Customer-First Conversations

The "Customer-First" Org Model - Part III (Final)

[fa icon="calendar'] Sun, Dec 11, 2011 / by David Dallaire

This is Part III of a three-part series on the "Customer First" Org Model - a model for organizing business around the customer to improve revenues, and customer and employee loyalty through a more customer-centric culture (See Part I and Part II).

After spending the last two weeks talking about the concept of actually organizing your business around the customer and mapping out an org model that increases your chance of success, this week we'll get right into some real-life examples of companies demonstrating the four elements that make customer-centricity part of your culture and take the work out of it:

1. Serve Your Real Customerknow if you customer is external or internal, and start thinking about “serving” as “customers” those who report to you too.  A great example of this is Starbucks. While we may all see ourselves as the customer of Starbucks (because we so often are), in reality, you and I are the customer of the store Barista and their support team. As far as Starbucks HQ is concerned - who is THEIR primary customer? Well, at a lunch presentation I attended in Seattle earlier this year, CEO Howard Schultz made it very clear that as part of his effort to revitalize the culture, he made it very clear that their primary customer is - the Barista! Surprised? This makes perfect sense and follows exactly the inverted pyramid model that calls for seeing your subordinates as your customer. Your job is to support them and make sure they have the resources they need to do what they know is best for their customers too.

2. Invert the Risk FactorsTry to achieve a “zero-risk” perception of your Brand for your external customers, and make the ownership risk higher as you move away from the external customer. i.e. Executives own much more of the risk than front-line staff engaging customers.  The easiest place to start when thinking about risk is with your end-customer. Getting a new customer to try your product is always a risk-taking adventure no matter what you are selling, because it means NOT using the product they already have or know well. While Zappos has garnered all kinds of love and attention (and deservedly so) for upping the ante on the traditional guarantee by offering to pay for return shipping (really, how much easier can you make it?), there are other Brands out there you might be surprised to see starting to transform their service policies in an effort to overcome perceptions of being poor servants to the customer. Would you believe it if I said "Comcast"? Seriously, they mean it and it shows how a big brand can get religion, even in the middle of a long, profitable life (See their videos here).  One more great example about reducing risk for your employees comes from Jim Koch, founder of Boston Beer Co. (Yes, the maker of  "Samuel Adams Boston Lager") Read his philosophy on how to treat your people, and how "taking out the fear" is a perfect example of "risk inversion".

3. Remember Who Owns Your BrandBrand ownership starts with your external customers. Acknowledging this and practicing it is the key to creating an ownership culture among your employees.  There are no better examples of this than the perfect one served up by Netflix earlier this year. Their dual stomach-punch announcements that they would 1) raise prices and 2) split the service into two that need to be managed separately by customers was one of the dumber things we've seen from a dominant Brand in many, many years. While a few pundits have tried to show superior hindsight by justifying it on a "Shareholder Value" perspective, they are just demonstrating the traditional group-think approach that has been failing customers for over three decades. Netflix demonstrated ignorance of not only the "Brand Ownership" element but the "Risk Inversion" element as well, as their plan, if they had gone through with it, would have increased the perceived risk for the customer for the sole purpose of serving the Shareholders. Just another old-fashioned corporate wolf in customer-centric sheepwear. How do you think it feels now to be a customer service agent at Netflix?

4. Evolve from “Owner” to “Mentor” – hardest element to adopt for the micro-manager, but critical to making the model work. Rather than conditioning everyone to expect your involvement in every decision, delegate both responsibility and authority in equal amounts and invest your time in mentoring your teams on the culture you are trying to build.  This is all about culture, and is the hardest part of evolving to this model because it means "letting go".  In this space, direct sales and e-commerce companies excel because with the easier logistics they have to provide an unconditional guarantee, the empowerment provided to the front-line employees to do the right thing for the customer and their historically advanced use of customer and transaction data to understand their business in real-time (this was true even BEFORE the internet!), their management teams have the luxury of being able to focus on finding and developing their people and staying very strategic in terms of their own area of responsibility. Executives can focus on keeping everyone aligned with a few core strategies, and then just keep hiring and training the people who fit the culture. It helps make the job easier!  Great examples abound, but long before Zappos got their reputation for being a fun place to work and putting the customer first, Lands' End and L.L. Bean had already pioneered much of this approach.

So as a business owner or someone in a leadership position in a larger company - what specific things can you yourself to start down your own path to "Customer-First"?  Here are a few suggestions:

  • Work out what your "Guarantee" is - ANY business can and should guarantee something.  A great example was a recent presentation I gave to a group in Seattle where a certified franchise coach was in attendance. It's hard to guarantee anything as a consultant, but she came up with something that was quite compelling and I know will help her reduce the perception of risk that potential clients will see in working with her.

  • Give yourself a thorough "Customer Service Check-up" - it is well worth it to have someone come in and audit your customer service procedures and policies. Having an outsider come in a do this for you is also far more effective as they will notice oddities that you and your teams have long ago stopped noticing since they are now considered "normal".  Here is a great list of ideas that could help when you do you own initial "self-examination". I particularly like the one from Disney that goes "It's not my fault, but it's my problem". Beautiful attitude.

  • Make Yourself "Simple" Again - Remember when the business was small and you only had a few dozen SKUs? Well, sometimes you need to revisit those early days and try to see your business as a customer. Years ago one of the UK's giant supermarket chains observed that when they offered free tastings of a gourmet brand of jam in their stores, sales excelled when they limited the selection to just five or six rather than the nearly twenty varieties they had started with. While it does not mean you should arbitrarily take products out of your lineup (they continued to sell the full line of jams, by the way) it does mean you should rethink how you put "choice" in front of your customer. Most of us like our decisions to be simple - so make it easy!  Here is a great post about the "The Paradox of Choice" with plenty of real-life examples that will help organize thoughts on how this applies to your business.

What I hope everyone can take away from this three-part discussion is one simple thing - ANYONE can and should do better for the customer. Small Business or Global Enterprise - there is a long list of small and big steps that can be taken to start down that path. The most important thing is commitment. Turn your own org-chart upside today, and see which pieces no longer seem to fit right. You'll spot them easily and your instincts will help you start to make the adjustments you need to evolve your culture in a positive way.

What Do You Think?

This concludes my three-part discussion on the ideal org model for businesses aiming to be customer-centric. Feel free to share your thoughts in the comments section below, and I would love to hear from readers about future topics of interest that we can cover in this space as well.

David Dallaire

Written by David Dallaire

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