Customer-Centred Business Design

Designing your brand, operating model and culture to please customers who pay your bills sounds infinitely wise, but is not for the faint hearted. To what extent should your business pursue a strategy of customer-centred business design?

Great consumer-facing businesses make customers a self-fulfilling promise about the experience their organisation can deliver them. By conveying a carefully sculpted brand promise, customers are as informed about what they ought to expect, as employees are about what they must deliver. When everything in between works in synchrony, customers enjoy distinct and favourable experiences that deepen their trust and drive their loyalty, advocacy and good-will. This creates growth.

Many companies believe they are customer-centric until they realise the depths of what this strategy means, especially in operational terms.

What is it?

We argue being highly customer aware is a non-negotiable for any business. However, being customer-centred can range from a strategic option to a necessity depending on your industry, business and circumstance.

We define customer-centred business design as a consistent approach to positioning a business by building its brand, operating model and culture to engage customers in a defined experience at all touchpoints along their customer journey, throughout the customer lifecycle. 

As a company, Apple exemplifies peak practice. ‘Apple’ promises to dramatically enhance customer lifestyles through exceptionally simple, elegant and empowering devices. Through Macs, iPods, iTunes, iPhones, and iPads, Apple has repeatedly demonstrated its ability to deliver on its brand promise.

Yet, Steve Jobs built far more than exceptional products and brands. He uniquely positioned Apple by developing its brand(s), operation and culture to centre on delivering customers a defined experience through its products and service.

To do this, Apple has developed a culture that offers its people the opportunity to create wonders that leave the world better than they found it. It has developed an operating model with marketing, retail, customer support, hardware design, software development and procurement capabilities which work together to develop and package products and services for customers to enjoy.

Here in lies the ‘Apple magic’, its brand promise attracts not only customers, but talented people to work together in an operation that is collectively devoted to delivering exceptional customer experiences at scale.

Building a brand-consistent culture and operating model is an intricate process for a business. Companies who do it well are in effect designing the next frontier for customer engagement and experience in their industries which can prove extremely rewarding in the right circumstance.

Putting customers at the centre

The notion of understanding customers and designing your business for them is not new. The famous sales mantra, “The customer is always right,” provides time stamped evidence from the 1980's acknowledging how important the customer is in sales success. That said, thinking like the customer was typically delegated to sales and marketing, while the remainder of the business ran the business for its own interests, or for shareholders.

What is new today, is:

• What depths companies can choose to go to in designing their business and organisation for customers.
• The data, insights and new management methods for customer-centred business design.
• The unprecedented power of customers.

1) New depths to business design 

As mentioned, thinking like the customer used to be a responsibility assigned to sales and marketing. That was so last century!

To be classed a customer-centric organisation requires end-to-end alignment with delivering a defined customer experience. The experience must be all encompassing, starting from initial contact through the pre-purchase phase, immediately after purchase, and providing support ongoing. Accomplishing this frequently requires large-scale changes in management mindset, business processes and systems, organisation design, business capabilities, operating culture, people processes and policies and talent mix. Everything must be reviewed through a customer lens and if it is not adding value to customers, fix or eliminate it. There can be no sacred cows.

A NZ home and contents insurer built its business around a promise of 'customer care' in the early 2000's. At the time it was a mutual organisation, meaning it was financed by, and run for the benefit of its members, so positioning its brand around 'caring' differentiated it from its comparatively clinical corporate opponents.

One area it focused heavily on was setting up claims processing to respond rapidly so frontline staff could provide customers facing especially challenging circumstances a marginal amount over the written value of their policies. This was budgeted for and carefully controlled by clear parameters, approvals and close monitoring. But for customers who had just lost their home under tragic circumstances, the company and its staff were genuinely helping them get back on their feet.

Deeply ingrained customer centricity such as this involves making an organisation-wide commitment to customers which is not easy to achieve and maintain.

2) Management's improved access to consumer insights, tools and proven methods

As devices and the internet become ubiquitous, the availability of fresh data has grown exponentially. With the right tools, this data can be gathered from near-and-far and mined for fresh insights and opportunities.

Fast growing businesses like Informatica Cloud provide companies cloud enabled software services that allow them to access, integrate, and manage all their information assets. So, with an abundance of useful data available, quality analysis can be undertaken.

Using readily available analytic tools and a combination of new frameworks and metrics for mapping and measuring the customer experience, an inside-out and outside-in understanding can be developed. The inside-out view sources data from within the boundaries of the organisation and reflects internal views of delivery and pain points for customers. The outside-in view sources data on customers' actual experiences within and across channels and the benefits the brand delivers for them. The resulting insights can explain where a business is value advantaged or disadvantaged in your customers' eyes. These reveal opportunities to improve the company's market positioning, design their brand, operating model and culture to deliver a superior customer experience. 

