7 Habits of Customer-Obsessed Companies

In a vast sea of sameness, a few companies stand out in their ability to wow their customers. I drink Starbucks, drive a Tesla, shop on Amazon, use a Microsoft Surface Studio, and love staying at the Ritz-Carlton. These companies have one thing in common – they are customer-obsessed. They deliver an excellent customer experience – seamless, effortless, and delightful. What is customer-obsession? How can a company become customer-obsessed?

Here are 7 habits of customer-obsessed companies:

1.    Put customers at the center of all decisions.

Every company has a dominant logic that defines its culture, dictates its priorities, and drives its decisions. For many companies, this could be a product focus, a technology focus, a competitor focus, or a sales focus. Customer-obsessed companies, on the other hand, put the customer at the center of all decisions. The benefit of being customer-focused is eloquently articulated by Jeff Bezos in his 2016 letter to Amazon shareholders where he stated, “customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great. Even when they don’t yet know it, customers want something better”. This core belief ensures that Amazon always focuses on innovation that delights its customers. As Bezos puts it, “your desire to delight customers will drive you to invent on their behalf.” Amazon insiders tell me that they even reserve a seat for the customer at internal meetings.

2.    Foster a culture of curiosity.

To serve customers well, you must understand customers them deeply, imaginatively, and insightfully. Customer insight is more than walking in the customer’s shoes. First, you have to take off your own. To gain deep customer insights, you need to create a culture of child-like curiosity. Children are innately curious because they are constantly experiencing new things in the world. Adults, on the other hand, are often closed-minded because they assume that they know how the world works. To break free from this rigid mindset, we must empty our minds of assumptions based on experience. Microsoft CEO Satya Nadella calls this cultural shift “leading with a beginner’s mind”, and he is leading Microsoft from “know-it-all” to a “learn-it-all” mindset. Jeff Bezos echoes this thought in keeping Amazon a “day 1 company” where the culture of experimentation, failure, and growth remains constant.

Customer insight is more than walking in the customer's shoes. First, you have to take off your own.

3.    Create a clear and authentic brand promise.

Armed with a customer-focused mindset and a culture of curiosity, you are prepared to develop your customer value proposition. You need to define who you want as your customers, what they will get from you and what they should not expect from you. Customer-obsessed companies have a clear, concise and consistent brand promise. Take IKEA, for example. Its brand promise is “to create a better everyday life for the many people” by offering “a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them”. IKEA targets first-time furniture buyers and promises that IKEA will offer them affordable and well-designed home furnishings. More importantly, IKEA makes it clear what customers won’t get – durable furniture, customization, and white-glove delivery. Brand promises need to be clear, but they also need to be authentic. Every employee from the corner office to the factory floor must know the promise and must believe in it. If you want your customers to love your brand, you must live your brand. 

If you want your customers to love your brand, you have to live your brand.

4.    Execute consistently and flawlessly across the customer experience.

Once you have constructed a well-defined brand promise, you must bring it to life by executing consistently and flawlessly across all touch points and all stages across the customer experience. Consider my experience with Tesla. When I bought my first car in December 2014, I configured my car online and paid for it online. Tesla kept me informed about the status of my order. When my car was ready, they sent me the documents electronically, and delivered the car to my house. Over the five years that I owned the car, Tesla sent me dozens of software updates that added features to the car. When I needed repairs, they sent a mobile repair van to my house. When I traded in my 2014 car for a 2020 car, the trade-in and purchase was processed online. I simply drove to the Tesla showroom and swapped cars in 15 minutes. No dealers, no haggling, no service appointments. Tesla makes an excellent car, but what makes me a loyal customer is their innovatively designed and flawlessly executed customer experience. 

5.     Align KPIs and incentives to focus on customers.

Metrics drive behavior because people tend to do what you pay them to do. Customer-obsessed companies measure and reward performance based on customer-focused Key Performance Indicators (KPIs). Most companies use revenues, profits, and operating margins as KPIs. But customer-obsessed companies go further. They define performance and success in terms of customer outcomes including customer satisfaction, Net Promoter Score (NPS), customer success, and customer loyalty.

Adidas, for example, moved from evaluating brand performance using traditional KPIs to using NPS, a metric that motivates Adidas employees to drive desirability and loyalty to Adidas. At Salesforce, product managers are evaluated based on product usage metrics like Daily Average Users (DAU) and Monthly Average Users (MAU). Some IT consulting firms I have worked with are moving to incentive compensation based on customer success metrics, instead of sales.

 6.    Hire for attitude and empower with data.

To deliver an excellent customer experience, you need to hire the right employees and empower them with the tools and data to deliver great customer service. Customer-obsessed companies know that you don’t hire employees – you hire an attitude. Southwest Airlines has a simple mantra – “Hire for attitude, train for skill.” Southwest prefers to hire young, customer-friendly people who they can train, instead of experienced people with hardened attitudes. 

Once you have the right people, you need to empower them with the information to deliver excellent service. When I stayed at the Oberoi Hotel in Mumbai last year, I requested the housekeeping staff to get me a memory foam pillow as I hate soft down pillows. When I stayed there again last month, I found a memory-foam pillow waiting for me on my bed. This simple yet profound act of service would not be possible without capturing data on guest preferences and making it available to all employees.

Southwest Airlines has a simple mantra - "Hire for attitude, train for skill".

7.    Measure, monitor, and continually improve the customer experience.

Peter Drucker made a famous statement in 1945 – “What gets measured gets managed”. Customer-obsessed companies measure every aspect of the customer experience and they use these measurements to drive customer experience innovation. An excellent example of data-driven experience innovation is the MagicBand from Disney World.  - a colorful, waterproof wristband that contains an RFID sensor and a long-range radio. Guests can use MagicBands to access hotel rooms, enter parks and rides, charge food and merchandise, and unlock personalized surprises. But the MagicBand is also a treasure trove of customer experience data for Disney. The devices communicate with thousands of sensors and over 100 systems liked together to generate massive amounts of real-time data that tells Disney where the guests are, what they are doing and what they want. By continuously monitoring the customer experience in great detail, Disney is able to create a stress-free and delightful experience for its guests.

Customer-obsession should permeate every aspect of your company’s operations – from culture and mindset to the value proposition and offerings to the people and processes for delivering on the customer experience. By embracing these 7 habits, you too can join the exalted ranks of customer-obsessed companies.