Customer-Centric Transformation a no-brainer: Check out why!


I’m guilty! I admit that I’m a customer-centric evangelist because quite frankly, how else can you build meaningful competitive advantage? Customer-centricity is all about differentiation and it’s almost impossible to sustain differentiation around product, price and distribution footprint. But you can sustain differentiation around your customer knowledge, insights and understanding.

Here are 3 questions designed to get you thinking a little differently about the criticality of developing customer-centric capability within your organisation. These ideas are attributed to Don Peppers & Martha Rogers of Peppers & Rogers Group, whom I worked with very briefly around 11 years ago.

1)      Who is the one stakeholder, whom if you maximised the return thereof, would benefit ALL stakeholders?  So think about this – there are generally 5 major stakeholders in businesses today – society, partners, investors, customers and employees. Maximising the return for the investor is not necessarily good for the customer! Maximising the return for the employees doesn’t mean ALL other stakeholders will benefit. Maximising the return for the Customer, on the other hand, certainly does benefit all other stakeholders. This is why the principles of customer-centricity are so important. If an organisation is unable to propagate a supply-demand chain then they are unable to supports investors and all other stakeholders.

2)      Would you agree that customers create 100% of business value in almost all cases? Customers create value for businesses every quarter by purchasing products and services. They also create value in another way which is referred to as lifetime value (LTV). LTV is based upon their intention to continue doing business with, and paying money to the organisation. That LTV goes up and down in value, as does a stock/share portfolio. Any reduction, or potential reduction, in that value (brought about possibly through a poor engagement or experience) is bad news for the organisation. This level of understanding and insight of that value change is generally not available within organisations so this reduction in value is not reported to shareholders , albeit that it is akin to the company reporting lower earnings which in almost all cases results in company stock/shares losing value. My friends at Peppers & Rogers have a metric for this which they refer to as ‘Return on Customer’ and this metric is designed to capture both types of value created (actual and LTV) to balance the short term/long term impact of customer value. ROC = (Profit made on customer today + change in LTV)/Initial/beginning LTV.

3)      What do shareholders & investors really want? Most shareholders and investors want confidence that leadership is able to grow a company organically. That means that the organisation will have developed capabilities to Acquire customers, to Retain them and keep them buying from the business, to grow them and to get them to buy more from the business. They’d also want confidence that leadership is able to guide investment and understand the cost-to-serve different customer cohorts/segments to best manage financial return. If the business can demonstrate these capabilities then they are providing REAL value to customers which means they’re providing real value to shareholders/investors at the same time

Customers are a scarce asset. They are valuable and unique. They are measurable. They are the biggest limitation to growth and to understand this will impact the decisions we make.

So…………within your organisations, if customers are the most important asset in your business, who is managing them as such. What operational framework/ architecture/ business model are you using to optimise that asset? Who is tracking the value of the customer today and the value of the customer tomorrow? What does your customer dashboard look like?

Comments?

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Customer-Centric Transformation: What Good Looks Like – Penetration – Managing High Value Customers – Part 14c of 14c


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

The REAP Customer-Centric Organisation Blueprint®

REAP CCOB for Blog

This week  we are dealing with Penetration which is one of the four Execution capability areas represented. The Execution layer relates to the capabilities and control levers needed to optimise customer value and includes Retention, Efficiency (understanding cost to serve), Acquisition and Penetration (customer development, cross-sell and up-sell) – collectively referred to as REAP. These are capabilities and initiatives that can be optimised in the short term.

These capabilities support your ability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) as well as the Enabling capabilities already discussed in Part 1 to 10 of this series of blog posts.

Each of the four Execution capability areas is made up of sub-components. The Penetration dimension relates to the ability to develop more value from existing customers through cross-sell and up-sell activities to improve return on customer investment. Formal management of high value customers and key accounts is a critical part of this. It also requires clarity as to how you deal with low value customers from a development perspective, if at all. The 3 sub-components of the Penetration dimension are ‘Understanding Customer Value,’  ‘Increasing Customer Value,’ and ‘Managing High Value Customers.’ Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Penetration

“Delivering sustainable and superior business performance requires the on-going development and growth in the value of your customer base. To do this you need to have an in-depth understanding of your customer value so that you can identify opportunities to increase this value. This potential uplift is then supported through relevant propositions, cross-selling, up-selling, indirect value creation and expansion of existing product usage. In treating different customers differently, high value customers should also be given special attention so that the right team equipped with the necessary budget can deliver on their specific needs.”

