5 core competencies of the customer centric company

As Peter Drucker said, the purpose of any business is to create and retain customers.?

Almost every company has in their mission statement , on the web-site? and on the? management? board? presentation? that they are customer centric one. But it is a tricky question to answer what it means to be? realy? customer centric company. Is it about calculating NPS of Customer Effort score? Is it about the customer listening path or starting development from the customer needs and pains analysing? ? Being customer centric means to put the customer at the centre of the key decision making process.? All three dimensions of the business model ( value creation, value delivery and value capture)? should be riddled with customer centricity.? In our daily practice in pumb.ua? we use the following concept that was originally created by an amazing author and expert Jeanne Bliss. I found this in the book Chief Customer Officer 2.0. ? As a universal bank we are strong in retail banking and have? about 2 million active? customers.? We manage to grow our customer base and NPS score using these principles.?

There are five key competencies that every customer centric company has. Moreover all of those should be incorporated in the daily life of the company, the ?decision making process and used interchangeably? by middle and senior management.?

First of all we should? honour and? manage customers? as an asset.? It is necessary to calculate, report and communicate the amount of? new customers. Usually retail? banks pay more attention to sales KPIs like new accounts, loans origination, card issuance e numbers? and activation rate. Undoubtedly we have to monitor? this metric.? However we should assess and understand key customer base dynamics metrics:?

• amount of unique new unique ?customer acquired and amount of customers a company won back from inactive status
• Value and potential value of new customers
• Amount of active customers and their? level of activity?
• In terms of assets, customer depreciation or customer retention rate;?
• Average monthly value per customer in terms of profit;

In addition, it is highly recommended to calculate and manage customer equity (CLV multiplied by amount of active customers);? Finally, for effective customer strategies it is necessary to develop and promote in the company's target customer state or “core customer segment”. For example, in the bank where daily banking is the priority, the core customer segment might be characterised by behaviour of frequent transactions for example with the bank like minimum? 10 or more purchases every month. If the bank business model was more? concentrated on lending the? core customer is a solvent customer with paid debt ?The main idea under these metrics is knowledge, that not all customers are with? the same value. One customer segment might be more valuable (more profitable or with significantly? higher daily balance ) than others. A company with limited resources (should) ?pay more attention and put more effort in core customer segment development.?

Neither the KPIs nor the core segment understanding causes customer value creation.? Second competence is to understand and treat customers as human. Originally from the author this competence was called ?“align around experience”. Companies should understand and constantly monitor what ?customer pains, gains and needs are and how they are transforming? over time.? It is necessary to keep the value proposition of the company updated and actual to the? current? core? customer context. ? We should know and understand what kind of emotions customers feel while discovering and joining the solution for (his or her) their? problems.? ? Additionally we should map the customer journey including emotions and troubles while using the company’s products.? In addition, the offboarding process (for example loan repayment in the banking ) is also important both from the emotional and rational point of view. We might congratulate customers for loan repayment and give additional cash back or other reward for this stimulating customer to use daily banking functionality after lending.?

? The third competence of customer centric companies? is to enable and use effectively customer listening tools.? In our bank it starts from? NPS calculation. After that a special team performs quick? or deep? interviews with detractors and gains insights about customer pain.? Consolidated information to be delivered to product owners of features or products that generate? significant customer pains.? These product owners are asked to solve? systematically ? (not case by case, but on organisational level) customer problems or fix sources of the pain.? Monthly review of bank’s customers? NPS and summary of key customer? pains is reported to the management board. The? Board members? are being asked for commitment to control and motivate people in teams to fix issues that generate? customer pains. ? Management of insights from customer pains is a tricky and emotionally? consuming question, especially from the cultural point of view. It should be presented in a highly collaborative? and peaceful way to ?avoid resistance from product owners or other team members responsible for this customer pain. Product owners and managers should? NOT feel like somebody blamed them on the board. Otherwise we will not fix customer pains, but create new pain inside the company.

The fourth ? competence is proactive customer experience (CX) creation. According to the connected CRM strategy framework ? an effective customer centric company should? respond to the need, demand or desire of the potential client and? explore “coach behaviour” helping customers to choose the best solution. The Customer development stage should be created of a lifecycle? with curation and effective engagement into unused parts of the value proposition of the company. ? Effective? customer centricity requires? two key critical enablers: first is digital technology and second is leadership behaviour.? Technology enables execution of proactive CX? creation, helps to augment the value proposition offering and improve decision making using data.?

Last ? but not least is? leadership behaviours and customer centric? culture.? It includes how leaders behave and? what they? put in the core of decision making and the strategic moves. ? This competence includes? change management process and? key stakeholder management skills. You can start? from the strategic level of customer centricity by putting the customer in the centre of the universe of the company, seeing the problem from the customer's perspective. We should extend customer centricity to the tactical level of the organisation.?

In summary,? all three dimensions of the business model (value creation, value delivery and value capturing) should be filled by the conception of customer centricity and all 5 competencies to be developed in the company.?