The new customer-centric. Why delighting consumers is more about brand-led innovation than following customer demands

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1 The new customer-centric Why delighting consumers is more about brand-led innovation than following customer demands

2 Introduction Amazon aspires to be Earth s most customer-centric company. Numerous mission statements are sprinkled with customer focus. Yet the brands we most admire are much more than customer-led. People never wanted to use finger gestures on black glass sheets before Apple suggested it, or to do so sitting among strangers until Starbucks invited them in. Being customer-centric once meant doing things for the sake of customers, rather than for the convenience of the provider. So a bank would open extra teller positions at lunchtime when demand is highest, instead of closing them so tellers could eat lunch. But by that measure, any successful company is already customercentric. The goal posts for true customer focus have clearly moved. The natural response has been for brands to try to raise their game. They are using digital technologies to discover more about what customers are looking for, and to retool operations to be ever more agile. But that response draws companies into repeating cycles of added investment and complexity, becoming more nuanced in customer responsiveness, without really changing the value proposition. Keeping up with the pack in this way is essential; but getting ahead is extremely difficult. To avoid these cycles, brands need a way of working smarter, not harder.

3 Defining the new customer-centric So what defines the new customer-centric? One hint is hidden in the Net Promoter Score (NPS) metric that so many companies are now using. Although it was billed as the one number you need, the NPS is actually a mix of two numbers: the promoters who advocate for your brand and the detractors who complain about it. The two have different dynamics: It often turns out that the operational improvements you take to satisfy customers and reduce detractors won t increase the promoters. If you want to work on NPS from both ends, you need a strategy to increase promoters, as well as the operational efforts to reduce detractors. That s the new customer-centric agenda; and it s about more than operational excellence, fixing the basics, and listening and responding to customers. It s about designing signature experiences that not only work brilliantly for the customer, but also bring out what makes your brand special. Why did Virgin Atlantic put its signature bar in the Upper Class cabin? Not because customers asked for one. Why get up, when they ll bring a drink to your seat? It built the bar because the company had made the effort to build a great cabin crew, and realized that customers didn t get to talk to them. The bar provides that opportunity, which customers have been keen to take up ever since. Virgin s Upper Class Wing at Heathrow builds on the same idea. It s more than a curbside check-in it s an orchestrated entrance in which you are received, and led, by an airline host. Both are terrific for the customer, not just as good experiences in themselves, but also as amplifiers of what the airline does best. It s about designing signature experiences that not only work brilliantly for the customer, but also bring out what makes your brand special. Sense Perspective 3

4 Defining the new customer-centric (cont d) And while every brand is different, there are common threads that can lead us to a new definition of customercentricity, which is about balancing both customer and company agendas. Three areas are key: 1. Customer needs What do your customers value and respond to? Are you helping them navigate the hassles they face today, and also fulfilling their higher-order needs? 2. Brand story What do you want your brand to be known for? What makes it authentic? What does it want to be and do? 3. Operational advantage What is your company inherently good at? How does it make money differently than its peers? Being customer-centric requires making the connection between all three, which is usually a cross-functional challenge and often cross-cultural as well. For instance, when the executives at Virgin Atlantic conceived its onboard bar and Upper Class Wing, they benefited from a set of strategic development groups, with teams of managers from throughout the company. The involvement of human resources and operations wasn t an afterthought; it was built in from the start. taste great individually, they are probably not a great salad together. To create an experience that works as a whole, companies need to establish guiding principles that inform each of the individual design decisions. This isn t about scripting; it isn t even about orchestrating, since nobody typically has the authority to be the conductor. It s about influencing: Inspiring those charged with creating each part of the experience from product developers to the front line with a common set of ideas, and enabling them to express those ideas in everything they do. But wait, you may be asking: Isn t that a brand-driven approach rather than customer-centric? Shouldn t customers set the agenda, and not us? Actually, we don t see any conflict. Customer-centric does not mean slavishly customer-led. The best part is that embracing guiding principles can be surprisingly liberating. It s a customercentric agenda that allows you to be yourself, to influence how customers think and act, and to play to the specific strengths of your business. That open reciprocity is the basis of many great relationships. It can help you connect in the warm and genuine way that today s customers expect. Balancing all three requires clarity about what makes you special: the unique personality your brand brings to different experiences. Without this, trying to be customercentric can be like a trip to a salad bar. It s tempting to pick each of your favorite ingredients, but while each may Sense Perspective 4

