How to be customer-first, for real

There are many benefits that come from customer loyalty: increased business, renewal rates, churn reduction, referrals, brand awareness, and many more. Because there is a direct correlation between customers and revenue, most companies end up focusing on the outcome (revenue) at the expense of the input (customers). Businesses want to reap the rewards and end up losing sight of what really generates them. This comes with risks -potentially missing if customers’ needs change or if new, more compelling propositions appear- and can lead to losing customers and, therefore, the revenue they generate.

Many organisations claim to be customer-first, and yet very few are. Most of them understand that without customers, there is no business. Yet, their structure or strategy impairs their ability to materialise these good intentions, and they end up treating customers as a necessity to drive revenue. To be truly customer-first, it is essential to have the board’s and the CEO’s support and a tailored strategy that puts the customers’ needs on top. But most importantly, it requires adjusting the company mindset and embedding this principle into the core of its culture.

People who have worked in inherently customer-focused teams -such as Developer Relations, Customer Success, Support, Enablement or User Experience- may have perceived misalignment with their organisation. They can’t realistically measure customer success with revenue-focused metrics. Yet many companies have Customer Success teams reporting to the Sales organization and measured by revenue-related metrics. In the case of Developer Relations, there is an eternal debate about whether it should sit under Marketing or Engineering. This friction is not due to the organisational structure per se but to a lack of genuine customer focus in the company. All teams, including Marketing and Sales, should be customer-first and use not only revenue-focused metrics but, more importantly, customer-focused metrics.

A customer-obsessed company: Amazon

Customer obsession is the most important cultural value or “Leadership Principle” at Amazon, meaning that the customer experience is not a responsibility owned by a specific team or subset of teams. Having a customer-first value as a company principle means that every employee must act accordingly. In practice, employees at any level and role question how their ideas and decisions would affect customers before they start implementing them.

Jeff Bezos said, “Good intentions never work; you need good mechanisms to make anything happen”, and so Amazon uses the “Working Backwards” framework, which helps ensure that the customer is always the priority for everyone in the company. The first stage of this method is to “listen”: an opportunity to examine what you know about your customer and reflect on the voices heard and those unheard. The following four stages continue to keep the customer at the centre, “define” the customer opportunity, “invent” a proposed solution, “refine” focusing on the customer experience and benefits, and “test and iterate”. Today, “Working Backwards” is not just a mechanism; it is rooted in the company culture and day-to-day operations.

Consequences of not putting customers first: J.C. Penney

In 2011, Ron Johnson, who had previously overseen Apple’s retail strategy, became the CEO of J.C. Penney (JCP), a century-old American department store. While his intentions were good, many of his decisions ignored -and even went against- the expectations of their existing customer base. The most (in)famous was the decision to eliminate the regular sales and discounts for a new “Fair and Square” pricing strategy that offered everyday low prices. What Johnson’s new strategy missed was that JCP’s customer base loved the idea of a bargain. A reduced price was why they shopped at JCP. So, even though they would end up paying the same amount, this strategy was vastly unpopular. JCP struggled to recover the trust of their customers, who felt that the company had changed a fundamental part of the JCP brand without considering them.

What can companies do to become customer-first?

There are many ways to become a genuinely customer-first company and reap the benefits. However, success requires an understanding that this is not a project since it cannot be time-bound. Rather, it is a transformation of the company’s essence and operating model to ensure everyone focuses on the customers’ success. Once there is buy-in from the board, companies can start tailoring their strategy (including identifying and establishing a customer-focused measurement framework) and making the necessary adjustments, which can include:

• Revisit your customer journey (make a priority to define one if you don’t have it!). This journey should be comprehensive, from the first exposure to your brand to the continued engagement with your products and services over time. Companies often have disconnected customer journeys, usually reflecting the company’s structure, which creates a fragmented customer experience. For example, separate Marketing and Sales funnels, where leads are thrown over the wall in bulk, or pre-sales and post-sales disconnected experiences, often leaving an engagement gap between sale and renewal. Ideally, the company should have defined one shared customer journey, of which different functions can develop specific parts in more detail as needed.

• Change the subject to the customer in everything the company does. This change requires a mind shift that requires practice, so try to make changes as you see opportunities, but be relentless at implementing this approach in everything the company does. As an example, companies often define a sales funnel focused on how to sell to customers. Switching to a buyer or conversion funnel will help you focus on their motivations (instead of yours). You can also consider learning more and even adopting the Working Backwards approach. If interested, you can read Colin Bryar and Bill Carr’s “Working Backwards” book or find more information and resources on their website.

• Hire a Chief Customer Officer who can formulate a successful customer-first strategy and who can support all functions as they adopt the new model (since everyone is responsible for customer success). The CCO role is still uncommon, which might make resourcing challenging. An alternative can be assigning these responsibilities and authority to an existing C-suite member who has an inherent inclination to put customers first.
  
  

Conclusion

In today’s increasingly customer-centric world, companies that prioritize and embed a genuine customer-first approach within their culture and operations stand to reap significant rewards. Those relying on good intentions only -or even paying mere lip service- risk erosion of trust and loyalty. Amazon stands as a paragon of customer obsession, seamlessly integrating customer needs into its everyday operations with its “Working Backwards” methodology. In contrast, the J.C. Penney case study serves as a reminder of the repercussions faced when disconnecting from customers. Ultimately, it’s a matter of priorities.