What happens when you fail to give the customer what they want?
They vote with their feet!!
Let me give you an example.
Most readers will have heard of Kodak, the company that was the most prominent name in the photo-film industry towards the end of the 1990s with a market value of $30 billion and over 140,000 employees worldwide. Its main claim to fame was for developing photographic cameras for amateur photographers that were affordable and portable, aimed at the mass market.
But from such a dominant position, the company failed to adapt to the technological advances that had brought the digital camera over 20 years earlier. The board held the belief that its customers would continue to want printed pictures more than digital pictures. As we know from history (and from our mobile phones) that vision was incorrect. Consequently Kodak failed to innovate fast enough and by the time it ceased sales of traditional film cameras in 2004, its competition had stolen a march and its losses were too great.
This is a classic example of why innovation in the workplace is so important.
If the organisation had democratised innovation rather than having a small isolated group (the board) looking at what’s happening in the market, they may have understood the impact of digital photography earlier. Boards do tend to operate looking at the bigger picture and sometimes missing the crucial details.
Customer Centricity + Innovation = Happy Customers
Customer centricity is a philosophy that puts the customer experience first in the actions and attitude of whole of your company. It is an enterprise-wide strategy that impacts more than just the products and services you provide to your customers – it puts the customer at the heart of everything your company does. From product development through to the individual steps in your customers journey, customer centricity should be at the core of all your business decisions and actions.
So this is not just a “words on paper” strategy. This needs to become embedded into the culture of your company from the Board room to the shop floor.
Tony Hsieh, the CEO of the American online shoe and clothing retailer Zappos.com summed it up when he said:
"Customer service should not be a department. It should be the entire company."
How does this connect to innovation? Consider the following:
Products are not the only thing that a customer wants. The service before, after and during a sale also impacts purchase decisions. Ask yourself the question, “Why do customers shop at expensive supermarkets rather than cheaper ones? Convenience? Choice? Brands? Or is it the EXPERIENCE!
Using the power of innovation in your business, customer engagement and experience can be modelled to be not just efficient, but excellent by democratising the challenge of CX enhancement and getting the widest possible views on customer needs, challenges and how to solve them.
To ensure the view is as wide as possible, innovation culture should be company-wide. As Tony Hsieh stated concerning Customer Service, Innovation itself should not be a department or a team, it should be the bedrock of your entire company!
Take banking for example. What differentiates Bank X from Bank Y, other than rather expensive advertising campaigns? Is it:
Interest rates on deposits? Not likely. They are all pretty much the same and unless you have millions on deposit, a quarter point here or there makes little difference.
Availability of local branches? Possibly, and it is a big issue on the news channels. But with the acceleration of digital banking, a physical presence is becoming less and less important.
Customer contact? – Definitely! This is where the banks can really score! With the advent of digital banking, there is little need to engage with your bank anymore, but when things do go wrong, or when a customer has questions, their ability to engage seamlessly with their bank is what makes a bank stand out.
Therefore your aim should be to make the customer journey simple and painless. I’m not saying that the engagement needs to be human centric, but it needs to be a slick, well-thought-out interaction process and AI is helping to drive better engagement every day.
Now this is where the power of democratised innovation can help.
If you restrict the collation of customer feedback to a customer experience function within your organisation, you can miss so much of real-life issues and experiences faced daily by your customers. The reasons for this could be many such as bias or the pre-conception of issues, but in my experience, it is the fact that a small focused CX group is too far detached from what exactly is happening on the ground. The people who know what issues the customers are facing are all the front-line staff (face-to-face, on the phone) who have daily interaction with your customer base.
By bringing some of those staff into change or strategy process not only gives first-hand views of customer feedback (you find out so much more by talking to customers rather than using feedback forms!), but being a team member allows them to input into the generation of ideas to make the customer journey better, thus providing a valuable contribution to creating the solutions.
What makes your customers buy your products and services?
Building on the banking example, what makes your customers buy your products or services?
For sure, whatever it is today will change over time as customer needs and market opportunities continually evolve.
For example, climate change and sustainability are both having an impact on many industries worldwide, not just in the direct industries such as energy, travel or manufacturing, but even in industries that don’t necessarily spring to mind in the impact space such as the banking sector.
Some of these impacts have been driven by new regulation or rising manufacturing costs from regulatory compliance on carbon emissions. But many will come from the customers themselves who are becoming increasingly aware of sustainability in the products the buy and use. Customers want to reduce their carbon footprint and therefore a business must respond to those shifting needs to ensure their products and services remain on their shopping lists.
Other influences can also impact the needs and desires of your customers. For example:
Technology is often a driver of that change, as technology is perhaps the fastest disrupter. New technology launched by your competitors can make your product less attractive such as the position that Kodak found itself in when it struggled to transition from film to digital photography and when it finally made to move, it was too late. Or it could be new technology utilized by your competitors to change the way a customer can access products e.g. online selling vs physical stores.
