Good site is a great source of advice and information for businesses considering introducing charitable giving into their commercial model. There are also tools to help you get employees on board as well.
- Reduce legal risks
One thing I learnt about giving from my conversation with Danny is that there’s a legal requirement for businesses to set up something called a commercial participation agreement (CPA) if they encourage the purchase of goods or services on the basis that some of the proceeds will go to charity, or that a donation will be made. Doing this can make business giving quite a cumbersome administrative task by Work for Good take away the hassle: if you sign up for the service that’s done for you.
- Reduce admin hassle
As you might expect from a web-based business you can be up and running in a few clicks – and it’s easy for charities to register with the site as well.
- Play to self-interest
Some people might argue that charitable giving should be done anonymously – certainly traditional British attitudes favour discretion over publicly promoting one’s generosity – and this might well apply to personal donations. For commercial giving Work for Good take the opposite view and emphasises the marketing and branding benefits of having their paperclip logo and other information displayed on your website.
Papa, don’t preach
In short, Work for Good – and my thoughts about the question asked on my webinar – provide some useful lessons for those tasked with selling CX to seniors. If that’s your challenge, try asking yourself the following questions:
- Am I automatically assuming I am “right”?
Does your zeal for improving CX mean you’re in danger of steamrollering objections or assuming that your stakeholders just lack your unique insight into the obvious benefits of CX? Are you preaching to the unconverted rather than listening to what they want?
- Am I helping people understand?
There’s no short cut for educating the board, but don’t send them links to a CX webinar (not even mine) hoping they’ll have the time to educate themselves. Instead, take the time to gather stories of current customers and why they’re not happy (tip: complaints are a goldmine for this).
- Have I reduced or eliminated risks?
Have you adequately considered any compliance of regulatory risks in what you’re proposing – particularly if greater front-line empowerment is part of the proposal – and have you taken steps to minimise this.
- Have I reduced hassle?
What’s the easiest part of your proposal that you could set up as a pilot or proof of concept implementation?
- How does the proposed change play to stakeholders’ self-interest?
Possibly the hardest question to answer – and one that we’ll explore further in future papers – but how can moving to a customer-centric culture with the attendant breaking down of barriers and perceived threats to personal empires be turned into something that furthers the company’s objectives?
Being “good” or being right isn’t enough. Thinking – like the best sales people do – about what’s in the customer or client’s interests is the way to succeed.
The old retail model is dying – consolidation merely postpones the inevitable
The news that UK supermarket Sainsbury’s and Walmart subsidiary Asda plan to merge may have been judged a great move by many analysts but it’s not. It’s short-termist. It panders mainly to the immediate shareholder value issues and, as so often happens, the customer – who holds the key to long term value and success – is insufficiently considered.
Sainsbury’s Chairman, David Tyler, has claimed this consolidation as the most “historic and pivotal move” they can make. History will judge this a short-sighted manoeuvre based on preserving a predominantly bricks-and-mortar player in an industry that’s dying on its feet – unless it changes significantly.
Vote with your clicks
If you’re a customer in a town where your supermarket options are Asda or Sainsbury’s ability get exactly what you want with minimised household spend (part of their model) will be limited. In addition, the time, effort, inconvenience and – in my case – sheer boredom involved will encourage me to search for other options. If you’re a customer in cyberspace you have more shopping options than you know what to do with. Its arguable that having 20 choices of grade, size, price and expiration date of a cherry tomato might add layers of complication and the illusion of control.
It might be simplistic to say that online will replace “offline” – the current low penetration of Amazon Fresh suggests that it will take time – because some elements of shopping remain resistant to online. This of course will surely change and as it does rapidly accelerate. Do you honestly see the bricks-and-mortar model being the same in 2025 as it is now? People who extrapolate based on prior behaviour might argue differently on the basis that the experience is not much different from 2011 but extrapolation arguments in a world of customer innovation opportunity are often TOTALLY wrong!
Yes, we’ve had online shopping for a decade or so and we still have plenty of physical spaces to go and buy stuff in so why panic? The trend extrapolators might have a point? Reality check: we’re already seeing the death of many high street retailers as they lose out to online operations so although the death of the high street has been a long time coming, it looks like it’s not only here but accelerating. The high street actually has a big part to play but not in its current guise. This is where customer success, experience and exposure to innovation plays a critical role.
Focusing on what I term customer success which consists of customer outcomes and related experiences (outcome and experience are different things) gets us away from this sterile “bricks v clicks” debate and opens up innovative new areas for growth.
