2022 04 21 Cognosis Illustrations 2 Myths

Businesses know they need to put customer needs at the heart of their strategies, but very few are actually doing it right. Why? Olivia Buckle-Wright reveals five common misconceptions about customer centricity that create a gap between aspiration and success.

Customer centricity is often misunderstood and oversimplified. The casual dismissal of customer centricity as ‘stating the obvious’ or ‘just another business cliché’ can prevent robust discussion on the topic and also side-track from the very real value that it creates. For example, industry leaders in NPS deliver almost three times higher total shareholder return, compared to the stock market average. The companies that focus most on their customers have outperformed their competition over 15 years.

Research shows that 90% of companies know they should put the customer needs at the heart of their business strategy, but only 14% of business leaders are prepared to claim that their companies truly focus on the customer.

This damaging gap between aspiration and reality is caused, in part, by misinformation around customer centricity, which is often confused with customer awareness. Truly customer-centric organisations obsess about exceeding their customers’ current and future expectations. Their culture puts customer needs at the core of decision making and execution – across all functions. It becomes automatic to ask: “What next for our customers?”

Here are 5 myths about customer centricity that can make businesses overlook the opportunity in front of them:

1. Customer centricity is about doing more research

Simply asking the customer what they want is not the same as being customer centric. In fact, you may end up being told to carry on as before, rather than reaching into the future for something innovative and competitively advantageous.

Far better to observe behaviour and understand reasons. What are the pain and passion points? That’s the source of real customer insight, not answers on a survey. Data, analysis and machine learning will add their own insights, all underpinned by driven, passionate people with a curiosity and persistence to get to the right answers.

Like an annoying four-year-old, you need to keep asking ‘but why?’ until you drill down to the fundamental truth or motivation that lies deep beneath the surface.

2. Customer centricity is a job for customer experience only

There’s a temptation to see whole functions as out of scope, just because they don't touch the customer in a direct manner. In reality, some of the most intrinsic concerns hit multiple functions. Therefore, the approach to strategic planning should impact every part of the business.

Marketing will reach more eyes and ears by shifting from thinking what’s best for the company to what’s best for the customer. Finance is impacted by the annual budgeting for customer centric activity. HR and recruitment can help ensure you have people in your organisation who think with a customer-led approach. How do you grow skills? How do you manage performance? Every function needs to row in the same direction.

3. Customer centricity is a value, not a strategic driver

Too many organisations treat customer centricity as a wallpaper. They pay lip service in a value statement – and that’s where it stays, often at the bottom of a drawer. The danger is that value statements need to be minimally worded, and crafted in a pithy way, which can result in different interpretations from different parts of the organisation. Without a clear pathway, the raw potential customer centricity is then diluted and relegated to an external PR activity.

Words matter for little without action and direction. Simply plastering pictures of the customer and value statements on the wall won’t provide the answers. You need to interrogate them forensically, like a detective scrutinising the ‘crime scene wall’ of an incident room. Customer insight and customer thinking needs to drive the strategy and drive decision making.

4. Customer centricity needs more and more data

As mentioned above, customer and competitor data can be a powerful provider of insight. But more data doesn’t mean good data. Organisations can end up with mountains of data, but very few actionable insights. Too often, one part of the business will stockpile data, barring access to other functions that could put it to use. Without democratising access to data and insight across the organisation, the opportunities are lost.

Data is seen as a trophy and a tick in the box, rather than a practical means to better understanding the behaviours of customers and their unmet needs of the future. Businesses that become blinded by data are worse off than those that sit down and think for themselves.

5. Customer centricity can be solved by a Chief Customer Officer

Hiring a CCO as an advocate or champion can prove phenomenally powerful - a significant, visible step in the right direction. But it also brings the big risk that everybody else delegates responsibility. “I don’t want to step on their toes or gate-crash their party. And worse: “maybe I shouldn't be doing it, because that's their thing.”

Instead of being evangelised, customer centricity becomes even more siloed. CCOs can be a fabulous asset, but more as the voice of change, not the owner of all that needs to change, otherwise they will become overburdened with other people’s obligations. There is no silver bullet for customer centricity.

The Sustainable Growth Index by Cognosis correlates the behavioural and cultural traits of 1,400 listed companies. The companies that focus most on the customer have outperformed their competition over 15 years.

Companies that combine purpose and customer centricity see the largest gains in long-term sustainable growth. Combining a customer-centric culture with a powerful growth strategy unlocks optimised total shareholder return.

Working closely with industry-leading corporations, our consultants create bespoke and targeted action plans for building a customer-centric culture. Discover how we can help drive sustainable growth in your organisation. 

Strong leadership turns customer centricity into sustainable growth

Customer Centricity is business speak you can’t ignore

If customer centricity is comfortable, then you’re not doing it right...

To learn more about customer centricity for your business, please get in touch with Daniel Hall:

daniel.hall@cognosis.co.uk