But technology is not the only driver. It could be the product itself not reflecting current trends that drive the need for change. A classic example of this is the story of “Sugar Puffs” breakfast cereals, once an iconic Quaker Foods brand for children. Sales plummeted in the mid-2010s as childhood obesity concerns hit the news bringing food companies under pressure to slash sugar content across their ranges. Although ingredients can be changed, using the word “sugar” in the brand name didn’t help and even though the product went through a rebranding exercise, it never recovered to its previous iconic status. Competitor brands may have had higher sugar content, but they were barely impacted by shifting customer preferences.
Examples like this underline the need to use innovation as the early warning system of your organisation.
Innovate to keep apace with changing values
Irrespective of the reason behind shifting customer values, those needs and views will definitely change over the next, say, five years as customer requirements evolve.
By building an innovation mindset into the DNA of your business, you stand a much better chance of seeing these challenges earlier as the more people you have involved in ideation, the more likely their views are going to identify what’s coming over the horizon. The early identification of change and disruption gives you the best possible chance of finding solutions to the challenges that it will produce.
A constant focus on listening to and acting on the voice and needs of the customer feeds into the ideation, development and testing of new products, services and processes. Combining Innovation with a culture of Customer Centricity helps build a loyal customer base and ensures you stay responsive to customer demands.
So ensure that your customers are at the centre of your innovation strategy. Use that wide involvement to understand customer needs, wants, pain points, and desires through market research, user feedback, and data analysis, but also through the capture of the customer interactions from customer engagement staff. Then use these insights to drive product and service development and ensure that your innovations truly address customer demands.
Take the example of Apple, who have a relentless customer focus to ensure it meets its goal of “improving people’s lives through convenient and intuitive personal electronics.” The staff in the Apple Stores, better known as Geniuses, are there to not only provide customers with advice, but are also brand ambassadors. They also capture the comments, moods and feelings of the customers on the products and services which is fed back and used in future product development, helping Apple maintain its dominant market position.
Get it wrong and the results can be devastating
I recently watched a news report on the BBC regarding the rise of abuse aimed towards customer-facing staff, not just in retail situations but across numerous industries.
Obviously, there is no situation where this kind of behaviour could be deemed acceptable in any society. However, it did get me thinking… why do people react this way? What has happened to make them so angry?
I know how frustrated I get when I am waiting “for the next operator” for ages in an IVR system queue or when I experience customer facing staff who purely go through a scripted process with the customer that does not provide a solution to the challenges that brought me to their attention in the first place.
It is situations like these that need addressing by companies, to provide a good customer experience and journey.
Customer Centricity + Innovation can help fix this. Then maybe – just maybe – that would reduce the number of instances where customer-facing staff are abused. And if so, it would provide both a better customer AND employee experience.
And remember, when thinking about your customer experience and journey, there are a couple of things to consider that should help you focus on getting it right:
Bad news travels faster than good news.
It is five times more expensive to acquire a new customer than to retain an existing one.
Conclusion
It is clear that if you want to be an organisation with the customer at the heart of everything you do, you need to gain the widest possible view of the experiences your they have and the journeys they take while engaging with your company. That’s not easy sitting in an office on the top floor of an ivory tower.
But you probably have many people in your organisation who engage with your customers daily. The staff on the checkouts know more about the feelings of your customers than the staff at head office. Also those checkout staff have the time to converse with the customers, whilst going about their daily business as usual.
As an aside, being someone who hates self checkouts, I always use the manned checkouts at supermarkets and whilst waiting in the queue I often observe the checkout staff conversing with the customers almost as friends. If there is something amiss, the checkout staff will know about it.
By democratising innovation, widening employee participation, or going one stage further and embedding an innovation culture throughout the organisation, not only do you capture customer feelings but you also gain valuable insights into the potential solutions to such challenges.
Innovation | Democratised
So finally, let me close with another business leader quote; one which resonates as to why the democratisation of innovation is an important ingredient in customer centricity:
“Everything we do starts with the customer” Mark Parker, Ex-CEO Nike (now he is a bit more focused on Mickey Mouse)
In my next few articles, I want to build on the theme of what an innovation culture can bring to customer centricity and the employee experience, setting out to unpack and explore how innovation can revolutionise your product or service development process. In subsequent articles, we will move on to look at how innovation can be used to enhance the processes you use around the business for the better from operations to business support, and how innovation changes the ways your staff work, day to day.
But for now, until the next time…
I’m sure that after reading these blogs on innovation in the workplace you will have a backpack full of questions regarding the “What and the How” of innovation and maybe feeling a bit stuck.
Never one to leave you in the lurch, I am always happy to try to have a brief chat and address your questions. Just reach out and let’s see if we can bring resolution to what is keeping you awake at night. Email me at gary@rokaboat-emea.com and let’s arrange a virtual coffee or connect with me on LinkedIn - Gary Thompson
And one other thing – I would love to hear your feedback on this article. My father had a shop and from being a child I was taught to listen to the customer, so I welcome your comments. It’s time I practiced what I preach!