These days, advocates claim the need for "executive support" for any corporate initiative beyond switching #2 pencil vendors. But what's needed for real, down-to-the-bone customer centric transformation is of a different order entirely. As an early poster observed, focus on the customer doesn't come naturally to most of the thousands of front-line employees that interact with customers on a daily basis. Silos must be blown up and attitudes changed. What's needed is more akin to coercion and support.
Fortunately, in many cases the ball starts rolling with an executive-level decision to adopt a customer-centric business strategy, so there's buy-in at the top to begin with. The reasons for the shift in strategy vary. It is often prompted by the imminent slowdown in traditional sources of growth. Best Buy decision-makers, for example, foresaw the limits to geographical expansion. Wachovia needed to generate organic growth while consolidating a string of acquisitions. Hyper-competitive markets also spawn customer-centric strategies, often by those firms a rung or two down from the top. OCBC, Singapore's 2nd largest bank, turned to service excellence and relationship management to stand out in their hyper-competitive market, where any product differentiation is rapidly imitated and banks share similar distribution networks. In case you missed it, in August, Forrester Research's Elana Anderson posted a great entry about three different approaches to customer-centric strategy that companies can take.
Once the journey is begun, highly visible and enduring executive support must make it clear that customer-centricity is more than the latest corner-office fad. KeyBank CEO Henry L. Meyer III went on the record, saying "I want KeyBank to be at the forefront… of a movement away from an obsession with selling products to one that emphasizes meeting client needs." Best Buy Vice Chairman and CEO Bradbury H. Anderson made things clear in his 2005 letter to shareholders: "only those retailers who stay close to their customers can flourish." This commitment must be sustained across the multi-year time frame required even for leaders like Best Buy, whose marketers still don't feel they've gone as far as they need after 5 years.
During the years of customer-centric transformation, proper executive coercion manifests itself by driving the the other seven elements in our list of key criteria. Most importantly,
- Organizational change: creating ownership for the "voice of the customer" and re-engineering business processes around these teams
- Culture change: instilling a customer orientation into organizational values, principally through hiring, measurement, and compensation practices
- Investment: investing in infrastructure, such as data integration, Enterprise Marketing Management, as well as people, both training and skills for existing employees and headcount growth for customer segment managers, analysts, etc.
- Cheerleading: internal salesmanship through highlighting accomplishments and promoting tangible business benefits
While most of these points relate to customer-centric transformation of entire companies, we also see many marketing organizations successfully pursuing customer-centricity within their organizations in a more ground-up fashion. But executive sponsorship (if not coercion) is still needed. Peter Kim's blog entry on "Reinventing the Marketing Organization" highlights the need for culture shift, investment, and redesigned P&Ls and metrics, all of which clearly require executive buy-in. More even than changing pencil vendors.
Next, we'll cover customer-centric marketing prerequisite #2 (and perennial marketing buzzword), "360 degree view of the customer."