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……..best 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?

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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 – Penetration – Understanding Customer Value – Part 14a 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 – Understanding Customer Value

  • Definitions of how customer value is calculated have been agreed and implemented for the current, to-date & future/lifetime value levels. Proxies have been developed where real data is not available.
  • Analysis has been carried out of value distribution across the customer base and there is clarity about what each of the main value drivers are (e.g. acquisition rate, attrition rate, product holding, market cost etc.).
  • The development of value (upwards and downwards) over time at the absolute level and at the share-of-spend level is understood for different types of customers.
  • Opportunities to develop customer value are identified based on analysis of current purchase patterns, predictive modelling and any other identifiable indicators.
  • Staff are clear on how much value varies between customers and the critical importance of taking special care of the most valuable.

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 – Acquisition – Setting Up & Activating – Part 13e 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 Acquisition 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 Acquisition dimension focuses on the specific, practical activities that will support you to increase both the quality and volume of new customers. Acquisition explores ways in which you can increase the size of your customer universe and your share of it. The 5 sub-components of the Acquisition dimension are ‘Understanding Acquisition,’  ‘Identifying New Prospects,’ ‘Managing Interest,’ ‘Converting Sales,’ and ‘Setting up & Activating.’  Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Acquisition

“A customer-centric Acquisition approach begins with a clear and intimate understanding of your customer universe and the factors that impact your ability to sell to them. Acquiring your share of this customer universe is achieved through appropriate targeted marketing activity across a broad range of relevant channels and media, and interest generated is managed effectively so that prospects are kept warm until the sale is closed. While the sales process itself should focus on closing the sale, it should also take into account effective lead management, specific sales targets and rewards and careful controls over pricing. Customer-centricity also recognises that new clients have not been secured until you have taken them through an experience-based initiation process, where they are made to feel welcome and are well informed.”

What Good Looks Like – Setting Up & Activating

  • The new customer set-up process is specifically engineered to be a great first experience with organisation. The welcoming activity that follows happens quickly and in a way that is appropriate to the new customer’s potential value and any history with the organisation.
  • Clear definitions are in place to define when customers have settled into an active relationship with the organisation. Very regular reporting identifies those who have not done so and pre-planned activity is undertaken to address these customers.
  • The duration and nature of new customers’ “early experience phase” is understood and for appropriate customers is addressed with an appropriate ‘nursery’ programme to care-take them through. A specific new customer segment (or set of segments) ensures they are treated correctly and at sensible cost until they can be allocated to a more meaningful in-life segment.

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 – Acquisition – Converting Sales – Part 13d 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 Acquisition 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 Acquisition dimension focuses on the specific, practical activities that will support you to increase both the quality and volume of new customers. Acquisition explores ways in which you can increase the size of your customer universe and your share of it. The 5 sub-components of the Acquisition dimension are ‘Understanding Acquisition,’  ‘Identifying New Prospects,’ ‘Managing Interest,’ ‘Converting Sales,’ and ‘Setting up & Activating.’  Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Acquisition

“A customer-centric Acquisition approach begins with a clear and intimate understanding of your customer universe and the factors that impact your ability to sell to them. Acquiring your share of this customer universe is achieved through appropriate targeted marketing activity across a broad range of relevant channels and media, and interest generated is managed effectively so that prospects are kept warm until the sale is closed. While the sales process itself should focus on closing the sale, it should also take into account effective lead management, specific sales targets and rewards and careful controls over pricing. Customer-centricity also recognises that new clients have not been secured until you have taken them through an experience-based initiation process, where they are made to feel welcome and are well informed.”

What Good Looks Like – Converting Sales

  • Sales targets and rewards are ‘scientific’, recognise differences between the types of customers (brand-new, won-back, re-purchasing) converted and drive the most appropriate behaviours in the sales channels.
  • Sales Leads are distributed, followed up, monitored and reported on in a way that balances the best experience for the customer with the most beneficial result for the organisation, irrespective of where the lead was generated or the channel through which it was received.
  • Pricing is actively used as part of the acquisition mix, but this is done on an analytical and controlled basis to prevent profit being given away that cannot be recovered later.
  • Sales processes and support mechanisms are focused on supporting the ‘close’, sharing in the customer’s excitement and finally celebrating the sales success.
  • As much as possible is done to prevent even starting on selling activity with potentially ‘bad’ customers and this can be effectively stopped where necessary.

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 – Acquisition – Managing Interest – Part 13c 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 Acquisition 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 Acquisition dimension focuses on the specific, practical activities that will support you to increase both the quality and volume of new customers. Acquisition explores ways in which you can increase the size of your customer universe and your share of it. The 5 sub-components of the Acquisition dimension are ‘Understanding Acquisition,’  ‘Identifying New Prospects,’ ‘Managing Interest,’ ‘Converting Sales,’ and ‘Setting up & Activating.’  Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Acquisition

“A customer-centric Acquisition approach begins with a clear and intimate understanding of your customer universe and the factors that impact your ability to sell to them. Acquiring your share of this customer universe is achieved through appropriate targeted marketing activity across a broad range of relevant channels and media, and interest generated is managed effectively so that prospects are kept warm until the sale is closed. While the sales process itself should focus on closing the sale, it should also take into account effective lead management, specific sales targets and rewards and careful controls over pricing. Customer-centricity also recognises that new clients have not been secured until you have taken them through an experience-based initiation process, where they are made to feel welcome and are well informed.”

What Good Looks Like – Managing Interest

  • Individual potential customers are encouraged to engage with the organisation as early as possible in their purchase process and can do so at a depth with which they feel comfortable, with increasing engagement as they get closer to purchase.
  • Formalised and informal communities of interest that develop between customers and prospects are identified and engaged on a facilitative basis to encourage members to become interested in the organisation’s offerings.
  • Definitions and mechanisms are in place to enable ‘interest in becoming a customer’ to be detected in both on-line and off-line behaviour even if the customer is not making a sales enquiry.
  • Sales enquiries are received by the media that prospective customers want to use, in a way that is consistent across channels, captures the right (low) level of information and ensures the appropriate level of follow-up activity.
  • Mechanisms are in place to ensure that customer interest is retained and built upon throughout the period before a ‘cool’ potential customer warrants specific sales effort.

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