Most firms nowadays are obsessed with customer experience. Covid-19 has pushed us into using online services more often, especially during confinement.
However, now more than ever, individuals demand first-rate, personalised, digital experiences with user-friendly interfaces that allow quick and efficient exchanges. It’s true that having the best supporting technology is important, but becoming customer-centric goes beyond digital transformation.
With the customer firmly in the driver’s seat, businesses need to focus on how to build and nurture relationships with potential and existing customers, focusing on instigating unique experiences that feel tailored for them.
So, why is customer-centricity essential in business? We asked Armin Prljaca, Human-Centered and Innovation Designer from the PwC Luxembourg’s Experience Center.
1. Why is customer-centric transformation growing in importance for businesses?
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First, let's look at the story behind the term. Customer-centric transformation has been gaining traction for some time now. This trend is mainly driven by big tech companies, such as Apple and Amazon, who built their organisations around customer needs. We consider these companies to be customer-centric. However, customer-centric transformation refers to a shift from traditional organisational design, focused on functions and departments, to one focused on customer journeys (a holistic representation of customers’ touchpoints with a brand) and key experience moments (make or break moments in customer experience).
Another key driver of customer-centric transformation is a shift in strategy from competitor centric to customer-centric. Why is this important? Because competitor-centric organisations mimic their peers without really trying to understand the underlying causes of their failure or success. This strategy has worked well in the past, however in the internet age, customers (whether they are consumers or B2B businesses) crave unique experiences that feel tailor made and evolve with their needs. The internet has made it possible to understand customers better than ever before, allowing organisations to forge deep and meaningful relationships that could be easily monetised and difficult to mimic. Looking from the strategic perspective, customer experience builds strong moats in the market, which is invaluable both to incumbents and upstarts in the field.
2. Armin, you worked with a leading asset and investment management company in Latin America. How did you help them set off on their customer-centric transformation journey?
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As designers, whenever we are brought to the executive table, we always start with Why?. We work together to boil down our purpose to a single declarative sentence, which we call Winning Aspiration. That is, how does winning look like for us? If we’d to win, and lead the segments in which we are present, what difference would that make? What is it that we aspire to do? After careful consideration, one of our clients decided to focus on becoming the “most customer-centric investment manager in Latin America”.
Once we knew what our aspiration is, it was easy to transform. Whenever we approached an issue, we asked ourselves, will this get us closer to what we aspire to achieve? And most of the time, the answer was no. That made us realise that customer-centricity is not only about the things you do, but equally important, it's about the things which you choose not to do.
So we chose to focus on understanding our customers. We interviewed them all over Latin America, across different segments and industries. We were not searching for a solution, but rather we looked for problems to be solved. Then, we drafted personas (a sample set of people with shared needs and pain points) that we socialized with the whole organization. Armed with deep knowledge of their needs, wants and pain-points, we set out to transform.
A few major shifts took place. First, we started referring to customers as partners, as we focused on building relationships that go beyond transactional needs and evolve into partnerships where we can mutually support each other to succeed. This is especially important in the fund industry where a set of strategic choices are commoditized. Second, we reorganise internally around customer journeys, rather than around classic functions. For example, instead of having a team only producing marketing materials, now we have one team per journey, say wealth management, which consists of many different functions, including marketing, that now delivers one seamless experience. They remain close to partners, through regular interviews and focus groups, to keep improving the customer experience. Lastly, there was a shift in the executive committee where they don't think of products and services anymore, but rather about solutions that address customer needs and pain points. This is by far the most difficult shift for any Investment Manager to make, as they mostly pride themselves on having the best product in its asset class.
3. How did the company manage the transformation process and what made it so successful?
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Once we had our winning aspiration set out, it was a matter of the executive committee allocating resources and amplifying the message to the max. Customer-centricity was to become the core of everything the company does, and a strong tone at the top made that clear from the beginning. Once we had the buy-in, we moved on from why are we doing this to what we need to do:
Or shall I say, partner focus. By chipping away everything that does not add value to them, we were left with a value proposition that was everything they’ve wanted. That is, it addressed all of their needs and wants, pain- and gain-points. The new value proposition allowed both the customer and the company to be centered on the problems to be solved, rather than products to be pushed. We enabled this behaviour thanks to:
We were faced with the double challenge of working in a different culture and having to do so remotely as lockdown struck half-way through the project. Nonetheless, we took this opportunity to introduce new digital tools that enabled this company’s employees to truly understand and connect with their customers. They created personas (an artifact representing a group of clients with shared needs and pain-points), which helped them to empathise and create solutions in an iterative manner. Since teams were self-guided and semi-autonomous, they took decisions based on client feedback and business impact, rather than competitor moves or industry trends. This allowed them to quickly monetise the transformation effort and reinvest for future success.
4. What recommendations can you give businesses that want to transform into a customer-centric organisation?
As Simon Sinek says, “Start With Why”. It sounds simple, but more often than not, inside organisations we see that their winning aspiration is not clear, or at least not properly diffused across teams. It's important to take a moment and reassess, why do we think the way we do? Equally important, what for? You will quickly arrive at a conclusion that we exist to serve our customers. Then it would only make sense that if you are to transform your business - make it a customer- centric business. Therefore, I should say start with the customer.