In the paper, I discuss, for example, high amplitude, which is one of the outcomes of performing at Level 3. Amplitude describes the fullness that is created when the cultural shift is made. In the food industry sensory-analysis experts use the term to describe food flavors that are blended and balanced.  We all recognize the superiority, for example, of a gourmet chocolate chip cookie, when compared with the packaged off-the-shelf brands offered in a grocery store. Achieving this blend requires focus and is much more complicated than simply saying “Go out and get a better recipe.”

In the context of customer-centricity, high amplitude represents the convergence of all efforts on behalf of the customer, which is the destination of the Level 3 journey. Level 3 is a system, not a recipe. It is the blend and balance that customers experience and remember when they work with any organization.

The paper also addresses benefits. Operating at Levels 2 and 3 is the best way to rise above mediocrity and away from the gravitational pull to commodify your products and services. The white paper outlines many of the advantages that accrue to organizations that move away from the old supplier-centric business model and embrace solutions that are customer-centered. Its power is generated because it is a comprehensive system that permeates the silos that exist in most businesses.

I encourage you to download the white paper and distribute it to your colleagues. There is no registration necessary.

Customer-centricity at Level 2 and Level 3 is really different than Level 1 transactional customer service. Navigation toward becoming customer-centered elevates companies above complacency and is the most unifying force in the culture of successful organizations. It is designed around a feeling of wholeness, which is grounded in the philosophy that our work is incomplete without customer closeness combined with proactivity that adds value. It is a powerful and sustainable game-changer for companies that commit to making the journey.

One enemy standing in the way of success is lack of clarity. So we’ve created the Customer-Centric Index™ (CCI) to track our clients’ performance. The index measures closeness with external customers and strength of relationships with internal customers. It’s geared to focus on silo-busting. It’s systematic and consists of highly-specific measures of the behaviors that experience tells us will make those clients’ organizations more customer-centric.

The CCI is a dynamic tool that allows an organization to track its level of customer-centricity against its customer satisfaction scores in order to monitor changes in customers’ perceptions of its performance. Because the CCI is behavioral, it’s also an excellent yardstick for trends in business performance, including profits, problem-handling, and organizational efficiencies. It is heuristic and enables discoveries that focus an organization on metrics rather than intangible “feel-good” reasons for taking care of the customer.

Fred Reichheld’s well-known book, The Loyalty Effect, is almost 15 years old. While many of the principles it espouses are still true, the book presents these ideas from a “selling” viewpoint, concentrating on the advantages for the business in terms of customer retention, recommendation, and the efficiencies that accompany these categories. Of course it’s always cheaper and more effective to keep a customer buying from you rather than to find a new one. But the nature of loyalty has changed.

Today, keeping customers requires staying even more closely in tune with their experiences. Undoubtedly, the customer landscape has changed in the last 15 years. Customers want the best price from your organization, and thanks to the Internet they can easily find out what your competitors are charging. The barriers to customers leaving you for a lower-priced alternative are much lower. Although they might continue to buy from you, their comments to others may not always present accurate and positive messages about you. In addition, in most cases your most loyal customers have higher expectations from your organization than your average customers (according to Jeremy Alexis’s “Using Design to Create Fiercely Loyal Customers” in the book Building Design Strategy).

Customer-centricity has come of age primarily because the customer has many more options than in the past. Being product-centered is dispiriting to businesses and employees because it unrealistically expects customers to behave in traditional ways. Worse, when businesses are supplier-centered, it’s much more difficult to detect “drift” in their customer focus. Ambiguity can and will set in.

The CCI is the key to making the connection. It puts the ambiguous into an ordered, recognizable and repeatable system. It’s a measure of the quality of the interactions your organization has with your customers. It provides specific data that takes your organization’s buy-in from “soft” benefits to a straightforward, tangible understanding of the behaviors that provide value for your customers. If you’re transitioning to being more customer-focused, it’s critical to define and measure the impact those changes will have.

In the journey toward becoming customer-centered, organizations must develop their own evidence, based on what they have determined to be most important in driving deeper customer value. Using the CCI, they can track improvements against profits and customer satisfaction to clearly understand the influence that “thinking like a customer” has on their overall performance. Customer-centricity is transformative. Now, with a valid measurement system, its time has come.

