Everyone espouses a customer-first ethos. Every market, every geographical region, every vertical, every tier of the market would say they are customer-driven.
Frankly, this is a lot of hot air. It’s often said but rarely is it lived within the organisations.
There is a fair amount of confusion over just what makes a great customer-driven organisation. In the 90’s, Treacy and Wiersema created the Value Disciplines: Customer Intimacy, Product Innovation, and Operational Excellence. They believed that every organisation needed to be good at all three disciplines and excel at one of them to give them a point of difference.
We’ve come a long way from the 90’s, and we propose a fourth discipline – Technology Mastery. Today, technology drives so much value (or destroys value when done wrong) that it has earned its own place. For some, this has added to the confusion regarding what it means to have a customer-driven focus.
For example, AirBnB and Uber are both used in thousands of articles and keynotes as shining examples of a customer-focused business model. They are not. They are amazing technological platforms that have changed the way the population consumes accommodation and transportation. As businesses they excel in Technology Mastery, not Customer Intimacy. They rely on their hosts and drivers to be customer-driven, with very little control over whether they are or not.
So what do the very few, very brave organisations that truly have a customer-driven ethos do differently? Our research and experience suggest that there are six obsessions common to customer-driven organisations that make them stand out from the crowd, lead the pack and maintain a sustainable competitive advantage.
- They See the Unseen.
They look past the surface to gain a deep understanding of customer insights, pain points that require solutions, latent needs, and view with an open mind the unconscious truths that those in the industry are often too close to see. They use this insight to bring new trends to the industry. They learn what the market needs and build a solution – instead of building a solution and searching for the problem. And they build a solution for the customer, not a solution to their own operational shortcomings. Apple’s first iPhone is a prime example. Apple had already revolutionized personal computers and music devices, and their understanding of the consumer market led to a total game-changer in the way the world views phones.
- They Focus on Two Inches.
Their focus into markets they serve is “two inches wide and two miles deep.” They know where they add most value by having a super narrow focus into core verticals with incredible depth of domain knowledge in those markets. This knowledge allows them to deliver more value as the trusted expert in the domain and allows them to invest more in bringing innovation into their specialised market. This precise, narrow focus and expert stance earns them a solid, differentiated place in the market.
- They Play the Long Game.
They understand customer lifetime value. They know that building long ultimately pays higher dividends. Having a longer view means not sacrificing long-term customer value for the sake of quarterly earnings targets. The best PE players in the market grasp this and because they are private can focus on the mid- to long-term instead of concentrating on short-term earnings announcements.
- They Look Inside First.
They make sure the customer is placed to be the focus of everything internally – research, engineering, production, marketing, client services, operations – making any changes to work practices to emphasize the customer. They have a procedure for sharing customer stories (good and bad, as there is much to be learned from both). At every meeting, the customer is the first item on the agenda. They make customer focus a strategy, and then they make it a value. If a company’s value is similar to “We only win when our clients win” it lays the foundation for how services are built and delivered on what is best for the customer.
- They Short Time.
They get rid of old time-consuming ways and make it easy for customers to do business with them. Increasing efficiency and decreasing the time it takes to accomplish things means the customer has more of their most valuable commodity: time. They remove outdated processes and use current technology. They have actual humans available to speak to instead of getting stuck in an automated circle. Overall, they make life easier for their customers.
- They Hand Over Power to the People.
They give their team everything they could need to deliver above and beyond to the customer. They give their team a purpose, autonomy, power and mastery. They remove obstacles – and then get out of the way themselves. There is a great story of an independent retail service company that ran all the multinational and franchise competitors out of town. How? By giving every staff member autonomy to fix any problem for any customer without needing authorisation, even if it meant replacing all the work that was just done. Surprisingly, the cost of remedial work went down. Customers got immediate results that were particular to their needs, staff were empowered with purpose and authority, and business soared.
Practicing these Six Obsessions is not easy. It takes bravery, discipline and careful planning. When done right, it can propel organisations forward. The result of investing extra effort is happy and loyal customers, employees, leaders, and ultimately shareholders.
In this hyper competitive world, it is amazing that so few organisations make these Six Obsessions a priority. Taking on the challenge to focus on these six areas results in clear market differentiation and claiming some white space in the market.
Are you up for it?