What Good Looks Like – Managing High Value Customers

  • Current and potentially high value customers are identified and managed as a specific category with additional resources and budget, even if there is no formal concept of key accounts, or they do not fall into the definition of key accounts.
  • Planning for customers that do classify as formal key accounts is a meaningful exercise that drives resource allocation, customer activity and relationship development rather than just setting targets and budgets. It involves a wider range of internal stakeholders for each account and is at least transparent to the customer if it does not actively involve them.
  • Key accounts are managed at a deeper and more pro-active level than other customers with regular reviews of the relationship as well as progress against the plan. Opportunities for meaningful collaboration on a shared-risk basis are actively sought.

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y

Customer-Centric Transformation: What Good Looks Like – Penetration – Increasing Customer Value – Part 14b of 14c


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

The REAP Customer-Centric Organisation Blueprint®

REAP CCOB for Blog

 

 

 

 

 

 

 

This week we are dealing with Penetration which is one of the four Execution capability areas represented. The Execution layer relates to the capabilities and control levers needed to optimise customer value and includes Retention, Efficiency (understanding cost to serve), Acquisition and Penetration (customer development, cross-sell and up-sell) – collectively referred to as REAP. These are capabilities and initiatives that can be optimised in the short term.

These capabilities support your ability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) as well as the Enabling capabilities already discussed in Part 1 to 10 of this series of blog posts.

Each of the four Execution capability areas is made up of sub-components. The Penetration dimension relates to the ability to develop more value from existing customers through cross-sell and up-sell activities to improve return on customer investment. Formal management of high value customers and key accounts is a critical part of this. It also requires clarity as to how you deal with low value customers from a development perspective, if at all. The 3 sub-components of the Penetration dimension are ‘Understanding Customer Value,’  ‘Increasing Customer Value,’ and ‘Managing High Value Customers.’ Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Penetration

“Delivering sustainable and superior business performance requires the on-going development and growth in the value of your customer base. To do this you need to have an in-depth understanding of your customer value so that you can identify opportunities to increase this value. This potential uplift is then supported through relevant propositions, cross-selling, up-selling, indirect value creation and expansion of existing product usage. In treating different customers differently, high value customers should also be given special attention so that the right team equipped with the necessary budget can deliver on their specific needs.”

What Good Looks Like – Increasing Customer Value

  • Value development is managed as a business discipline (like acquisition or retention) with: clear ownership / responsibility; detailed planning; specific propositions; checks that it is generating incremental value.
  • Active stimulation mechanisms are in place to increase usage / value / frequency of purchasing the organisations’ core products.
  • Opportunities to sell ‘up’ to a higher level of value are sought and supported by appropriate offers, especially at point of sale.
  • Cross-selling is driven through both outbound and inbound channels, based on clear rules-of-engagement and prompts to ensure appropriate offers are made from the organisation’s whole portfolio.
  • Low value customers are identified against clear definitions and specifically dealt with so as to drive up their value or at least prevent it being made worse.
  • The valuation of customers and stimulation of this value extends beyond pure transaction value, into areas such as advocacy and referral.

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y

Customer-Centric Transformation: What Good Looks Like – Agility and Workflow – Part 9 of 14


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.
Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.
The REAP Customer-Centric Organisation Blueprint®
REAP CCOB for Blog

 

 

 

 

 

 

 

 

 

 

This week we are dealing with Agility & Workflow which is one of the six Enabling capability areas represented. The Enablers explore the components needed to energise your transformation and will invariably involve changes that can be planned for within the current business cycle, for implementation in the next budgetary or operating period. These components support your capability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) already discussed in Part 1 to 4 of this series of blog posts.
Transformation Intent – Agility and Workflow
“The ability to deliver a customer-centric experience is dependent on the speed at which your organisation can mobilise itself so that you can meet the changing needs of your customers and act on new opportunities as soon as they arise. In order to do this you need an agile decision-making infrastructure that is supported by efficient and technology-enabled processes that integrate teams and deliver on the opportunities for real-time responses.”

What Good Looks Like – Agility and Workflow
• The organisation is set up to take customer insight and feedback through to new or amended processes / propositions quickly and is checking that customers perceive this agility.

• Processes are actively managed to ensure the right people receive the right prompts and information at the right time and are able to action it within defined timelines.

• The opportunities and customer need for real-time working are understood and the relevant data is available to enable clear movement towards this in the most important areas.

• Collaboration between customer-impacting colleagues is encouraged and enabled by relevant technology on an overall basis as well as being targeted at specific areas of need.

• Centres of Excellence are used to formerly incubate and develop good practices in one part of the organisation in a way that is specifically designed to support ‘packaged’ transfer of learning across the enterprise.

