Thursday, 31 May 2007

Living In The Age Of The Customer

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"There is only one boss, the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else."

Sam Walton, founder, Wal-Mart

Sam Walton expresses it so well, as of now the customer is "King". If we accept this reality, then we have to ask ourselves, how do we treat this King?

It is a fundamental question and one that will have a profound effect on the way we do and operate in business for decades to come. It will also impact the very way in which we live our lives as individuals. In our presentations and classes the single biggest challenge for attendees seems to be how to get their head around the concept of dealing with the customer as King. They give the impression that in most of their organizations the majority of employees don't know who the customer is or how what they do supports the efforts of the organization to deliver on promises for the King. Yet, those same students and audiences are consumers too! And they are continually sharing their bad experiences in class. Some even laugh about their bad experiences as customers of their own organizations! Occasionally of course we get people sharing their good experiences too.

Good customer experiences are what it is all about. Any King wants to be treated as such and made to feel like a King. Interestingly, if you search back into your own buying experiences you will find those good experiences, how did you feel? Good right? So what are you doing to create those experiences for your customers?

Now think back again to your own great experience. What made it good and what was different about it? Chances are that the experience occurred when something went wrong and somebody assisted you in a way that both made things right and made you feel good about it.

As we reflect on this we should start to see a number of things. Firstly, it was a person to person experience, which means "People" are crucial when it comes to creating great customer experiences. Secondly, the fact that a person put it right means that within your own experiences, that company had provided enablers that allow the person to engender those good feelings. So we know that companies already have the innate ability to delight customers and generate great experiences. Those companies do know what a "Successful Customer Outcome" looks and feels like.

The third thing we can note, and possibly the most significant for bean counters, is the fact that that it occurred after we had a bad experience. Many readers will see where this is going in that we need to learn to think from the "outside in". But, just for a moment we can allow ourselves to look at things from the inside out, something that should be easy as we spent most of the past 100 years thinking this way. So from the inside out, how much time, money and resource did that company waste in generating the bad experience that triggered the good experience? How much waste does your organization generate in trying to deal with bad experiences and how much profit goes down the drain as a result?

Perhaps like the Intercontinental Hotel in Montecasino, Johannesburg – you provide training courses for your staff in how to handle complaints and customer relation issues. When meeting with the management of that hotel recently we asked the question "How much cheaper would it be to fix the causes, rather than paying the price and generating the waste in dealing with the consequences?" It seemed that this train of thought was a revelation to them, but you could almost see the dollar signs in their eyes and hear the cash registers running. They are not "organized" to be able to think that way.

So it is all just a matter of allowing people to think from the outside in, understand our customer needs and organizing around them. Well yes and no. You see it is not quite that simple, in the first instance for our people to deliver those great experiences they need to understand the organizations strategy. That strategy in order to inspire them to act needs to explicitly state the role of the customer and how the company plans to deliver on their needs. They also need to know that the processes that the company either has or will put in place are designed to deliver those great customer experiences. This means we need to add "Strategy" and "Process" to our list of attributes we need to work on.

So we can now see that in the age of the customer, the customer is King. This means that we will have to create and share an outside in strategy that will allow us to organize around the King. This strategy has to be communicated in ways that allow our people to buy into it and understand how what they do supports it. Then by using smart processes to enable our people to deliver successful customer outcomes, we can change our organization to support them, resulting in increased revenue and profits. There is one final observation to share at this stage and that is around "leadership". In order to inspire and execute on such a strategy then organizations need to look to leaders not managers in order to deliver. People do not respond well to mangers, but love to be inspired and motivated by good leaders.

Subsequent works will look at the issues of "Strategy", People", "Process", "Organization", "Leadership", and "Successful Customer Outcomes". But for now perhaps you would like to ask yourself the following questions about your own organization.

1.    Does everybody know what your company's strategy is?

2.    Is that strategy centered around your customers?

3.    If people know your strategy, do they understand it?

4.    As you talk to people, are they inspired by your strategy?

5.    Do people support the processes, did they design them?

6.    Are they rewarded based on process and strategy or just on activities?

7.    Can your company elaborate on what successful customer outcomes look and feel like?

8.    Do you train managers and analysts to be leaders rather than managers?

The answers to these eight questions will provide you with great insight and help you to understand where the gaps are as you move into the Age of the Customer and further works will help you develop ideas and plans to address the issues you are likely to find.

Note: This article first appeared in 2006 on Mark McGregor's series of articles on

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