What some customer-centric strategies get wrong

Matt Dixon

October 10, 2018

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What company today doesn’t profess to be “customer-centric?” It’s become such a platitude in the modern business world that managers rarely stop to question what it really means. When I ask leaders what they mean by being “customer-centric,” they typically tell me that it means putting the customer’s interests first—the belief being that the best way to generate value for the enterprise is to first deliver value to the customer.This view is almost impossible to argue with. And the evidence seems to overwhelmingly support it. We all know of the legendary tales of a customer-centric approach — the companies who were richly rewarded (with loyalty, growth, higher share prices, etc.) when their companies decided to do what was in the customer’s best interests. And, by the same token, we see almost daily evidence in the news of the often disastrous outcomes that occur when companies put their own interests ahead of their customers’.

A happy medium

But it’s between these extremes - the legendary tales of a customer-centric business and the clear-cut examples of corporate self-interest - that most of us live. Like the middle 60 percent of a normal distribution, most companies profess to being customer-centric - in their processes, investments and decision-making processes — but still struggle to get paid for doing what they honestly feel is right.What's the difference between those in the middle of the distribution curve who generate higher returns and those who continue to struggle, despite their best intentions? Some would argue the difference is in execution, and others would argue the difference is leadership. But I’d argue that the difference fundamentally lies in whether a company has more of a “telling” or “listening” culture. What does this mean? In short, it’s the difference between a company that leads with its own assumptions about what’s best for customers and a company that leads with an open mind, looking for insights and open to the idea that their assumptions just might be wrong.

You know what they say about those who assume...

This is the silent, nefarious killer of customer-centric initiatives - not knowingly ignoring what’s in your customers’ best interests, but assuming you know what’s in your customers’ best interests.Over my career, I’ve seen how eye-opening it can be when companies suddenly realize the difference between telling and listening and then recognize the impact it can have on their own businesses. For instance, in 2011, my CEB colleagues and I co-authored The Challenger Sale, in which we argued that customers don’t want or need salespeople to come in and ask them “what’s keeping them up at night,” but instead are looking for salespeople to tell them what should be keeping them up at night. Why? Because today’s customer is out there learning on their own. The best salespeople have figured this out, but most companies haven’t. Instead, they spend time and resources teaching their sellers to ask better questions so that they can diagnose customer needs… instead of investing in their ability to prescribe needs to customers.

Effortless is the future and the future is now

Similarly, in 2013, my colleagues and I co-authored The Effortless Experience, which was a global study of nearly 100,000 customer interactions that revealed that when customers have problems and need help from a company’s service department to get those problems resolved, they aren’t looking to be “wowed” or delighted. Rather, they’re looking for the interaction to be easy - seamless, frictionless and low-effort. But the number of companies I encounter who continue to preach the value of exceeding expectations in the service channel and giving customers endless amounts of choice when it comes to how they get their issues resolved (thereby unwittingly creating a high-effort, frustrating experience for their customers) is surprisingly high.Today, I work at Tethr, an AI and machine learning venture in Austin that helps companies mine voice data for insights. And while the scenery has changed, the story remains very much the same. When we talk to companies about using AI to mine customer voice data for new insights - like how their customers want to be served and sold to, or the sorts of products, features and benefits they really want - all leaders we talk to agree that this is what they need. But the real “tell” as to whether they’re more interested in listening as opposed to telling can be found in the things they ask for.

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“Can you help me monitor what my agents are saying?”“Can you help us automate quality assurance?”“Can you scorecard my reps so that we know how they compare on key behaviors like empathy, friendliness and professionalism?”“Can we use your system to flash real-time screen scripting suggestions in front of our reps so that we can guide them to better customer outcomes, higher sales conversion, etc.?”

These are the questions that telling companies ask. These companies, without knowing it, have made a fatal mistake that will prevent them from achieving the desired returns from their customer-centric strategy. They’ve assumed they know what customers want and are looking to use technologies like ours to monitor the frontline to ensure compliance.

Listening for motives

To be clear, this isn’t always a bad thing - sometimes our frontline is required to say or do things by policy or law and we need to make sure our people follow the rules. But, more often than not, it’s ensuring adherence to company-defined scripts and checklists that motivates them to ask for this sort of functionality.A conversation with a company that is looking to enhance their listening (as opposed to their telling) sounds very different. These leaders want to know how they can use technologies like Tethr's to delve deeply into the voice of the customer. They want to use the data to address questions they’ve struggled to answer, despite spending untold amounts of time, money and resources to move the needle.

“What kind of interaction actually leads a customer to give us a high NPS or low Customer Effort score?”“How do our best people handle customer frustration so that these customers feel we’ve done our best and don’t take their grievances to Twitter or Facebook?”“What do our best sellers say and do to deliver higher sales results and better customer loyalty?”“What do our customers really want from us in terms of products and services?”“What are the risks we should be aware of that we don’t even know are out there?”

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