5 Orange: Creating a Customer-centric culture Orange, the Paris-based multinational telecoms operator, has a strong and well-defined brand. Its human friendliness and straightforward openness are well expressed in marketing communications. But how should this personality manifest itself on the front line when a customer calls in with a billing problem? When a distressed customer is unwilling or unable to pay a surprise $2,000 bill for roaming charges during a three-day trip to Spain? What is not just a good response, but an Orange response? To answer these questions, Lippincott helped Orange customer experience staff explore different real-life scenarios, and tease out the good, and distinctively Orange, approaches. We also helped them explore a battery of great and true customer service stories from other sectors, and identify those that best represented what Orange was about. All the stories provided great responses to real customer needs, and the comparison helped isolate distinctive Orange character and priorities. Then we distilled simple customer relations principles, which have provided practical guidance themselves, and more broadly have established the consciousness about good + Orange as two essential and complementary goals. Animated videos illustrating the principles help managers and staff to think differently about their role with customers. As the organization has embraced the good + Orange logic, the guides have been translated into multiple languages, as well as into internal practices for hiring and developing customer-facing staff. Sense Perspective 5

6 British Gas: Customer-centricity in unexpected places British Gas supplies energy to 12 million households in the UK. In an industry that s mistrusted by customers and the media and used as a punching bag by politicians, the company promised in 2012 to become simpler, fairer and more transparent. How would customers see the difference? There are not so many interactions with your energy supplier, making the bill a crucial communications tool. And British Gas mails 43 million of them every year. A bill may seem too functional and uninspiring to provide a real expression of your brand. It s just a demand for money, right? But what if it were designed around the questions that customers really have? What if customers begin to feel a real benefit from higher engagement that they can actually understand and influence what s going on? What if they start to feel like this big, largely invisible company is actually on their side? We worked with British Gas to redesign their energy bill around five core customer questions: What do I owe? When do I have to pay? What if I have a problem? Can I save some money? And where do I go for help? Much of the content of the existing bill, accumulated over time, simply did not contribute to answering these questions. So out it went. And in came new content, particularly on saving money and energy with British Gas taking a lead in familiarizing customers with energy usage, how to track it and how to control it. The resulting bill is intuitive, and customers love it. But they never asked for it. As one customer tweeted, Who d have thought your gas bill would be an infographic? Sense Perspective 6

7 Starbucks: Creating new connections Starbucks has spent the past 40 years building trust and genuine moments of connection in its coffee houses. The company has a long history with the new customer-centricity. While we have almost limitless choice and control of what we order, it s Starbucks that introduced us to the language we use and the third space we spend time in. Starbucks doesn t just anticipate and respond to customers needs; it promises to celebrate every customer s individual needs, every day providing a place that fulfills the craving for human connection. Taking these customerbased starting points and driving them through to such a passionate, mission-driven response creates an experience that is both customer-centric and highly proprietary. As Starbucks looks ahead to the next 40 years, it sees a future that is broader than coffee and the coffee house. How to create that same distinctive experience across a broader set of customer needs and environments? We worked with Starbucks to renew the expression of the brand, to keep the customer experience fresh but distinctive, with vitality and flexibility across drinks and food, and outside the coffee house across stores, home and mobile. A world of new styles, materials and behaviors is designed to broaden and enrich the Starbucks experience, making it more interesting and dynamic for customers and challenging for competitors to copy. The core idea, moments of connection, is interpreted through five guiding principles, ensuring this new diversity reinforces what makes Starbucks special. Sense Perspective 7

8 Summary What do these examples share in common? It s the understanding that people s connection with brands depends on mutual respect, admiration, even love. (And isn t that true of every good relationship?) Seen in these human terms, customer centricity is about not being arrogant and selfish. But equally, the point is not to be servile, but to be yourself. For some brands, that means being charming or witty; for others, caring and compassionate. The right answer is driven by your brand personality, as well as your operations. About Lippincott Lippincott is a leading brand strategy and design firm. We uniquely combine business-based strategic thinking and creative excellence to solve the most complex challenges facing corporations today. As pioneers of corporate identity 70 years ago, we have been behind some of the world s most iconic brands and partner with today s leaders as they shape their brands for the future. author Simon Glynn Senior Partner, Strategy Lippincott, a division of Oliver Wyman, Inc. NEW YORK BOSTON SAN FRANCISCO LONDON PARIS HONG KONG SÃO PAULO

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