How HR Can Create a Customer-Centric Culture
The business case for customer-centricity is clear. Organizations with customer-centric cultures are 60% more profitable, and 90% of organizations state that they compete on customer experience alone. HR is often tasked to incorporate customer-centricity into organizational values, onboarding, and training, yet often these initiatives fail to bring real change toward a customer-centric DNA.
In this article, we explore the role of HR in creating an authentic customer-centric culture.
Contents
What is a customer-centric culture?
How are customer-centric organizations different?
What are the stumbling blocks to moving towards a customer-centric culture?
The role of HR in creating a customer-centric culture and mindset
How can HR start building customer-centric culture?
What is a customer-centric culture?
Gartner defines customer-centricity as the ability of people in an organization to show empathy with the customer and understand their situations, perceptions, and expectations.
Customer-centric organizations often operate from an outside-in perspective, with each decision being informed by a deep understanding of the needs and desires of the customer. All activities revolve around the customer, and success is measured through metrics such as customer satisfaction, loyalty, and experience.
Zappos, Starbucks, and AirBnB are often used as examples of organizations with customer-centric cultures, given how they have incorporated the customer into everyday practices.
Another great example is Ritz Carlton, which provides employees $2,000 per incident to solve customer problems without getting approval from a supervisor. Similarly, Pret-a-Manger, the coffee and sandwich shop chain, requires employees to give away free food to customers based on their discretion. The goal of this activity is not only to satisfy customers but also to empower employees to take ownership of the customer experience.
How are customer-centric organizations different?
Traditionally, organizations tended to be product-centric. A product-centric organization operates from a more internally focused perspective with a clear focus on product features, benefits, and positioning. This does not imply that they do not consider the customer, but often they do so through the lens of their product. A prime example is Apple and Google, which often drive innovation by improving product features and bringing something new to the customer.
There are some significant differences in approach between customer and product-centric organizations:
Product-centric Customer-centric We sell products that we will sell to whoever will buy What we do We serve the customer and build products a specific customer wants Transaction-focused How we engage as a business Relationship-based We highlight product features and advantages How we position in the market We show how our product meets the needs of a customer Product lines, product managers, product sales teams How we are designed? Customer centers, client relationship managers, sales teams Number of new products, profitability per product, and market share What we measure as success Share of wallet of customers, customer satisfaction How many customers can we sell this product to? How do we approach selling? How many products can we sell to this customer?
Both types of organizations have benefits and limitations, and it is important to be aware of what they are.
Product-centric companies can become far removed from the customer and build new features that are interesting but not necessarily aligned with a specific customer need. Customer-centric organizations, on the other hand, potentially lag in innovation. They can become reactive as they spend all their resources meeting customers’ current needs.
We believe a healthy balance of both perspectives is required, yet the transition to becoming customer-centric remains challenging.
What are the stumbling blocks to moving towards a customer-centric culture?
When transitioning from a product to a customer-centric culture, we find three main stumbling blocks:
1. Organizational siloes and organizational design
Organizations tend to be structured around functional departments and areas of expertise. While this allows the organization to operate efficiently, it’s often a barrier to a holistic customer experience once the business grows. Take a look at the example below:
“Peter has just taken out a home loan with his bank. Even though he has been banking with Bank ABC for ten years, he had to submit all his information, go through the required credit checks and provide new authorization to work with the Home Loan division as they are not able to use the data from the retail division. Peter is frustrated and feels the bank does not understand him as a customer.”
2. The measures of success that the organization celebrates
The old saying “you get what you measure” is true in the case of customer-centricity. Often, the metrics organizations hold people accountable for in terms of performance drive counterintuitive behavior that contradicts the philosophy of customer first.
This is not always done intentionally, yet we do need to become more aware of the unintended consequences of these measures. Let’s make it practical through an example:
“Susan is working in a call center. Her performance is measured by how many calls she closes in an hour. As Susan is measured on the number of calls closed, if a customer phones in with multiple queries, this still only counts as one call, which has led towards an unofficial agreement that call center agents tend to drop the call after the first query, forcing the client to phone back. When they answer and help that customer again, this counts as another call.”
