Customers are having a harder time than ever getting service from the companies they do business with, regardless of how much they spend, how long they've been a customer, or how profitable they are for the company.
There is a fever pitch from customers using the power of the Internet to make their pain known. Web sites such as www.ripoffreport.com, www.planetfeedback.com, and www.gethuman.com give customers a place to gripe and navigate their way to companies that can serve them better. And they are doing it actively, loudly, and in great numbers.
Research validates customer pain:
- In "Building and Profiting from Consumer Trust," Datamonitor reports that 86% of 3,200 US and European consumers surveyed say their trust in corporations has declined in the past five years.
- The " Customer Experience Report" conducted by Harris Interactive and RightNow Technologies found that almost every US consumer surveyed (96%) had a negative service experience in the past year, and 80% ceased doing business when the service experience was negative.
- A recent study (Zenith Research) shows that 92% of retail organizations have a customer service rating of 70% or worse.
What we have now is a frenzied awareness of a problem that often leads to an even more frenzied approach to a "solution." Companies lack the motivation, metrics, and mechanics to require them to connect the silos of the organization and deliver a meaningful and beneficial set of products and services to customers.
A Major Reason Customers Have Not Become a True Priority of Most Businesses
The base of power in a company lies in its "Power Core" of founders and executives and its business stronghold in the marketplace. This center of power defines what competencies are built and rewarded in the company.
Most companies have a predominant power core. Frequently, it is the strongest skill set in the company or the most comfortable to senior executives. Because executives know the power core best, people gravitate to perform in that area. Understanding the strength and pull of the power core will help to uncover the hot spots and potholes for driving a customer profitability culture. It will frame the scope of work required to influence change. It will provide clarity on the approach to take in creating partnerships with leaders and in motivating people within the organization through the change process. And it will help to zero in on your company's motivation and ability to drive movement toward customer profitability.
People who lead customer-improvement efforts frequently begin without understanding the impact of the power core's pull for driving the agenda. They don't think it through and begin work on customer issues in earnest, but the effort inevitably hits the brick wall of the power core.
For example, I really had to scratch my head on how to approach driving the customer agenda with some technology-based companies. The greatest challenge was that I just hadn't gotten close enough to the power core to understand the best way to make early inroads. The process stuff—improving broken operational issues, improving the service experiences, and so forth—is where efforts typically gain momentum and establish a track for success within many other industries. But with these particular organizations, the product itself emerged as the power force which the world revolved around: It was all about the software. I learned that lesson well. The customer work gained momentum when the efforts put a laser focus on using customer feedback to improve the product.
The Elephant in the Room
Because executives make decisions through the filter of the power core, people want to perform there: They will be driven to perform where the enthusiasm is the highest, the understanding is the easiest, and the rewards are the greatest.
As a soldier inside the corporate machine, which would you choose? Would you focus on something people talk about in high-level terms but which has no day-to-day accountability or compensation tied to it (the customer thing)? Or would you excel at your quarterly sales goals that you receive urgent email messages on, receive quarterly incentives for achieving, and for which stack ranking lists are posted comparing you to your peers?
The end game is to incorporate the drive for managing customer relationships and profitability into the power core. Because these goals and actions remain elusive, they're simply not called for with the same level of gusto. In many cases, they're not called for at all.
Especially where there's success at pumping out sales, saturating the marketplace, and achieving growth, or the product demands continued updates and captive customer loyalty, it is difficult to take the time out to do what people consider the slow work of process: connecting the efforts across the organization and even counting the number and value of customers who go in and out your doors. The customer agenda always seems to be something to layer on top of the "real work" rather than being part of the work itself. It's often seen as the competition.
The Six Predominant Power Cores
There are six common power cores that have an impact how things go inside the corporate structure. You'll likely find one of them to be the dominant factor in decision making and direction in your company. You may also see another in a supporting, second place of strength. Here are the six power cores that I've found to have the greatest impact on driving customer profitability inside the corporate machine and across the silos:
- Product power core. Resources and success metrics center on product development, not necessarily on customer focus.
- Sales power core. Quarterly targets and sales goals pull the weight in the company. The sale is the focus, sometimes at the expense of the rest of the experience.
- Marketing power core. The marketing department defines the tenor and tone of the relationship with customers.
- Vertical business power core. Execution in the vertical business (e.g., publishing, pharmaceutical, insurance, telecoms, etc.) is how success is defined and measured and forms the core of power.
- IT power core. IT projects have an inordinate amount of impact. They receive high levels of funding and a strong voice in defining company priorities.
- Customer power core. Company decisions come from understanding what will drive greatest value to customers in the short and long term.
Power Core Strength and Distance From the Customer
A set of competencies exists in organizations that have learned to develop and deliver customer experiences across the silos. These customer focus competencies, shown below, form a chain of actions required to manage the handoffs of the customer experience across the enterprise. They need to become second nature to organizations that want to become proficient at managing customer relationships and customer profitability.
Each power core naturally develops certain skills and pays less attention to others, so the power core will have an impact on how easily these cross-company customer competencies can be developed and integrated. How swiftly an organization can integrate them correlates to how closely aligned they are to the reinforced power core skills.
The distance between where you are now and when you get to wiring in customer focus competencies will depend on how natural this work is to those who drive the power core. The power core of your company will likely make some of these competencies easier to develop than others. Some will seem nearly impossible; it may be that the inclination to work this way just doesn't exist naturally. That's why it's critical to figure out how strong the power core is in possessing or advocating the customer focus skills sets. You need to know how interested they are in coming to the customer party.
Ask these questions to begin to zero in on knowing what your power core is, how natural the customer competencies reside within the power core, and the scale of challenge ahead of you for driving customer focus and profitability:
- Where do you drop the ball repeatedly with customers?
- Where are you vulnerable because of your focus on other things?
- Which competencies are considered "optional" or up to the individual zealots to nurture and push in the organization?
Once you begin to understand the true priorities of your organization because of the pull of your company power core—you can finally determine the best path to follow to weave in the customer... at long last based on the reality of the beat of your corporate drum.
I have learned that optimizing the strength of the power core and the differentiating value it brings to customers is the solution. The company has got to sign on to weave the customer perspective and experience into the operation of the power core.
Changing the power core is not the answer. It's this: Know what the power core is. Know who drives the power core, and know how to make a compelling partnership with the power core to integrate customer profitability efforts into the day-to-day activities that now define success for the business. That's where you get real traction.
Excerpted from Chief Customer Officer: Getting Past Lip Service to Passionate Action, by permission of the publisher, John Wiley & Sons, Inc.
