Customer Strategy Infographic

It goes without saying that if your organisation pledges to become more customer-centric, you need to innovate your business model through a customer-centric lens. Customer-Centricity is all about the organisations ‘way of work’ or the ‘business system’ that enables the business to design and to deliver a unique, distinctive and consistent customer experience in order to Acquire, Retain and Develop targeted customer Efficiently. An organisation seeking to develop customer-centric capabilities must be willing and able to change its organisation structure, its measures and its employee and distribution incentives to focus on long term business success.

The design of a customer-centric strategy requires an organisation to deeply understand its current customer-centric capability (its departure point on the transformational journey), the nature of customer-centricity to which it aspires, the action and implementation priorities to bridge the gap between the current and the ‘to be’ state as well as the business benefit (financial uplift) derived from this improved level of customer centric capability.

This infographic helps explain the core components of the transformational journey and the customer-strategy, and is based upon the SCHEMA Customer Management Framework which is the methodology we use to drive customer-centric transformation

Exampleco customer management strategy - REAP


Customer Experience, Systems Thinking, Analytical Thinking & Organisational Design.

To be customer-centric requires business capability to design and to consistently deliver a unique and distinctive customer experience to a selected set of customers in order to acquire, retain and to develop them efficiently.

I was privileged to be taught by the late Dr Russell Ackoff at The Wharton School and he re-enforced my long held belief that one of the major challenges organisations face when trying to transform their business models to become more customer-centric is a lack of systems thinking. Dr Ackoff produced extensive research, insights and knowledge into how systems thinking is the only way to approach organisational development. He explained that many of the challenges we face in trying to understand our organisations such that we can transform them, come from using analytical thinking.

Systems thinking is an approach that views the organisation as a whole (end-to-end) comprised of many parts (functions/silos), yet, at the same time, it is more than the sum of the individual parts. (To deliver a unique and consistent experience requires the organisation to be joined-up – to operate as a single seamless entity.)

Dr Ackoff added that a system is also defined by the function it fulfils in the wider system – this speaks to our organisational role in society and community and embraces the stakeholder universe including, in addition to society,  partners, employees, customers and investors.

Dr Ackoff regularly likened the idea of a system to the human body or to a motor-car. He explained  the 3 principles of the system being defined by the function it fulfils in the wider system (universe) as follows:-

  1. Each part affects the behaviour of the whole. (If the heart and lungs are not functioning correctly then this will affect the well-being of the entire body) – think Leadership Team?
  2. No part has an independent effect on the overall system ( The ability for the muscles to get someone to walk in a straight line will depend on the balance maintained by the inner ear)
  3. The system itself has properties which none of the parts have (If a hand were cut off, the hand would be unable to write. It is the whole system, the whole body, that enables the hand to write)

These principles highlight the challenge many organisations face as they aspire to develop the capability to deliver unique and distinctive experiences. Trying to understand the organisation capability by analysing and restructuring various operating entities in isolation (e.g. let’s optimise the contact centre and make it really efficient.) doesn’t lead to the transformation required. Sadly, in the above-mentioned contact centre example, ‘efficiency’ measures such as average handling time and  # calls answered per day by agent, are the antithesis of customer-centric capability – a customer may want information or may want a problem solved – he/she is not interested in the fact that the agent may have an average handling time target of 2min, 30 seconds, for example.

Taking the analogy further the parts (functions) of the organisation need to mesh together, to be joined up in such a way that they operate seamlessly – to be designed in such a way that they’re supportive of the strategic outcome of the business. The linkages between and across areas of specialisation need to be refined and appropriate for the intended experience. It’s the view and understanding of the whole organisational system as well as an understanding of the universe that allows the organisation to determine where it wants to create it’s ‘high contrast signature experience’ – where it wants to stand head and shoulders above the competition, where it is going to be unique. No business can be the best at absolutely everything.

As per Dr Ackoff, this is akin to taking apart each and every motor car in an attempt, through analysis, to find the best engine, best transmission, best steering, best braking system, best suspension…… everything. Trying to put all of these ‘best’ parts together would result in an absolute mess as nothing would fit. Trying to scrutinise every part of the system and aggregate an understanding of the parts, doesn’t allow an understanding of the whole. Applying the principles of systems thinking allows an understanding of how the pieces/parts fit together.

Your thoughts?

CMO’s Investment Priorities 2014 – I’m shocked

I downloaded an infographic this morning from Customer Management Exchange Group that shows the Top 5 Areas of Investment for Marketing  Leaders  and how investment priorities have changed for strategic marketers over the last 12 months

Marketing_Top 5 Investment Priorities 2014

Basically – I’m shocked!

Allow me to qualify by acknowledging that I don’t have the formal definitions of each of the abovementioned investment  areas (e.g. What makes up Marketing Effectiveness) and, aside from the infographic I haven’t seen any of the underlying research. I am only reacting to the infographic.

As somebody who evangelises a customer-centric business model as one of the only ways of building meaningful competitive advantage for most organisations today, my assessment is that these priorities are a ‘step backwards.’ My comments on a couple of these 2014 investment priorities

Let’s begin at Investment Priority #5 for 2014 – Customer Acquisition. World markets remain under pressure in most geographies. The majority of organisations still generate the bulk of their profits through a product-centric mindset  and we know there are cracks in the product-centri c mindset. Amongst others, commodisation is increasingly common due to technology enablement, product/service life cycles are shorter, customers are smarter, products are available anywhere and everywhere due to globalisation and de-regulation of industries. Customer trust in government and corporate remains low. We all know that it costs more to ‘Acquire’ than it does to ‘Retain.’ Why would investment priorities only highlight 1 of the drivers (Customer Acquisition) of customer value management, the others being Retention, Efficiency (cost-to serve understanding) and Penetration (customer development, x-sell & up-sell)

Maybe, just maybe, Investment Priority #4 for 2014 – Marketing Effectiveness addresses the balance across these 4 drivers of customer value management. Maybe, Marketing Effectiveness implies a focus on Retention, Customer Development and Cost to Serve Efficiency in addition to Customer Acquisition.

I’m astounded that Investment Priority#4 for 2013  – Customer Experience, has dropped off the priority schedule. Is this because organisations are finding it too difficult to enable cross functional capability to design and to deliver a unique, distinctive and consistent customer experience? Is this because executive teams are once again becoming increasingly short term focussed?  There will always be tension between the need to deliver profits ‘tomorrow’ and the need to develop sustainability for 6 months, 1 year, 5 years, 10 years, 20 years ahead. Maybe organisations are feeling that Customer Experience is too complicated and that it’s easier to talk about than to operationalise. Customer Experience requires cross-functional working. It requires the breakdown of silos and a change in the operating model. A customer-centric business model doesn’t change the importance of organisational performance measurement but it does change what, when and how business performance is measured.  Maybe this is why Investment Priority#2 for 2013 –  Marketing Measurement, Accountability & ROI, has also fallen of the 2014 Priority list.

The other notable difference is that Investment Priority#1 for 2013 – Future Thinking, Trend watching and Forecasting appears nowhere in 2014. My concern is that the 2014 Priorities are therefore not indicating any real commitment to business model innovation.

What are your thoughts and observations?