3) Customers dictate success

Today's consumers hold unprecedented power. Through digital devices they have ease of choice and rapid communication. A few quick taps on a screen provides access to information about where to purchase; product and service reviews; comparisons for prices and terms; and the ability to purchase.

Progressive business are capitalising on this by redesigning their products, customer touch-point and purchase channels to engage and empower customers.

BizCover, a leader in business insurance comparisons and quotes for professional indemnity and small business coverage, has designed a dead-easy online purchase process which can be completed in a matter of minutes. Customers get simple explanations about products they are considering and clear comparisons between policies. To purchase, all required declarations by the insurer are obtained and legally approved by the customer online, making the purchase step as easy as providing credit card details. As soon as a policy is purchased it comes into effect and a Certificate of Currency is issued by email. At any time a customer needs support or expert advice, contact centre staff are on stand-by to dial into an online session or call the customer if requested. Throughout privacy is preserved and information about the customer is available to agents only to assist them to resolve queries promptly and close the sale. 

The Iconic provides a different example of an outstanding customer experience. As one of Australia's largest online fashion retailers, it makes purchasing apparel online easy and safe. Their terms provide product delivery in Sydney and Melbourne metro areas within three hours of purchase, free delivery for purchases over $50, and free product returns for up to 100 days. These overcome customers’ hesitations about online clothes shopping, making The Iconic one of several online retailers who are redefining the frontiers of competition in the retail sector.

Another factor in how customers define success is how quickly social media impacts. It can amplify customer feedback, and accelerate and intensify reactions to products and services and is now integral to how brand reputations form.   Consider the small local business, a popular Chinese restaurant with an established reputation for authentic yum cha that drew queues willing to wait 60 minutes for seating. After a food poisoning incident was linked to the restaurant, social media surfaced a string of unreported incidents of food hygiene failure. Within weeks, the queues disappeared and the business

Marketing thought leaders promote a notion of modern brand management as steering an evolving conversation with customers. This makes sense given customer goodwill and loyalty are on continuous public display courtesy of Google search ratings, Facebook 'likes', and comments posted on numerous other sites.

Again, innovative companies are capitalising on the possibilities social media offers their business models. The disruptor Uber incorporates it to maintain high service standards crucial in its offer. Using software and devices, Uber lets customers and drivers arrange and pay for rides. After a ride, both the customer and driver must rate their experience which becomes publicly linked to both individuals' Uber profiles. If you want to get rides, you need a good profile rating, so Uber has used social media in its business model to maintain standards of service and patronage.

Many businesses do not have the luxury of being a new entrant with a killer business model. Many have established legacy offers with dated systems and assets that remain integral to their operations. More and more of these businesses are realising a deeper reality, the experiences they are delivering customers are dropping below par.

Sizing the opportunity

Businesses solve problems for their customers for a price. Customers accept to pay that price to the extent the solution is valuable to them.

It turns out, many traditional solutions around which businesses are built underserve customers by:

• Not addressing their problems adequately or thoroughly
• Addressing their problems, yet creating or exacerbating others in the process
• Solving their problems, but at a great expense, forcing unreasonably high prices.

The laws of economics tell us to expect business to switch in favour of companies that offer customers greater benefits for an equivalent price. This means, wherever customer experience gaps exist, opportunities to create value can be exploited by successfully closing the gaps. The value created will be commensurate with the significance of the gap to the customer and the extent of improvement.

Words of caution

The same way businesses can under-service customers, they can over-service them. In these cases, customers enjoy heightened benefits for value delivered by the business, for which it receives no economic reward. A costly formula. 

Consider the example of a label printing plant for perishable foods products. After years of outstanding service, its major customers learned to raise orders at the last minute to provide themselves flexibility and lower stock levels. Analysis revealed these customers were frequently late placing orders and paid no extra, something many in the company were extremely proud of. 

Analysis also revealed the actual disruption caused to internal operations from regularly reordering the printing schedule to manufacture and deliver large orders in reduced time was creating efficiency losses and dissatisfied tier two customers whose work was bumped and delivered late. In the end, the true hidden cost of ‘rushed jobs’ proved unsustainable and illustrates how companies can fall into a trap of over-servicing customer segments.

In Summary

A strategy of customer-centred business design must create value, and it must be definitive about this. When deciding if it is a strategy worth pursuing, begin with a deep appreciation of your market position, basis of competition, and industry. Some businesses and industries have more to gain than others, so doing your homework is advisable so expectations are clear.

Ultimately, like any well-crafted strategy, effectively executing customer-centred business design can yield strong and sustainable returns. To tip the odds in your favour, craft your strategy to target opportunities your customers will recognise and reward you for.

The views expressed in this article are the views of the author. This article provides general information, does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information.