Innovating with a Customer-Centric Focus

leo-bartch-cohort-7By Leo Bartsch, current student of the University of Sydney Business School MBA program

In a time when new crazy ideas seem to explode each week, thinking about the customer seems to be taking a back seat behind the shiny lights of disruptive innovation. Is customer-centric design worth looking into in a business? Or is it outmoded by big data and better algorithms?

At the most recent BOSS Emerging Leaders event, Innovating with a Customer-Centric Focus, these questions and more were answered. Hosted by Professor Guy Ford, Director of the MBA Progam, the speakers were Chris Severn of The Customer Experience Company, Erietta Sapounakis of Telstra, and Monique Rappell of the Australian Broadcasting Company. I spend a lot of time analysing my customer’s experiences, so I was really excited coming into the event to see how specialists from big corporates with the resources of Telstra and the ABC, as well as an expert with a more holistic view think about their customers.

So what is customer-centric innovation?
Chris believes the heart and soul of successful innovation is the customer, and that the heart and soul of the customer hasn’t changed for thousands of years. The experience is what truly matters to the customer. For Monique, another essential ingredient is empathy, finding a way to bridge the gap and truly understand the customer’s journey in their shoes.  Erietta tied both concepts together with empowerment, giving your people the right tools, processes and autonomy to give the customer the experience they are looking for.

What are the benefits of designing this way?
The speakers had many examples of huge improvements after switching to a more customer centric approach – not only in customer satisfaction, but in revenue!

Chris shared a story at a bank, where the service team was trained in how their products could help customers, and suddenly sales skyrocketed through the service centre! Changing a culture where sales had become a dirty word was difficult, but once the bridge was crossed, revenues increased.

Small business owners were clients of Monique’s bank, and had problems understanding the products on offer because the bank had made them too granular. Customers had a massive range of products to choose from, but didn’t have the time or knowledge to know which products were relevant for them. The bank tried to consolidate their offering, but struggled to improve things for their customers. In the end, the solution came from their own team, where a banker had built his own system to support his customers. They took the solution, found ways to scale it up, and saw a 400% increase in profits in 6 months.

What barriers are there to change?
Many companies are risk averse, and the bigger they are, the harder it is to effect change. There can be a cultural disregard for customer centric thinking, even in our language about the customer. For instance, the insurance industry often refers to the customer as “risks in force” – a term which doesn’t promote empathy for the customer.

Monique was involved in fixing a banking verification system, which came about because the CFO of the bank couldn’t get past the verification process in order to solve his account becoming suspended. Only once the customer’s struggle was highlighted at the highest level, was there enough drive to push for a solution. They looked at their process, and rebuilt it with empathy for what the customer was trying to do, and then worked from there towards an effective solution.

How do we make the change?
Use applied empathy to understand the customer’s journey. Get close to customers and reflect on their problem. Make the customer heard, even if it’s in a room with the CEO. Take decision makers on an experience safari.

Changing a risk averse culture
In Monique’s experience, large transformations don’t work in a risk averse environment. Breaking it up into smaller chunks of small wins allows you to consistently and frequently demonstrate success, which is important because risk averse decision makers need evidence in order to proceed with change. To succeed, decision makers also have to be able to accept that solutions can come from customers.

Erietta stressed the absolute necessity that there is a base of evidence. If the audience is resistant to the evidence you give them, find a different medium. For example, if they don’t easily assimilate customer feedback, use a review of a competitor’s related product or service.

Chris’s advice was to avoid attempting fail fast methods in a risk averse environment. Rather aim to learn quickly, by doing things like paper prototyping to rapidly iterate through ideas.

Is data the answer?
All three speakers felt strongly that while data could provide some insights or hint at problems, it can’t impart true understanding. The need for true empathy with customers means understanding them on a personal level, and not just numbers on a screen.

Final thoughts
What’s clear from this discussion is the immense benefit to the bottom line when successfully designing from the customer’s perspective. From established banks suddenly seeing 400% increases in profit in a division, to customer satisfaction swings of 60% in a call centre, to service teams suddenly turning from a cost centre to a profit centre. Chris shared this quote by Walt Disney which I think truly sums up a customer centric focus: “do what you do so well they people come back and bring their friends.”

If you reflect on your organisation’s interaction with your customers, do you think they’ll come back with their friends?

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