Measuring the Customer-Centered Organization
Disney. Airbnb. Teacher’s Pay Teacher’s. Tom’s Shoes. What these companies share is that they are all at the forefront of innovation AND they are intensely customer-centered. Not product-centered. A 2017 study by Gartner found that a majority (80%) of marketing executives believe that their corporation will be “primarily competing on customer experience.” Yet only 22% of those same executives believe they are “able to exceed customer expectations.” A significant divide exists between the culture executives wish for and the one that they live in. And although many organizations are acutely aware of the need to be customer-centered, few have the proper conditions and deliberate innovation strategy to transform their organizational DNA. And what often stands in the way of investing in a customer-centered revolution, is the ability to demonstrate value.
Customer-Centricity is Difficult to Measure
“Not everything that can be measured matters and not everything that matters can be measured.” Committing to an enterprise-wide transformation requires measurable evidence to justify a continued investment. But the reality is that measuring customer-centered design doesn’t fit neatly into a traditional return-on-investment (ROI) calculation. It can be tricky to predict with precision how much value will be captured through improved customer experience. Nevertheless, organizations must justify the investment, resulting in two philosophical camps: Measure nothing or measure everything. Those who measure nothing quickly lose the good graces of senior leadership because they lack sufficient evidence to validate progress and impact. Those who collect everything tend to overshare information which signals a lack of focus and intention. Damned if you do and damned if you don’t.
Measuring the Immeasurable
Instead, I recommend creating an inside-outside method to track and measure your customer-centricity across three types of audiences. First, your internal employees. Your employees represent the most immediate group of customers. Organizations often overlook their employees, but they should be the center of your universe. They’re not only on the frontline with your customers, they are often your brand ambassadors as well. Consider the example of Airbnb. While the company extols the virtues of customer-centricity they also take it a step further by encouraging their employees to stay in Airbnb properties for business travel as well as to invite their employees to play host to Airbnb customers in their own homes. Although the impact of these hands-on experiences can be tricky to quantify, it generates stories and experiences that shape the culture of the organization. When your employees are in tune with your customers, it inspires a sense of purpose and creates meaning in even the most seemingly mundane tasks. These factors can be measured through survey, observation and behavioral tracking. Employees can serve as an early warning system for the organization. If employee’s feel disenchanted by the organization, chances are that this feeling is an order of magnitude higher for your direct customers.
A second audience is your direct customers. The intention is to understand and measure the experience that a customer has with your brands, services and representatives. These experiences leave fingerprints all over them that can be used for evaluation. This will enable your teams to view the world through your customer’s eyeglasses, empathize with their experiences and be better positioned to anticipate their needs and wants. An interesting example of this is Best Buy. Best Buy battles low cost, online retailers by providing hands-on, in-store customer sales and support. However, through customer measurement they found that some groups of customers would frequently leave the store without making a purchase. By digging deeper, they found that sales people that led with excessive technical features about the product tended to overwhelm customers who were seeking basic product information and comparisons. It enabled Best Buy to adapt their on-the-floor sales strategy and customer engagement. Best Buy would have never discovered this insight if they hadn’t been measuring the activity of their direct customers.
And the third audience is the general public. How your organization is perceived can directly affect both your direct customers and employees’ interactions with your organization. According to the reputation institute, your reputation is “the overall estimation in which an organization is held by its internal and external stakeholders based on its past actions and probability of its future behavior.” Regularly assessing stakeholder perceptions of current and past actions, as well as overall reputation, is an important gauge of customer-centricity. As important, it provides the organization better insight into the people they serve. When a company fails to take a customer-centric view, it can allow for cracks in the organizational foundation. A prime example was the public relations debacles from a United Airlines event of a few years ago. The world watched in horror as video accounts showed a passenger being forcibly removed from his seat because he was resisting being “bumped” from an overbooked flight. By not having a customer-centered approach, United Airlines and their reputation took a sharp downward turn into the ground. This reputation debacle has had a direct impact on the bottom line.
The real measure of a customer-centered organization is how the company thinks, talks and acts towards customers when they think no one else is looking. But in practice this is incredibly difficult to measure with accuracy and consistency. Therefore, creating a three-pronged approach that starts with the inside of your organization and moves to the outside is a thoughtful way to track, measure and improve your customer-centricity.