*Thanks to Edward R. Tufte for the phrase, Beautiful Evidence.

Much has been written about the ‘How’ of customer-centricity, but not a lot about the ‘Why’. There is proof, of course, of the advantages. Research has shown that customer-centric organizations had a 36% higher return on investment than their industries’ median performance because they were focused on a specific purpose. (Corporate Culture and Performance, by Kotter,Heskett). The transformation of Best Buy’s customer strategy has been well-documented (Reorganize for Resilience, by Gulati). But it is easy to look at the evidence as “not applicable to our company.” Where’s the tangible proof?

Remember the Fosbury Flop? It was the 1968 Olympics in Mexico City. Ray Fosbury shocked the world and captured the gold medal by breaking the world record for the high jump by jumping over the bar backwards (facing up). Prior to that time, all high jumpers had used a face-down, straddle technique of rolling their legs over the bar during their jump. Today, virtually all Olympic-caliber high jumpers use the technique that Fosbury invented.

Customer-centricity is as transformative as Fosbury’s game-changing technique. Becoming customer-centered provides purpose to the corporate mission. But it cannot be started with a ‘2 + 2 = 4’ mindset. It is a difference maker because it is a unifying force for entire organizations. It will bring about cross-pollination of perspectives between departments, resulting in teamwork built around integrated mindsets, rather than segregated, silo mentalities, to work through complex customer strategies.

The leaders of customer-centric organizations must have a fundamental belief in becoming the best, coupled with the realization that they will not get there via the traditional product-centered path from the past. They have the attitude displayed by Yogesh Chander Deveshwar, Chairman & CEO, ITC. “Either we become world-class or we leave the business.” (1,000 CEOs, by Andrew Davidson, editor).

Y.C. Deveshwar took over a ‘rudderless’ business and re-oriented it. Under his leadership (since 1996), ITC has transformed itself by focusing on a corporate strategy that synergizes shareholder value creation with societal goals. Yogesh Deveshwar’s vision for the company is “A Commitment beyond the Market” and excellence in sustainability practices. It is that kind of vision that structures all customer-centric organizations.

Customer-centricity starts with the knowledge that performance will improve because it provides organizations with purpose and empowers employees to focus on customer outcomes. But the impact, both external and internal, is clearly measurable after it is implemented. Next week we will introduce you to a method for proving that customer-centricity is really better.

I recently finished A Technique for Producing Ideas, by James Webb Young. Written in the 1930’s, it is an interesting reminder of how we can develop our creativity for our customers. Young’s writing has a genuine, matter-of-fact quality. It is refreshing to know that the old model for finding new ideas has not substantively changed. He first defines an idea as “a new combination of facts.” The success in generating innovative thinking becomes stronger when our “ability to make new combinations is heightened by our ability to see relationships.”

Young compares the idea-searching process to what occurs in a kaleidoscope. This toy has little pieces of colored glass in it, and, when viewed through a prism, they reveal new geometrical designs. Every turn of the cylinder shifts these bits of glass into new patterns. The more pieces of glass that are introduced, the more possibilities that will be available for new and exciting combinations. The same possibilities exist for inspiring customer-centered ideas in all organizations. A greater variety of experiences that our teams have will inevitably lead to fresher ideas within our organizations.

Too often, we mistakenly believe that ideas which will benefit customers will arrive magically and so “we sit around hoping for inspiration to strike us.” Young shows us that, instead, new combinations develop through persistence and use of a repeatable method. As he observes, “this (idea-generating) technique can consciously be cultivated.” He suggests a formal process for documenting specific information, which can be synthesized or “digested” when searching for new ideas.

Finally, he suggests to stop straining for ideas, but rather, to use a “period of rest and relaxation” while still “constantly thinking about it.” Think of how we gain new insights into solving a puzzle which we return to after a break. As long as we stay focused on what the customer values, time away from idea generating will actually bring fresher insights.

The takeaway from James Webb Young and more contemporary firms, such as IDEO, is that ideas most often happen through a systematic and collaborative process. Our ability to combine our experiences and direct them to improvements on behalf of our customers is essential to customer-centricity. Like a kaleidoscope, the more facets that we consider, the richer the opportunities for those customers. However, we cannot forget that generating new ideas involves an operative technique that we have to work at.