My personal outcome for food shopping is to have my chosen fresh foodstuffs, delivered not only to my house but placed exactly where I want them in my kitchen. I don’t want to have to repeat my eggs, milk and bread order every time, but I do want the option to adapt it if I expect visitors. I don’t want to worry about being in the house when there is delivery, but I also want to ensure my property remains secure.
As a Customer Success expert, I know that there are many people who would want exactly the same, but I also know that there are a large number of variants – because we have levels of uniqueness which we expect to be actively considered. I am also aware that the distribution model for this type of shopping whilst lower cost than traditional bricks and mortar is still more expensive than say “click and collect”. For a few pounds reduction I might opt for a model which places my shopping in the boot of my car at a click and collect location such as a local petrol station.
Does this mean the current bricks and mortar is redundant? Time will tell but I think that it does not have to be the case.
If I now live in a heady world where I don’t need to walk up and down an aisle why would I go to the “bricks and mortar” and spend?
What experiences around food would make you get of the house? Certainly, interacting with people and companies online will make many crave getting away from a screen – so what sort of experiences would make you move? Maybe it would be to experience something specific. Maybe it would be to learn something. Maybe it would be to better understand new ideas around nutrition. Maybe it would be meet your friends and do something. I certainly would not meet my friends to do a weekly shop, but I might go if a celebrity chef was doing a workshop which you could join in. Is that workable? Not sure, but I do know that a commodity process such as basic shopping will not be the domain of the high street but companies that offer the customer something different most certainly will.
You can start to think differently about the outcome and ask questions like:
- How does the arrival of more intelligent devices change the ability to predict my demand for specific goods on specific days?
- Could we use my social network to pick up shopping for me and automatically recompense them? (note that this could be of real benefit to people with mobility constraints)
- What other delivery mechanisms might work? How can the principal online provider integrate with other local providers to optimise deliveries?
This is only a starter list – if I took a walk to the shops I might even think up some more…
As Charles Bennett noted recently, building customer-centric companies is difficult, usually because customer-centric change must have a business case that stands up to scrutiny alongside other more concrete initiatives. When you get to the level of big strategic moves with tangible benefits (in Sainsbury’s case, assuming 73 stores can be offloaded, and other economies of scale realised) you realise just how far strategic thinking has to go to put the customer genuinely at the centre.
I’m hoping that somewhere in Sainsbury’s there’s a someone taking a creative view of what the future of retail might look like from a customer perspective and how the company might respond to it, but I’m not convinced. I think it’s more likely that the company will lurch, albeit elegantly, from one defensive manoeuvre to another – we’ve fended off the lower cost supermarkets (Aldi/Lidl) and we’re staying ahead of Amazon (for now, by removing one UK acquisition target from the game) – keeping analysts happy and, in the case of one senior executive, apparently staying “in the money”.
But it’s not the best outcome for customers and, ultimately, not the best one for the company.
There are attractions in the subscription model, but only if it’s genuinely customer-centric
Somewhere along the road from a government department to an FTSE100-floated plc, BT stopped referring to its subscribers and started referring to them as customers. Strangely, the outmoded term is making a comeback as more and more companies try to move their customers onto a subscription model for their products and services.
The problem is, it’s not going to work for everyone.
I got confused by an advert in London’s Evening Standard this week: it features a toy giraffe in a toothbrush and on closer inspection is promoting a new subscription service – Brushbox – for toothbrushes and toothpaste.
That’s right, those commonplace items you can find in any supermarket, corner shop or chemist. I’m struggling to see why anyone would need to sign up for a service that sends you a new toothbrush when you should be changing it. Presumably you’re one of the feckless “70% of us who don’t change our toothbrush when we should”. The advert, which promises “a fun and environmentally friendly way to look after your family’s oral care” reminds us that 1 in 3 children are starting school with signs of tooth decay so it’s basically tooth-shaming you into coughing up for a subscription.
I’m not immune to the charms of a subscription service though: I’ve been having razor blades delivered to my home on a regular basis and that works for me as the product – Harry’s in my case (other subscription services are available) – is superior to others that I’ve used and isn’t available in shops. I don’t think I’m paying a premium for this either – possibly because replacement blades are eye-wateringly expensive whether you buy them in a shop or online.
The model has been well-established in the business sector for many years. When I started out in the computer industry a few decades ago, we would seek maintenance contracts as a way of extending our software project income and also giving the client the ability to have regular upgrades. The other night I was talking to someone about how Rolls-Royce’s jet engine sales include an ongoing maintenance contract – sensor technology enables Rolls Royce to keep tabs on engine condition and notify the aircraft operator of any problems in real time. Preventing a flight taking off with a faulty engine seems like a premium worth paying and in the long term will more than likely have cost benefits for the subscriber in reduced overall down time.
