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Making Customer Centricity Pervasive

Originally published June 27, 2013

Over the past few months, we have looked at some of the value-oriented aspects that drive customer centricity as well as different aspects of analyses that can help in framing a customer-centric organization. However, what does it really mean to be customer-centric? The availability of data, or information or even actionable insight are all secondary to basic shifts in the ways that individuals are trained to operate when given the opportunity to engage the customer.

In other words, providing technology for enabling a customer-centric environment does not necessarily imply that the organization will become customer-centric. Basically, changes to the IT infrastructure for managing customer data are insufficient to change the way the company works. The changes have to pervade the way people work with the data in the context of the business interaction, and the customer experience depends on these changes.

So what does this really mean? Creating a culture of customer centricity in the organization is a process of change management that involves two key objectives that are closely linked together: changing business processes to incorporate opportunities for enhancing the customer experience, and training the staff to know when and how to take advantage of those opportunities.

Consider an example that is often used as a driver for customer centricity: using customer data visibility to drive upselling and cross-selling. First, a quick review. Upselling is a process of inducing the customer to purchase more expensive items or services or additional upgrades to those items or services that is ultimately more profitable to the business. An example is “supersizing” a soft drink to a size with a larger volume that has an incremental increase in cost but a distinct increase in margin. Cross-selling is a process of inducing the customer to purchase an item or service in addition to what is already being purchased. An example is promoting the sale of a car insurance policy to a customer who is purchasing a home insurance policy.

Both of these activities lead to desired increased revenues, but both require the delivery of knowledge of important aspects of the customer’s profile to the salesperson who is engaged with the customer, including:

Demographics: Is this an individual with a profile that is aligned with one that is eligible for the promotion?

Credit limit: Is this an individual whose credit worthiness demonstrates that they can afford to pay for bigger or more items?

Purchase history: The salesperson should be aware if the customer has already purchased an item that is part of the cross-sell opportunity!

Predisposition to purchasing: From an analytical standpoint, to what extent is this individual predisposed to the added-on purchase?
More to the point, given all of this information, what tools does the salesperson have to gauge each opportunity, absorb the presented information and then make the decision to promote the increased sales? This decision-making process becomes even more of a challenge when the salesperson is not familiar with the add-on products to sell or is not properly trained to make sales that he or she is not accustomed to making.

For example, the insurance company might promote selling home policies together with automobile policies. A salesperson trained to sell home insurance might not have enough familiarity with automobile policies to feel comfortable selling them, and may revert to only promoting the products or services that he or she knows well. The result is that even with data that supports a strategy of customer centricity, the objectives for increased revenues are not going to be met.

If you recall my recent article about the customer life cycle, I commented that different aspects of the customer life cycle in different sales and customer relationship scenarios have different impacts on expectation for customer lifetime value. In addition, though, we considered that different business process scenarios require different emphasis associated with the customer touch points when engaging and retaining the customer.

That suggests that to make the strategy for customer centricity directly connected to the business processes, reviewing the customer touch points involves more than just determining the requirements for customer data. It also involves transitioning the process and those participating in that process to take advantage of potential opportunities.

Each customer touch point can provide multiple opportunities for improving the customer experience and adding value to the organization. Examine what those opportunities are, but then consider which actors are involved in each business process and what they need to know to take advantage of any opportunity.

Review the existing business process to see how it must be adapted to present the opportunity to the actors. And develop a training program that ensures that the actors are aware of what they need to know, how the right information is going to be delivered, the parameters for making the decisions that lead to the desired outcome, and what the expectations are for executing against the strategy for customer centricity.

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