This is the first article in a three-part series exploring what elements companies need to develop a comprehensive customer strategy, as well as the common organizational gaps or challenges that can get in the way. This article originally appeared on CustomerThink (link).
Investing in Your Customers: Part 1
Most companies embrace customer focus or customer experience as a mantra. However, many of the same organizations systematically prioritize near-term revenue ahead of delivering long-term value to their customers. To create sustainable customer value—for their benefit and yours—you must organize everything you do around a cohesive strategy for profitably investing in your customers. This is a customer strategy.
Brian O’Neill, the Chief Client Officer at FIS, takes it a step further: “If you merely focus on the client experience, you will continue in a business as usual manner without even knowing it. Every company out there is doing something to improve the CX. The game changes when you fully commit to the client and center the entire culture around their experience – it is hearts and minds, not just technology. That is where true transformation and differentiation occurs.”
More and more examples show that positive customer sentiment rooted in business outcomes drives sustainable growth and profitability. In today’s fast-paced markets, companies not only face extraordinary competition but also pressure to predict the needs of their customers by better understanding their behavior and how they define value. The smartest companies are figuring out how to imbue the organization with a collaborative, partnership-like atmosphere so that working together, both internally and externally, creates a shared view of desired outcomes.
Delivering value to customers in the moment has become table stakes to compete—with digital transformation quickly advancing from nice-to-have to an essential ingredient for success, especially given the COVID-19 pandemic. Organizations of all sizes and across all industries are under pressure to further digitize and improve customer experiences or risk losing those customers to competitors who are faster and more innovative.
To successfully stand out, companies must develop new strategies and models to deliver customers value that goes beyond broad definitions and the siloed efforts of the past. Every aspect of customer engagement and co-value creation, from initial sales and marketing to customer experience, customer engagement, and service, needs to be clearly defined by a holistic customer strategy. Yesterday’s version of “front office” and “back office” no longer applies. Nearly the entire organization interacts with customers or at least impacts customers’ success in working with you and deriving value from what you deliver. That strategy must be backed by the entire leadership team.
Developing a common approach to customer acquisition, retention, engagement, ease of doing business, product adoption, value realization, and brand advocacy is foundational to creating a comprehensive and modern customer strategy. This requires the involvement of the entire executive suite and careful orchestration across different personalities, objectives, and success measures.
Having that common approach means that you will have one person orchestrating how the strategy comes together and how to execute it across all lines of business. This is the job of the chief customer officer. In short, the CCO’s role is to push the organization to determine the best ways to invest in customers to yield the best return. There are many different CCO models that work. Some CCOs also run Sales. Some run Marketing. Some are identified as Chief Customer and Digital Officer. There are myriad approaches, and all are valid. What’s important is that one individual is responsible for working across the entire company to develop the strategy and then work equally collaboratively across the organization to execute the strategy.
Mike Marcellin, the Chief Marketing Officer of Juniper Networks spoke to me about his views on the role of Marketing: “At Juniper, the Marketing team has always been laser-focused on customer engagement, especially in a pre-sales context. We’ve come to recognize that we can’t do our work in a vacuum—we need an orchestrated customer journey company-wide across all touchpoints, as well as a common, data-driven view of customer health and engagement. Making this investment at Juniper has led to historically high customer satisfaction metrics.”
When the chief customer officer—or the Chief Marketing Officer, in the case of Juniper—begins the hard work of pulling together this investment approach, a clear set of tenets can be applied to assure success. The first steps:
1. Define the priorities of the customer strategy. Will it emphasize customer acquisition first and then retention? Will it drive employee and customer engagement strategies? Will it focus on the elimination of transactional and relationship friction? Will it help customers calculate the value realized? Will it be laser-focused on developing brand advocates out of your most loyal customers? The answer, of course, is yes to all these questions. But it can’t be that simple. Depending on what your corporate strategy is for market share, margin, or employee development, each of these aspects of the customer strategy will have a different level of importance at different times.
2. Clearly indicate how the various parts of the business are affected by the strategy. Look at how each line of business invests and how they will be positively and negatively impacted by execution.
3. Establish what “customer” means in your organization. Definitions vary widely when you consider end customers, direct customers, intermediaries (e.g., agencies, dealers, value-add resellers, distributors), and even employees. There will be a diversity of opinions about what customers are most important to your business. You need to acknowledge B2B versus B2C versus B2B2C customers—for two reasons: increasingly, organizations are both B2B and B2C (or B2B2C) oriented; and B2C customer expectations tend to drive B2B behaviors, expectations, and processes.
4. Get the entire organization on the same page in terms of the language used to describe how you invest in customers, what return is delivered to them, and how that return accrues for your whole organization.
5. Establish a common set of measures to gauge the performance of your customers, in terms of successful and beneficial deployment of your product, and how that ultimately affects your own business.
6. Assess the change management implications of the strategy. We can’t overstate how important change management is for the CEO, CCO, CMO, the overall leadership team, and the customer strategy to be successful. If you’re not driving change across every aspect of your organization, there are likely two problems: either the change is driving you or not nearly enough change is underway.
7. Assess ease of doing business challenges to ferret out exactly where, when, and how you are overly burdensome to your customers. In an environment with more and more business delivered as a service, customers are more likely to flee to your competitor because of real or perceived unnecessary burdens and because of real or perceived reductions in cost and risk associated with switching providers.
8. Develop a common view of the employee experience. It may sound banal, but the employee experience really does drive the customer experience. We see this all the time. The CCO’s best friend should be the CHRO.
9. Define how engaged the executive team is with customers. This is a telling indicator of how the entire organization thinks about and prioritizes investment in customers, customer success, co-value creation, and brand advocacy. Your job as CCO means craftily compelling every single one of your peers to get personally involved with customers and to do so with very specific and measurable objectives. This means that your CFO, CHRO, COO, CEO, CIO, CMO, CDO, CTO, and even the head of your legal department needs to be actively engaged with customers, feeling customer successes and failures and taking on personal responsibility for the customer strategy.
When Nationwide Insurance company simplified its mission to protect customers with “extraordinary care”, CEO Kirt Walker, also created a new CCO position. Per Amy Shore, who was named to that position in October of 2020, “my job has been to build customer strategy core competencies in the enterprise and influence the culture of the company so that all associates understand what extraordinary care looks like.”
In part 2 of this series, we will get into the six gaps or organizational challenges that often get in the way of companies defining and executing a successful customer strategy.#2022#CXStrategy