Many companies claim to be customer-driven without having a conscious relationship to what it means. What actions can you take to become a customer-driven organisation and increase growth and profitability?
Many companies claim (or assume) they are customer-driven but have few or no scientific results or evidence to prove that they are. Are you one of those?
Business is all about hardcore numbers and acting on facts. The same applies to what drives customer decisions and value and how you can create a growth engine out of customer experiences by having a scientific approach to it.
How an organisation delivers is as imperative as what it delivers
For your organisation to be truly customer-driven, you need scientific insight into what drives customer values and decisions, as well as the ability to align the organisation and deliveries accordingly.
Lack of this insight can cause business decisions to be made on the wrong basis and can create a mismatch between what customers expect and the delivery—which in turn affects the willingness to pay and thus the company’s profitability.
Adapting to a customer-driven business model requires proper insight, internally and externally, accessible data and digital tools, as well as the right organisational set-up. As the cost of labour is high it is crucial to optimise internal processes using the workforce correctly according to what drives customer value.
Many companies realise too late that being customer-driven is about changing the current business model (that in many cases requires changing the entire organisational set-up), rather than only doing single customer-oriented initiatives, like implementing NPS (Net Promoter Score) or similar.
3 reasons why you don’t succeed and how to get there
We typically see three common reasons for why companies struggle to become customer-driven:
1) Your organisation’s deliveries are based on assumptions rather than customer feedback
The first reason is that deliveries are based on assumptions on what we believe customers require rather than verify value and decision drivers scientifically with customers.
This can be done through a systematic customer journey mapping where expectations and customer decision drivers are identified. In this process, it is also crucial to identify which of the touchpoints that give the most value digitally or through human interaction. Lack of this insight makes it difficult to adjust the organisation and deliveries towards what drives customer decisions and value.
2) Your organisation lack data to identify the strongest and weakest links in the value chain
The second reason is the lack of available data to identify the weakest (and strongest) links across the value chain based on the customer journey insights. In each phase of the customer journey, there are multiple metrics that can be measured.
Defining what to measure, as well as the combination between quantitative and qualitative metrics depends on which segment or industry you operate in and whether the role of the decision-maker, admin users, and end-user are held by one or multiple people.
The goal is not to measure all possible metrics, but to define the most critical ones. If you have not defined what, why, and how to measure it will be difficult or impossible to track positive (and negative) impact on initiatives and business results. One key to success is to make the data available across the organisation enabling a data and customer-driven approach across the value chain.
3) Your organisation’s priorities and efforts are not matching customer expectations
The third reason why companies struggle to become customer-driven is that the internal efforts and priorities within the organisation are not matching customer expectations and willingness to pay. This means that the organisation spends time and effort on things that do not convert into business value.
If you lack this overview it will be hard to optimise the organisation, internal processes, and roles according to what drives customer value and decisions. In turn, it will also be difficult to prioritise where to invest human and digital touchpoints to use the workforce correctly.
To be able to identify this and adjust the organisation accordingly you are dependent on using the customer journey mapping insights as well as follow up on the defined metrics in each phase to measure progress.
The findings will empower you with an overview of what needs to be adjusted to match customer expectations and willingness to pay. This can vary from full reorganisation to smaller adjustments with new roles and processes, internal and external feedback loops, incentive schemes, pricing models, and how products and services are packaged and sold.
What are the benefits of becoming customer-driven?
Overcoming these challenges to increase profitability requires a scientific and systematic approach to be able to ensure a positive impact on business results and profitability.
If done right and with the ingredients of good cooperation, commitment, and engagement, your organisation can start transitioning towards a customer-driven business model with these anticipated results:
1) increased employee satisfaction
2) increased customer satisfaction
3) increased profitability
Being a winner within customer experiences can give a major competitive advantage in the market place and be a good investment to fuel a sustainable business for the future—to ensure that you will still be around tomorrow.
Interested in seeing where you are in the transition towards a customer-driven business model? You can do a mini self-assessment by asking yourself the questions stated in the LinkedIn article on how to become a customer-driven company.