There is a famous example of a Zappos customer service consultant who spent hours on the phone with one of their clients to help them resolve an issue. The Zappos team celebrated the customer service consultant as they did everything they could to help that one customer. For them, it was all about the experience and not about efficiency.
3. The decision-making structure is not close to the customer
Organizations often lose touch with the customer as they grow and scale. As structures and controls are required to grow the business, often, the key decision-makers become removed from the real needs of the customer. Especially as organizations explore new products and markets, these decision-makers are not really the people that interact with the customers on a regular basis.
If not kept in check, organizations have a tendency to disempower their front-line employees. A prime example is when dealing with a customer complaint. The customer continuously gets escalated to the next person higher up the hierarchy, who has the authority to make the decisions required to resolve the issue.
Addressing these barriers and embracing customer centricity as a core value and culture is a key priority for HR. However, HR’s role is often not clearly identified in this journey, resulting in a reactive approach that leads to limited value.
The role of HR in creating a customer-centric culture and mindset
We can describe the role of HR in driving customer centricity in four key priorities:
Let’s look at them in more detail.
Mindset: Guiding employees on how to think about the customer
HR is critical in creating a customer-centric mindset within the organization. This implies that employees have a thorough understanding of:
- who the customer is,
- what their needs are,
- and how the organizational product or services are solving these needs.
This starts with aligning the leadership team on what a successful customer experience looks like and ensuring that employees are empowered to act in the best interest of the customer. In practice, it also means that employees are able to “step into the shoes” of the customer and understand things from their perspective.
Skill set: Providing employees with the knowledge and skills to focus on the customer
HR also needs to play a role in building the knowledge and skills required to create a great customer experience. These include:
- Technical skills, such as knowledge of products, services, and systems
- Behavioral traits, such as empathy, communication, and decision-making skills
Practically, this starts by designing jobs and activities in a customer-centric way and developing employees to be proficient in some of the skills mentioned above.
We talked about how HR can instill customer-centricity into an organization with Claire Bonefant, Country Director at SThree, a global staffing organization specializing in STEM talent. Bonefant describes how they transformed their business into a customer-centric company.
See the full interview below:
Toolset: Giving employees the enabling tools to drive a customer-centric experience.
The toolset category refers to the day-to-day processes, technologies, and platforms employees utilize when dealing with the customer. Customer insight and data are essential.
Organizations need to enable employees to understand the customer in the moment, have the authority to solve their problems, build a relationship with the customer, and trust the tools available to solve the customer’s need. Often, employees are dealing with legacy systems or working across multiple platforms, which is not conducive to serving the customer.
Heartset: Enabling employees to understand the impact and value we bring to the customer.
Lastly, HR needs to instill a “heartset” of a customer-centric strategy. This relates to helping employees see the impact and difference they make to the customer’s life. Closely connected is helping employees understand the business purpose and demonstrating how the work they do matters in the lives of the customers they engage with.
Practically, this often happens through sharing customer stories, making customers visible, and demonstrating the impact of organizational products and services.
If you feel really empowered to deliver on the company mission and purpose, then you will deliver a great experience to your client and candidates, and you will only be able to do that if you feel trusted. If people felt trusted and felt they could really deploy their talent and they could really be themself at work, then they would positively impact customer experience.
Claire Bonefant, Country Director at SThree, a global staffing organization for STEM talent
These four categories, mindset, skill set, toolset, and heartset, all contribute in different ways to establishing an organizational culture with the customer in the center. In isolation, they all add value, but these four domains must work together to create real customer centricity.
So where do we, as HR, start, and how can we practically align the mindset, skill set, toolset, and heartset?
How can HR start building customer-centric culture?
There are a number of actions HR can take to start transforming their business into a customer-centric company. We divide them into actions focused on building mindset and heartset, and efforts focused on building skill set and toolset.
What does this mean in practice?