Organizations that want to develop an effective process for designing new, customer-centered solutions need to educate teams of employees to make the most of ideas and encounters they have experienced. When they embrace the fun and the complexity of patterns and relationships, as in a kaleidoscope, employees feel more comfortable with unleashing their creativity to benefit their customers.

If we focus our organizations on simplification that the customer will notice, the result is clear, pragmatic and intuitive. A straightforward outcome can be understood by virtually everyone, not just its creators. It is versatile and elegant at the same time. Keeping products and services simple must be a core value of any customer-centric company. Otherwise, we risk becoming stuck with outdated perspectives.

Tom Peters has been writing about making things simpler for well over 30 years. In Thriving on Chaos he explained that the basic force behind higher quality is simplification. “Almost all quality improvement comes via simplification of design, manufacturing, layout, processes and procedures.” He faulted the old school “passion for the complex” mentality and admonished us to quit waiting for the breakthrough idea and to pursue “incremental improvements.” Most organizations did not heed his advice very well.

The emphasis on simplification in an organization does two things. First, it forces us to think “what is really necessary?” The designer James Victore calls this “whittling” or “getting it sharp and perfect” (when interviewed by Debbie Millman). The end result is clean and uncluttered. It might still be improved but it is approaching the way it should be. One of our manufacturing clients had an employee who designed a one-piece part to replace the previous two-piece version. The customer loved it because it was easier and it ultimately saved money in manufacturing, as well.

Secondly, this emphasis fixes your culture on a common goal–keeping it simple. Here’s an example: We have all experienced the need to reset the digital clocks in our homes when we switch from Daylight Savings Time (DST) to standard time. On most devices, it’s bothersome to change the hour, especially if the clock is designed so that we have to forward ahead 23 hours in order to set the time back one hour in the autumn. It’s not something that we complain to the manufacturer about. And it’s certainly not something that we ask about when we first purchase the clock. Nevertheless, we have to put up with a variety of annoying steps to carry out the task.

The designers of my iHome radio, however, thought about their customers. They added a simple button on the back of the appliance that toggles between a -1/+1 DST setting. With one click, the clock resets the hour without changing the reading for the minutes. I really appreciate the classic simplicity of the process and the fact that the button was engineered to make my life more convenient. It humanizes the technology.

Success is dependent on adding value to customers. Admittedly, however, this spirit may lead to well-intentioned, but scattered, attempts because your employees may find this deliverable difficult to understand if a good outcome is not clearly defined. On the other hand, the “simplify” goal is great shorthand to focus employees on helping their customers to accomplish a job in fewer steps. It is the surest way to add value.

Photo from: photo by jag

Alan Webber, in Rules of Thumb, relates a story of the Republic of Ragusa from the 1300s to the early 1800s. With only 5,000 citizens it seemed virtually inevitable that it would be overtaken by one of the powerful empires that surrounded it—the Ottoman Empire, the Venetians, and the Vatican. The Ragusans, however, maintained their freedom by turning knowledge into a competitive advantage. Their Senate regularly sent ambassadors to powerful countries capable of deciding the Republic’s fate. They found out about shipbuilding and military build-ups and this early form of networking helped the country understand the threats and opportunities facing it.

Early warning systems have always been an advantage. Being customer-centered is the best way to position a business for that benefit. It will alert the organization of serious problems. It will provide strategists with “the luxury of time: time to anticipate, to think, to plan.”

Being customer-centric means that you, as an organization, go to your customers proactively, not that you wait for them to come to you. To operate effectively, you must operate outside the four walls of your business. Staying in tune with the latest information about customers and their needs means that you will not be taken by surprise.

In addition to the time benefit of early warning, consider the quality of the information that you gather, as well. It’s fashionable to say that we are all in the knowledge business, isn’t it? Well, if we are going to compete on knowledge, then it must be supported by the best knowledge that you can muster about your customers. This is far beyond a CRM system. It must be built by establishing a best-practice sharing culture. Great performances for customers cannot be stove-piped. Design a system in which customer knowledge is shared with everyone in such a way that individual customer-centered performances raise the bar for the entire company.

Webber says it best: “There’s no such thing as good news or bad news. There’s only fast news and slow news.” Fast knowledge happens within organizations that are connected and proactively communicating with their customers. Every organization should have an early warning system. The best one is built around closeness with your customers.

