In many companies, customer-centric change starts as a moral debate.
"Customer-centricity will be good for us", someone says. "Customers should be at the heart of everything we do" a PowerPoint or off-site speech echoes.
But while these statements get encouraging nods from colleagues, CEO’s and even boards, they usually don’t drive sustainable change. Sure, people pay attention to arguments that "It’s the customers who pay the salaries" and "They will judge us in the court of social media". But this attention is transient and often only results in short-term initiatives. In the long run nothing seems to change.
Making a customer’s life easy and agreeable sounds admirable, but what often rings louder are the implications of added costs, complexity, and the headache that comes from organisational change. This leaves the business virtually unchanged and the customer advocates deflated.
Anyone who wants to truly make his business customer-centric needs to realise this harsh reality. Great intentions and enthusiasm are crucial traits in any customer advocate. But the traditional customer rhetoric is inadequate for the financial reality of a boardroom.
Just think of the following scenario:
Imagine you’re the dedicated CEO of a medium-sized or larger company. Like any good leader, you understand the value of a balanced approach. You know that your customers are important. But you also know that you need to weigh their needs against those of your shareholders, your people, and the many KPI’s in your business. In short, you know that to succeed, you need to make the most of the limited resources you have available.
Now imagine further that you have € 1,000,000 to invest. Two proposals come to the table. As each would require the entire available budget, you must choose. The first proposal is for a new piece of machinery, which reduces the manual labour component in your production and would allow your factory to make demonstrable efficiency gains in excess of € 2,000,000 in the next 12 months. The second is a customer project, which will demonstrably increase the happiness of your already quite satisfied customer base.
Even if you’re the most hard-core customer advocate, you will need to acknowledge the dilemma. In your gut you know that customer satisfaction is important. But it’s also hard to pass up the opportunity of triple-digit ROI. Particularly if the customer satisfaction initiative is hard to quantify in a business context which only really listens to euros and cents.
By now, I must have presented this dilemma to at least 2,000 executives. Without exception, every single one ended up choosing the savings programme. Admitted, many did so reluctantly and in the knowledge that they couldn't be sure they were making the right choice. But in the absence of financial data which allows comparing the proposed customer initiative’s ROI with the savings programme, the latter always wins. After all, it’s measurable, it fits accepted wisdom and it sounds great in the boardroom.
So, if you want to convince your business to become more customer-centric, the conclusion is simple. Unless your company already has customer obsession baked into its DNA, any significant customer-centricity initiative needs to be backed by a business case that Shows the Money. It needs spreadsheets with customer values and ROI projections. Templates outlining costs and revenues.
Without these, you may still get sympathy, but in the end won’t get the resources, attention and executive support that are needed to implement your views.
Which - harshly put - means it’s more economical for the business not to bother.
If you would like to know more about the topic of customer-centricity get in touch, check out my book "So You Want To Be Customer-Centric?" in your favourite online bookstore or join the LinkedIn group by the same name.
Image (c) Ilya Genkin