It strikes me that organisations can take a big step forwards in becoming customer centric simply by measuring, reporting and talking about the impact of their actions on customers and the value that customers represent to the business.
Allow me to illustrate this by using a consulting experience at a brand name telco. One of the things that really matters to customers is how easily, quickly, effortlessly, conveniently they can get a replaced handset if they have an issue with their existing handset. The functional department that is charged with this task is the Device Logistics.
What do you think the focus of the typical Device Logistics function is? The focus of the function is, typically, on devices, operating cost and service levels. As a result management talk about and measure the no of devices that needed to be shipped, no of devices on back order, lead time between ordering and receiving handsets, no of devices shipped, no of devices delivered to the customer address within the SLA, productivity and cost of operations.
Not once did I hear conversations about customers, nor the impact of policy and practices on the customer’s life or attitude towards the company.
Now imagine thinking about the Device Logistics function in terms of impact on customers. If such an approach was taken then management would be measuring and talking about the following types of matters:
- How many of our customers have been impacted by our delivery process in the last month?
- How many customers have we lost as a result of our policies and practices?
- How much revenue, profit, lifetime value has walked out of the door as a result of these policies and practices?
- What kinds of customers – Gold, Silver, Bronze, Young, Professional, Older – are we losing?
- What will it cost the business to replace these customers with new customers so as to replace the revenue, profits and lifetime value that has walked out of the door?
- How many potential new customers have we lost as a result of the bad word of mouth from existing customers who have been disappointed by us?
- What is the cost associated with this bad word of mouth?
- How many customers ended up calling the contact centre to ask questions and/or make complaints about the handset replacement process?
- What cost did the business incur in dealing with these customers – their questions, their complaints?
- How many hours did customers spend waiting for us, at home, to receive their replacement handsets? What is the cost to our customers of this waiting?
- How can we do away with the biggest cost and inconvenience – making them staying at home all day – we impose on our customers?
- What would be the impact on customer retention, customer loyalty, as a result of designing the handset replacement process from a customer perspective?
- How can we engage our customers in the handset replacement process so that we all come out as winners?
Thinking in terms of customers and impact on customers – in terms of customer satisfaction, customer retention, customer loyalty, word of mouth, brand reputation – can be applied to every single function that touches the customer.
My assertion is that organisations will only make the transition towards becoming customer centred, designing and delivering better customer experiences, when the organisation as a whole and silo’s in particular think about operations in customer terms. Specifically, the impact of operational practices on customer retention, customer loyalty and word of mouth.
What do you think? Have you seen this in practice? If so where?