Hartmut Esslinger, in A Fine Line, outlines clear techniques for companies to promote sustainability in the environment. The traditional business approach has always been to produce more so that consumers will buy more and not to worry about the disposal problems. Esslinger’s company, frog design, has developed a green methodology in its design that evaluates every stage of manufacturing, from initial concept to end-usage (I encourage you to read the book, which has great ideas). I want to consider the final element of sustainability—the ability to recycle products after they are sold and used.

Can you connect with your customers in such a way that they willingly want to recycle more consistently? In order to be convincing, your solutions must appeal to customers on an economic level with good value, on a practical level that your solution will benefit them and on a convenience level that it will not be too difficult. I believe that every organization could do that if they put their minds to it. The bottom line is about creating a rewarding and emotionally rich experience for customers, with alternatives they can choose from.

The essential element is to design your processes as a caretaker, with a focus on the future. In our recycling example, the philosophy needs to be grounded in owning the entire experience—not simply believing that someone else should worry about what happens to the product after you sell it. The totality takes into account the entire customer “ecology.” Its success has to be delivered by encouraging customers, rather than “forcing” or “preaching.”

This kind of caretaker connection can focus your work to improve any process within your company. Enlightened companies understand that thinking like a customer will help them develop designful products and processes throughout their businesses, which, in turn, will make relationships with those customers “automatic” because these customer-focused systems make more sense. One success will jump-start many others. What it will teach us, whether recycling or any other customer-facing process, is that it needs to be coherent and convincing, not naïve. Transformation is gradual. It comes about in stages. It is about creating the “next better thing” rather than perfection. And that in itself is a valuable lesson.

The new approach to customer-centricity embodies being a caretaker for the customer ecology in every interaction between external customers and your organization. The organizations that will fall behind in the future will be the ones that, as Esslinger writes, “fail to devise a more innovative and creative strategic approach to their businesses and products.” This is not a save-the-world mentality, but a realization that sustainability, in an environmental sense, parallels techniques for sustainability of your organization. It depends on designing an increasingly better outcome for its users. Harness your forces to design outcomes that will benefit the customer, individually and globally, and success will happen.

Fluency in a language requires superior skills in both comprehension and delivery. This smoothness is similar to the characteristics needed to be customer-centric. However, fluency is ultimately judged by the listener, not by your opinion of how experienced you believe you are.

One of the most admired companies for customer focus is Toyota. They believe in “Customers first, dealers second – and manufacturer last.” One of the core values they embrace is continuous improvement for the customer. This leads them to future growth and keeps them away from rigidities in their processes. They accept new challenges in the ways that lifetime learners of a language consistently look for new ways to become more eloquent. They want to meet every customer need in the same way a fluent speaker wants to be able to understand and use as many words as possible.

Supplier-centric companies expect customers to speak their language. If you have traveled to a country whose citizens don’t speak your language and you expect them to understand and respond to you, you will be very disappointed. Communication is inevitably poor when it is one-sided. In a similar manner, structure your business philosophy to always evaluate how the customer sees you and to question how you can make improvements. Being a customer-centric organization is not a destination. It is predicated on new progress every day and it requires practice to become fluent.

Customer fluency is grounded in sharing a common language–the one that your customer is comfortable with and understands. Just as in demonstrating your skills in a new language, the native speaker of that language is the best judge of how proficient you are in your skills. Set the goal for your organization to be customer-centric As your fluency in being customer-centered improves, your organization will become more motivated to continue the learning process.

Success requires collaboration so that your organization is “speaking the customer’s language.” However, it goes far beyond learning (metaphorically) enough words and phrases to get by. If you are not thinking like a customer, the results will not be sustainable. The conversation will inevitably break down. Focusing on your customers is the most important dimension of your culture, and its delivery must be as fluent as possible.

Image by marbla.

Amazon.com continues to be a successful, strong brand because it always answers its business questions—strategic and day-to-day—with a solution that includes “the customer.”

Jeff Bezos, Amazon’s CEO,  has given the world insight into how he leads the Amazon organization through a series of interviews over the years. I believe the best is “The Institutional Yes” (Harvard Business Review, October 2007). In the article, Bezos describes himself as “congenitally customer-focused.” In its processes and culture, his entire company earns that customer-friendly status over and over, thanks to his leadership and strong sense of abundance for the customer.

