Successful businesses as diverse as the Trader Joe’s Company, The Container Store, IKEA, The Four Seasons Hotels, Zappos Shoes, Service Masters, PrairieStone Pharmacy, Harrah’s Entertainment, ING, Harley Davidson, Baptist Healthcare, Mary Kay Cosmetics, Rackspace Storage and Patagonia have all been cited in the business press as the few in their industries worthy of the being called customer-centric companies. Only truly customer-centric companies can create a level of customer loyalty that defines a rare breed of customer—the super fan. These customers are devoted to the company in the way sports fans are to their favorite team.
Super fan customers are highest on the “loyalty ladder.”[1] Super fans have also been called, “advocates,” “confidants,” “customer-owners,” “apostle,” “brand ambassadors,” “raving fans,” or simply “highly engaged customers.” Whatever name you apply to this special group of customers, companies that create and sustain this level of customer devotion realize much higher financial returns than their competitors.
Robert Passifoff, president of Brand Keys has captured the great monetary value that comes from super fans in a principle he calls, the “Rule of Six.” Passifoff asserts, “a true advocate—you’re basically talking about your top 20% of customers—are six times more likely to buy things from you. They’re six times more likely to recommend you. They’re six times more likely to invest in you if you’re a publicly traded company. And they’re six times more likely to rebuff competitive offers, especially if they’re only based on price.”
Getting shoppers to move up the loyalty ladder to the “super fan” or “advocate” level requires that companies develop and master four customer-centric competencies:
1. Purposeful Leadership: Operate consistently with a clear set of values.
2. Employee Engagement: Align employees with the goals of the company.
3. Compelling Brand Values: Deliver on your brand promises to customers.
4. Customer Connectedness: Infuse customer insights across the company.
Companies that want to become customer experience leaders need to master four customer experience competencies. Research has shown that two-thirds want to be industry leaders in customer experience. While any company can improve portions of its customer experience, it takes more than some ambition and a few superficial changes to create lasting differentiation.
Companies that master all four competencies are customer-centric organizations which are defined as:
An organization that continuously aligns its resources with customer needs.
1. Purposeful Leadership: Operate consistently with a clear set of values.
Just about every organization has vision and mission statements floating around their hallways. But when it comes to making decisions on a day-to-day basis, these documents are no where to be found. They play No Role in how the company is actually run.
Instead, companies make decisions based on individual goals and objectives, and handful of hard metrics, and by making compromises across conflicting departmental agendas. And that’s the best case. Most times decisions aren’t coordinated at all.
That’s why organization’s need to (re) introduce a clear purpose for their organization that is more compelling than just more profits; a raison d’être that aligns the myriad of day-today decisions.
Smart Development, inc. can help companies develop this competency by:
· Crafting a compelling vision that engages employees and customers.
· Ensuring that the vision is cast and cascaded throughout the organization.
· Embedding the vision and values in the HR fabric of the company.
2. Employee Engagement: Align employees with the goals of the company.
It might seem obvious that customer experience requires a complete focus on customers. But that’s often not the correct approach. What should you focus on instead? Employees. While you can make some customers happy through brute marketing force, you can not sustain great customer experience unless your employees are brought-in to what you’re doing and are aligned with the effort.
It’s important to remember that unengaged employees don’t create engaged customers. But this is not about altruism. Employee engagement creates a success cycle.
Smart Development, inc. can help companies develop this competency by:
· Building leadership capability at every level in the organization
· Ensuring that you get a good return on your training investment
· Developing highly engaged employees.
3. Compelling Brand Values: Deliver on your brand promises to customers.
True brands are more than just marketing slogans, they’re the fabric that aligns all employees with customers in the pursuit of a common cause. John Wang, CMO of Taiwanese electronics company HTC, captured this sentiment well:
“Brand value means something to the end user. Brand recognition, all it means is a bunch of advertising to make people recognize the brand name…Building brand value is like earning respect; you have to earn respect, you cannot command respect.
To earn respect, companies need to make sure they live up to their brand value every time they interact with customers.
Companies looking to master this competency should:
· Reaffirm brand tenets
· Define clear brand promises
· Widely communicate brand values
· Keep your brand promises
4. Customer Connectedness: Infuse customer insight across the organization.
In most companies, decisions are made with woefully little customer insight. People often rely on their “gut feel” or outdated anecdotes about customer needs, desires, and feedback. But any company that wants to improve its customer experience needs to embed deep customer insights in every aspect of its operations.
Companies looking to master this competency should:
· Focus on target segments
· Build voice of the customer listening systems
· Make customer insight widely availabl
Smart Development, inc has provided management and customer service programs to customer-centric companies such as Trader Joe’s for the past nineteen years. These training programs have helped Trader Joe’s maintain its customer-centric ethos even as it expanded from 51 to 400 stores located in 30 states.
Discover the tools that will enable to build your organization into a customer-centric company by contacting us today at 323-854-1713. Evaluate your company's effectiveness in customer and employee engagement, leadership, and productivity by requesting one of our free assessments.
All the success!
Peter Mclees, Principal
P. S. Smart Development Inc. has an exceptional track record helping restaurants, stores and other businesses create a strong culture, leadership bench strength and the teamwork necessary for growth. Having worked with several companies throughout their growth cycle, we have valuable insights and strategies that would help any late stage startup, small or medium sized company achieve sustained growth and prosperity.
1. The “ladder of customer loyalty” talks about the different types of customers a company encounters. There are five steps in this ladder. Starting with: Suspect: A suspect is someone who comes across your companies’ promotion. They are a potential suspect for your company. Prospect: If the person is interested in your promotion they become a potential prospect. Customers: A customer is someone who purchases either your product or service. Clients: Clients are those who come back to you. Advocates Promotes your business on your behalf. They are so happy about your product/service that they tell others.
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