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y

Customer-Centric Transformation: What Good Looks Like – Experience Management – Part 8 of 14


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.
Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.
The REAP Customer-Centric Organisation Blueprint®
REAP CCOB for Blog

This week we are dealing with Experience Management which is one of the six Enabling capability areas represented. The Enablers explore the components needed to energise your transformation and will invariably involve changes that can be planned for within the current business cycle, for implementation in the next budgetary or operating period. These components support your capability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) already discussed in Part 1 to 4 of this series of blog posts.

Transformation Intent – Experience Management

“Achieving excellence in customer experience is about finding ways to create products, services and experiences that positively and profitably influence what people think, feel and do. This calls for the ability to design and deliver innovative, differentiated, economic and relevant customer experiences across every channel and touch point ensuring that both physical and emotional elements are addressed. ”

What Good Looks Like – Experience Management

• Appropriate (i.e. not too much) quantitative and qualitative research is carried out into customer satisfaction in a format that aims to be predictive of future loyalty and to take customer expectation levels into account.

• On-line and off-line mechanisms are in place to ensure that a wide range of staff (junior to senior) listen to customers as well as those whose job it is to do so. Processes ensure that the organisation reacts to what is being said without over-reacting to potential ‘noise’.

• Based on these insights the customer experience is designed, engineered, documented and adjusted by expert resources with a focus on the customers’ emotional needs as well as functional requirements.

• Clearly different experiences can be delivered to different values of customer without causing undue dissatisfaction of lower value customers.

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y

Flashes of Thought: Building & Leading Customer-Centric Enterprise


Transforming business is disruptive. The big challenge for any organisation is to keep the business going – to drive small incremental changes whilst acknowledging and understanding the ultimate disruptive outcome of finding new and unique ways to create, deliver and capture value. If the enterprise is disciplined in its approach, i.e. it builds a deep understanding of its current level of customer-centric capability and is clear about the nature of customer-centricity to which it aspires to in three or four years time, then the transformational programme can be prioritized accordingly.

Here are 9 ‘flashes of thought’ from my book – The Customer Centric Blueprint

*As part of the rapid transformation that our world is going through, your customers are becoming more powerful and demanding. Adopting a customer-centric business model is a way to ensure a competitive edge.

*“One of the most important questions of our current time is: ‘How do we stay relevant in this uncertain and changing world?’”
The cornerstone of the customer-centric business model is the concept of the “outside-in” company, one that views the world through the lens of the customer and then is able to effectively interact with the customer to meet his or her needs.

*From a systems-thinking perspective, it is important to utilize customer management in a way that develops “interconnectivity across all the areas of the business that touch upon and affect the customer.”

*“The customer-centric approach to measurement would not be complete without connecting those specific operational measures to employee engagement which, in turn, creates customer engagement and ultimately profitability through your key value drivers.”
Earned media measures – likes, comments, and shares – should be measured so you are able to understand where customers are amplifying your brand message.

*“While impressions are directly linked to the efforts you have made to put content in front of people, expressions are a much more powerful measurement of the extent of your customer engagement.”

*Customer-centricity as a business model means finding new ways to create, deliver, and capture value.
Implementing a customer-centric approach is a journey with a starting point, but no clear ending; the model will grow along with your company’s understanding and evolution.

The Customer-Centric Blueprint

Customer-Centric Transformation: What Good Looks Like – Channels and Media – Part 7 of 14


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

The REAP Customer-Centric Organisation Blueprint®

 

 

REAP CCOB for Blog

This week we are dealing with Channels & Media which is one of the six Enabling capability areas represented. The Enablers explore the components needed to energise your transformation and will invariably involve changes that can be planned for within the current business cycle, for implementation in the next budgetary or operating period. These components support your capability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) already discussed in Part 1 to 4 of this series of blog posts.

Transformation Intent – Channels and Media

“Channels are critical vehicles through which you deliver a superior, consistent and relevant customer experience. In order to do so effectively, your channels and the media you use to transmit your message both need to be integrated and individually optimised to manage this consistency and deliver an appropriate return on investment from a customer value perspective. Your organisation also needs to be dynamic and strategic in how you leverage the new forms of media and digital channels.”

What Good Looks Like – Channels and Media

  • Organisational structures and roles explicitly facilitate cross-channel  management as well as ‘within channel’. There is a clear overall channel strategy covering ‘earned’ (social) channels as well as formal ‘owned’ and ‘paid’ channels.
  •  Channels and media are individually optimized using appropriate techniques and technology. The balance between media/channels is also optimised, recognising both customer needs and internal / profitability requirements.
  •  Prospects and customers are managed across and between channels with a clear focus on getting customers and serious prospects into owned channels. However, the relevance and value of earned digital and social media is fully understood and they are actively used within the channel mix.
  •  There is a clear focus and ‘production engine’ for engaging and interesting content that can be used across multiple channels and released virally.

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y