Customer-centric organizations, are they real?

We all talk about value-driven and customer-centric organizations. With what purpose?

To show that a business cares for its customers, their preferences, and expectations.
To highlight that the efforts go towards top-class customer care.

Let’s translate those two slogans into practicality. That means that such businesses provide high-level quality products and services to their clients, and when they occasionally fail, they resolve issues quickly and efficiently.

Is it so?

Customer-centric? Seldom!

Just check customer reviews on Trustpilot or Google, or review the industry CSATs. In the best cases (software industry), the CSAT reaches 77%. It is considered a good one and definitely higher than 70-71% in Social media, Hotels and Energy.

But here comes the tricky part. And that is why I prefer to work with plain numbers than percentages or averages.

If you have 1M clients, 77% good CSAT means that 330.000 people are unhappy with your service. Now multiply that by 9 (Inc.). That’s 2.97M people with a bad impression of your product or service—actually, more than your current clients. In comparison to others, that might look good, but in reality, that’s bad!

How come?

So, how come businesses don’t get it right despite constant customer journeys, frequent investments in IT, training and development of customer care teams, and continuous process improvement to increase quality and delivery?

The answer is that they only get right one part of the challenge – the communication channels. Most companies have a direct line with their customers: hotlines, chatbots, complaint forms, email inboxes…

Feedback, requests and complaints are recorded, frequently answered with automatic messages and escalated to the responsible department, whether that is finance and accounting, sales, IT, product development, etc.

And at that point is where it gets all blurry. Customer care KPIs do not match other department priorities or KPIs. Customer care personnel does not get burnt out by customers’ complainings; they do by the lack of response from the rest of the organization to the complaints.

The result is variability: a customer might get a prompt solution, a delayed solution or eternal silence.

That’s the reality of a silo-structured organization: focused on revenues, slow to respond to after-sales, inefficient in resolving problems, and inflexible to make exceptions.

In a market economy where people have choices, such an operating model is suicidal. And we see that in companies coming and going—only a few last.

So, how can you change that? How can you keep your customer happy and loyal? How can you make it work with limited resources and tough competition?

Kill silos to become customer-centric!

Restructure a traditionally functional organization into a matrix or process-oriented. That will allow you to use an outside-in perspective, control the entire value chain and deliver customer value. Such a change cannot happen at once as it will disrupt business as usual. It has to be well-planned and continuous.

Implement a few end-to-end processes to give your team the accountability and traceability they need to respond to customer care.

The E2E process managers can quickly find solutions, answer queries and even preempt actions because they have a holistic view and authority over the process.

Consider the following

OTC (order-to-cash): this process covers all the flow from the moment a customer place an order to the collection of payment. The relevant KPIs for this process are lead time, number of complaints, rework and returns.

STP (source to pay): this process covers demand planning, supply chain coordination, fulfilment, and cash flow. Its purpose is to ensure the accuracy of sales forecasts and the supply chain’s responsiveness. KPIs to monitor performance are suppliers’ lead time, negotiated discounts, changes to forecast and delivered quality.

TR (issue to resolution): this tends to be a metric for customer care. But another, more efficient way to use it is as a cross-functional KPI. Involve as well finance and IT, and measure how quickly and efficiently all resolve queries (and implement improvements after that) escalated by customer care. The metric is about time and rework.

Many other crucial end-to-end processes can bring flexibility and responsiveness to your organization. If you are starting, consider a flat process-oriented structure for your business upfront. If you are scaling or transforming, begin by implementing these two processes to improve customer service. Then, as you notice results, continue changing and creating flow by introducing more end-to-end processes.

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