To build mindset and heartset
| What can we do? | How do we do it? |
| Create a shared vision around the customer | Create a clear vision of why we matter to the customer. What problem or need is the organization addressing, and how does it impact the customer’s life? Specifically, we need to articulate how we want the customer to “think”, “feel”, and “act” when we engage and align our efforts accordingly. Example: Starbucks talks about the “last ten feet” as core to their customer experience and builds many of their in-store experiences based on these principles. This translates into the “writing of the name on the cup”, “getting to know who the regulars are”, and becoming part of the daily routine of the customer. These behaviors are embedded in how employees are measured and trained and are incorporated into the company values. |
| Create a deep understanding of who the customer is | Customer personas are an excellent way for employees to understand the target markets. Make customers real by building data-driven profiles that help employees understand the customer as human beings. Educate employees on these profiles and make them visible. Example: A global bank takes all employees through a “Who is our customer” orientation as part of onboarding and requires them to spend time with actual customers to understand the experience. |
| Bring the customer into every conversation | Find ways to bring the customer into every conversation by instilling habits that make them top of mind. Example: A financial retailer has painted their 5 customer personas, e.g., Thembi, on their boardroom wall to ensure that every conversation links back to the customer. They have also included a habit of asking, “Was this decision good for Thembi?” Managers are trained to include this question when doing business reviews or running team meetings. |
| Empower employees to act on behalf of the customer | Empower employees to make in-the-moment decisions when dealing with customers. According to Claire Bonefant from SThree, employees “have to be empowered to also have the agency to change things, or to give suggestions and to provide input, and that it actually gets actioned.” Example: American Airlines gives flight attendants the power to give customers complimentary miles on the spot if there is an issue with their flights. As part of their training, they are provided with guidelines on when to apply their discretion. |
| Listen to the customer voice and make those insights tangible | Help implement mechanisms to allow employees to hear what the customer is saying by using different data collection channels. Example: A call center displays customer feedback to all employees and summarizes main sentiments to discuss on a monthly basis. These sentiments are used as part of performance and development feedback and act as a basis for designing future training programs. |
| Tell customer stories | Find stories of the impact of the organization on the life of customers and share those with employees in an authentic manner. Claire Bonefant shares: “The vast majority of people want to be proud of what they do. So if you touch into that and you explain to them that your aim is to help them to be prouder of the work they deliver to customers, then it’s easier for them to connect.” Example: An insurance business actively interviews and collects customer stories which they use internally to help employees understand their impact. HR uses these stories as part of internal communication and culture campaigns. |
| Connect CX and EX | Align your customer journeys and your employee life cycle design. This can be done by using the customer experience as the starting point to design your employee experiences. Example: A retailer measures CX and EX together and aims to find alignment between the “moments that matter” to customers and how to turn those into “moments of value” for employees. |
| Make employees customers | If appropriate, let your employees experience your products and services by becoming customers themselves. Example: A clothing retailer provides their employees with store discounts for their products. |
To build skill set and toolset:
| What can we do? | How do we do it? |
| Design processes and jobs in a customer-centric way | Ensure that customer journeys become a key part of your organizational design, and that internal processes are customer-focused. Breaking down traditional functional teams to collaborate on a customer-specific process is a good start. Example: A health business has changed their internal design to be aligned with the life cycle of the customer as opposed to an internal functional process. |
| Reward the right behavior | Ensure that rewards and recognition are aligned with factors that are important to the customer. Example: A UK bank has included customer-focused measures of success for all call center agents and did away with metrics that measure factors unrelated to the customer. |
| Enable employees with the right tools and technologies | Ensure that the line of business technologies enables employees to act in the best interest of the customer. Example: A financial provider has integrated systems to enable employees to have one view of the customer when interacting with them across all products. |
| Ingrain CX into the employee life cycle | The CX mindset can be infused into every step of the employee life cycle, ensuring that the customer touch point is clearly included in general HR activities. Example: Including CX training in onboarding, customer feedback in performance management, and customer interaction in employee engagement strategies. |
Wrapping up
Organizations that are able to authentically transition to a customer-centric culture will reap the benefits in the future. HR has a pivotal role to play in driving authentic transformation by driving the mindset, heartset, skill set, and toolset required for success.
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