What makes customer-focused companies different?

Being customer-centric is easy to say, hard to do.

Walker Information, a loyalty consulting firm, says it comes down to three things:

  1. Leadership: companies are either “just formed that way” at the beginning or new leadership can affect a change in communications, incentives and culture.

    Comment: Couldn’t agree more. In the 10+ years I’ve been researching this topic, I can’t think of one example of a customer-centric company that doesn’t have a customer-centric leader.

  2. Infrastructure: being customer-focused is “built in” to the way the company operates. On new initiatives, a managers will ask, “Is this good for our customers?”

    Comment: Truly customer-centric organizations don’t think about it, they just act that way due to the culture, processes and reward systems.

  3. Action: Customer-focused companies create action on a regular basis on the front lines of the business.

    Comment: This is the tricky and most important part, in my view. Management must translate the customer-focused concept into discrete actions that employees can take every day.

A short video is available here. Well worth a listen.

Why does this matter? Walker Information claims that its clients out-perform the market. And isn’t that the point of being in business?

5 Responses to What makes customer-focused companies different?

  1. Robbert Bouman November 11, 2009 at 12:07 am #

    Hi Bob,

    I would like to add one element. Outside-in focus. And that requires just a bit more than managers asking themselves “is it good for our customers”. The ones that excel ask their customers “what are the outcomes you are looking for?” and translate that into better products and processes.

    A Consistent and relentless hunt for feedback is another mark of the customer focused organization.

    Best Regards
    Robbert Bouman

  2. Graham Hill November 18, 2009 at 6:06 am #

    Hi Bob

    We are all interested in customer-centricity, how it works and how it drives superior business results.

    Unfortunately, the three factors Walker Information identified apply to just about any business with just about any strategic emphasis, not just to ones with a customer-centric emphasis. They are little more than motherhood and apple-pie. And the Walker Index proves nothing either. Correlation does not in any way imply causality.

    What I really fail to understand is why companies with so little to say, still insist in telling everybody about it anyway!

    Where are the real customer-centricity thought leaders out there?

    Graham Hill
    Customer-centric Innovator
    Follow me on Twitter

    Interested in Customer Driven Innovation? Join the Customer Driven Innovation groups on LinkedIn or Facebook to learn more.

  3. Bob Thompson November 18, 2009 at 12:11 pm #

    This is just a short video, Graham, not a Ph.D dissertation.

    The points mentioned do jibe with our research on the factors that collectively seem to drive success with CRM, CEM and yes, even social business projects.

    Customer strategy
    Measurement system
    Organization/people alignment
    Process/experience design
    Technology

    While correlation doesn’t imply cause-and-effect, there are studies that suggest based on time delay that customer-focused companies generate better than industry average returns.

    According to ACSI:

    The ACSI is an important indicator of economic performance, both for individual firms and for the macro economy. As such, the national ACSI score has been shown to be predictive of both consumer spending and stock market growth, among other important indicators of economic growth.

  4. Pat Gibbons November 19, 2009 at 6:48 am #

    Glad to see our short video sparked some thoughts. Thanks for sharing Bob. I agree a short video makes it difficult to communicate the substance behind the three elements of leadership, infrastructure, and action. Ironically, one of the reasons we pursued this topic is that general terms like “culture” and “attitude” are tossed around, but provide little guidance. My favorite — “it’s in their corporate DNA!” I posted a blog on that one — http://blog.walkerinfo.com/blog/engaging-the-enterprise.

    Make no mistake, these three elements require commitment and discipline for a company to see the business impact of their customer strategy.

    Pat Gibbons
    Walker

  5. Steve Walker November 19, 2009 at 3:41 pm #

    While I’m glad viewers are watching our videos and commenting, I’m afraid the discipline of customer strategies is far more than motherhood and apple pie. Admittedly, we may be guilty of attempting to consolidate a complicated topic into a simple video, but changing an organization is hard work and part of completing hard work is the discipline to stay focused and remain vigilent about execution.

    Leadership doesn’t just mean that the CEO is customer focused. It also means they have a structure that provides the leadership for customer-focused decision making. Many of our clients utilize customer advocacy networks that have geographic and functional representatives that put the voice of the customer into practical, everyday use to improve performance.

    Infrastructure is more about processes and systems that are consciously designed and built to facilitate the use of customer insights in all decision-making and planning within all functions of the organization. Most companies factor financial impact and return on investment analyses into decisions, but only customer-focused companies factor in insights gained from customers and analyses directed at understanding how decisions might impact the success of their customers.

    Action may sound like a buzzword, but we have gathered a fair amount of data that points to this as the number 1 challenge of customer advocates and strategists. Customer focused companies we work with have training and technology in place to ensure action takes place.

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