But I’m wondering if in the consumer world we may well have reached “peak subscriber”…
Too many schemes, not enough customers
The subscription model clearly has benefits for customers but, on inspection, has even more attraction for businesses and their investors. Viewing customers as a source of ongoing income is easier to account for than a number of one-off transactions. And advances in technology mean that businesses can use the data gleaned from the customer base to predict demand and tailor offerings accordingly.
However, as an article in The Economist (another of my subscriptions) points out, the downside of the model lies in the high cost to subsidise customer acquisition and likely increasing volatility of the market. As competitors offer better subscription schemes, customers will vote with their feet and, with more businesses finding ways to run subscription schemes the choice will only increase.
The answer to this, at first sight, is to make it difficult for customers to end their subscriptions early. Some gym chains, for example, have been doing this for years, locking customers into annual schemes at a reduced rate. This approach is anything but customer-centric: it’s a defensive manoeuvre that gets the business off the hook of continuing to make their offer more attractive.
And this is the nub of the challenge: those businesses that will succeed with a subscription model are those that commit to continuously improving the value they deliver to customers. Netflix, for example, continues to offer high-quality unique content to its subscriber base and has a low customer churn rate as a result. Spotify, the music streaming service, has a more volatile base as much of its content is available from other sources – YouTube and recorded media – and faces a challenge of proving to enough paying customers that it provides something unique.
Businesses adopting a subscription model need to get their priorities straight: provide a compelling reason to subscribe (hint: customer outcomes are a good way to start) and then work out how that subscriber base gets “monetised”.
I’m still confused by the giraffe though.
When a great customer experience isn’t the only answer
A few weeks ago, I wrote a glowing account of my post-Christmas experience with bed supplier Warren Evans and, more recently, The Next Ten Years gave an upbeat – albeit quite conditional – assessment of the future of High Street retail.
Warren Evans, despite its customer-centric approach and reputation for quality has not been able to overcome its recent financial woes and is now in receivership. A whole swathe of other retailers continue to experience difficult times.
Does this imply that being customer-centric is not a strong enough guarantee for business success?
The problems facing retail are many and multi-faceted. Tightening consumer spending fuelled by Brexit uncertainty, rising material and labour costs, high levels of personal debt and the threat of rising interest rates. The answer for many companies has been the traditional focus on cost-cutting, with the loss of managerial roles in Sainsbury’s and Debenhams being recent example.
So, is cost-cutting the real answer in these troubled times? Should CX take a back seat?
The solutions adopted by surviving retailers would appear to suggest this is the case, given yet another apparently customer-centric retailer having failed.
Back in the 1990s I worked for the consultancy that originated business reengineering. Like any company that majored on process-driven innovation, we invested heavily in looking for the “next big thing”. Business or organisational agility became, at a conceptual level at least, the candidate with the biggest potential. How could companies who had reengineered themselves into streamlined super-beasts move themselves to the next business performance level?
By becoming more agile, of course!
Great idea – what did it mean in practice?
We looked out for examples of companies who could demonstrate success through re-inventing themselves and we discovered Silver Platter – the originators of the CD-ROM as an information-storing medium.
I remember attending a workshop with their CEO, Bela Hatvany. Bela radiated gravitas and wisdom as he described the Silver Platter philosophy – being big on empowerment and innovation was an emphasis as I recall. Then one delegate asked him a great question: “who was the most important – customers, employees or shareholders?”
Bela’s response became abstract and practical: “If you have an injury in your leg, you get your leg bandaged; if you have a head-cold, you take aspirin; if your arm hurts, that’s where your attention is.”
I may be paraphrasing somewhat but the essence of his response was that you treat what’s painful, but you keep the whole body together.
I suspect Warren Evans’ problem was that they focused on a great customer experience without balancing the more traditional factors that impacted their business.You could make the same argument that strong values and outcomes came at too high a price – ethical sourcing, pioneering the option to return a mattress after 120 days – as being potential weaknesses.
The sad truth is that looking for a factor to “blame” is an exercise in 20:20 hindsight – what is the lesson for those businesses trying to avoid a similar fate?
It’s a combination of great customer centric strategic thinking – the trajectory concept described in last week’s article really helps here – and being agile enough to switch attention when required.
If you’re a customer-centric company you should not stop being customer-centric all of a sudden, you maintain the focus on the customer – an investment you wouldn’t ever want to throw away – whilst managing downsizing, de-layering, product rationalisation or whatever gets you through the tough times.
It’s the ability to seamlessly add the necessary extra dimension to core focus – that’s true business agility – which will give you the best chances of success.