Because of the fast-changing markets that Amazon operates in, Bezos believes that it helps to base your strategy on things that won’t change. He asks his senior team “What’s not going to change in the next 5 years?” Invariably the answers always revolve around customer insights. For example, they understand that customers will continue to want lower prices, so they must always be working on defect reduction and higher efficiency. Customers will also want greater convenience and more transparency; therefore, suppliers cannot be satisfied with the status quo. In a world in which the tempo of change is accelerating and wrong directions are taken too often, customers are the constant that can keep our decisions grounded.

Bezos also mentions a Warren Buffett story, in which he has three boxes on his desk: In-box, Out-box and Too-hard. He follows that story by saying, “Whenever we’re facing one of those too-hard problems…and can’t decide what to do, we try to convert it into a straightforward problem by saying, “Well, what’s better for the customer?”

What a great message. The answers become much simpler when we think like our customers.

In order to grow, we need to constantly question what we are doing and how we can improve on today’s systems. It is a valuable reminder to all of us that the answers to our business questions should be customer-centered. In fact, that may be the only approach in the fast-changing world in which we live. Organizational performance will be exponentially stronger if all employees feel they are doing everything they can for the customer.

Amazon has a powerful mission to uplift customer-centricity, not just within their company, but “across the entire business world.” Jeff Bezos wants them to “be stubborn of the vision; be flexible of the details.” And, answer all of your questions with the customer in mind.

Tells are indicators of what others see in you—how you will behave in any situation. Customers use all of your interactions with them to form an impression of how you will treat them as customers in the future. It is really important to understand these tells and to manage them deliberately because customers judge your company by them.

A tell in poker is a subtle but detectable change in a player’s behavior or demeanor that gives clues to that player’s assessment of his hand (Wikipedia). A tell in business is any organizational interaction (human or technological) that indicates how you really operate—and customers will pick up on it very quickly. If it is negative, it will send a direct message that you don’t want them as customers.

Every company will try to convince you that it is customer-centric. However, every company has thousands of tells that communicate to customers what their culture is like. The important thing to realize is that these tells must be managed across the entire organization—not transactionally with good “service” from front-line employees—but strategically company-wide. The structure must be recursive, built on customer-centered procedures or approaches that can be applied repeatedly. Success will be related to strong feedback loops that keep the business in touch with its customers.

When I travel, I use one hotel chain over 90% of the time. In terms of frequency, I am one of the top 5% of their customers and have an elite status in their rewards program. They know a lot about my preferences and my habits. Yet when I reserve a room online they always ask me for my AAA (American Automobile Association) number. Don’t you think they could program my information to remember that number? Instead, I have to pull the card from my wallet every time and enter the number.

I can’t believe that no employee of that hotel chain that has experienced this online booking process has not questioned the same issue. In fact, I was told by an employee on the elite customer help desk that he had worked there for seven years and that they had been receiving the same change request from customers for that entire time. When I submitted my improvement idea (not rocket science) to their online suggestion channel, they responded that they don’t have enough fields to store these numbers in their computer files. Yikes! The problem is bigger than I realized.

On a positive side, we have many clients that proactively ask their customers to rate their organization on its willingness to fix a problem—not a specific problem, but rather to what extent do these customers believe this organization will take ownership of their problem that they might have next week or next year, If you are customer-focused, that is a category that you want to score very highly on–because it announces whether your customers trust you to provide value. Do you know and measure this critical assessment with your customers?

Don’t marginalize your customers. The desired strategy should be to, first, get rid of all the negative tells. But this philosophy is grounded in a belief in reciprocity, a condition or relationship in which both sides are working on the other’s behalf in their exchange. Tells will give you away if they are negative but will also reinforce your stature if designed positively.

Companies don’t forget their customers; they take them for granted. But you cannot hide this off-handed attitude for long. The evidence is in the tells that your customers pick up. On your journey to becoming customer-centered, look at every tell and make certain that it plainly shows that your organization is thinking like a customer.

The graphic with this post illustrates a SHOJI system, which indicates the “mood” of a room by monitoring a variety of factors