In a special Business Surgery, Carol-Ann Morgan discusses why Greg Smiths letter published in the New York Times (“Why I Am Leaving Goldman Sachs” – NY Times – 14.3.12 ) should serve as a warning shot across the boughs for any company which considers its customers or clients only in revenue generation terms.
I hope this can be a wake-up call to the board of directors. Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist”
A simple fact that is easy to forget amid the pressures of business success; but forget this at your peril.
Some key facts which provide ample justification for a customer centric business approach:
- Two thirds of customers say a positive customer experience caused them to spend more
- 8 out of 10 customers would pay up to 25% more for a superior customer service
- Three quarters of those who switch suppliers/brands relate this to a poor customer experience and service
- More than half of those who recommend a company, make this based on the customer experience rather than other factors such as price or product
- Almost all of those who have had a bad customer experience tell others about it; mainly to warn them off or stop them buying from the supplier
Customer centricity tends to fall in and out of fashion, but it is now most definitely “in”. Customer Experience Management is, in fact, the new buzz phrase. Savvy companies are delving further into the customer experience; placing it at the heart of all they do. With this there has been a flourish of tools, techniques, processes and people who are there to offer their services.
Bernd Schmitt’s book “Customer Experience Management: A Revolutionary Approach to Connecting with your Customers” makes a very interesting read indeed, from the perspective of a professional and as a customer myself. The stages he takes you through cause you to examine your own customer experiences from the on-going relationships, eg with banks and utility companies to the regular, occasional or “one off” retail experiences with the likes of Tesco, John Lewis and Hobbs.
Schmitt, essentially advocates a paradigm shift from the traditional functional – transactional approaches to marketing (citing Kotler’s work), towards one which takes account of the “experience” of being a customer, from cradle to grave (however long that might be). He argues a need to take the customer seriously; to recognise customers as assets of a business, without whom the company would not exist and worthy of boardroom consideration and respect.
His model advocates putting the customer at the heart of everything the organisation does; strategically managing a customer’s entire experience with a product or company. He suggests that in doing so, this will involve becoming more process, rather than outcome, oriented; a shift towards building relationships rather than focusing only on recording transactions, and establishing ways in which the company can connect with the customer at every touch point. Inevitably, this comes from the top. It requires a cultural shift and a close examination and analysis of everything which impacts on the customer experience.
Schmitt’s 5 steps towards Customer Experience Management:
Greg Smith states clearly the linkage between the values of the firm, where it positions the customer and the degree of engagement he feels with it.
“Culture was always a vital part of Goldman Sachs’s success. … I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work”
Companies embarking on a journey of Customer Experience Management need to understand that it has to be a cultural shift across the organisation. It needs to be led by example, from the top, engaging employees in the movement to place the customer at the heart of how the company goes about its business.
Experience Based Differentiation (EBD) cannot be mastered overnight. It is a multiyear journey, involving all departments (including HR), requiring an “obsession” with customers, reinforcement of the brand at every customer interaction and a group effort to deliver outstanding customer experiences by treating this as competence rather than a function, celebrating and sharing rewards for this with the employees.