Meyer's Management Models #51

Customer-Centricity Circle

How can I put my customers at the center of my activity system?

Key Definitions

To create something of value, organizations carry out a variety of tasks, that together is called their activity system. All tasks that directly result in value in the eyes of the customer are the primary activities, while support activities are undertaken to provide the necessary resources to run the primary activity system (see model 50, the Activity System Dial).

Organizations are customer-centric when they place the customer journey at the center of all their activities and organize their primary activity system as a seamless flow following the steps taken by the customer.

Conceptual Model

The Customer-Centricity Circle gives a generic picture of what a typical customer journey looks like and then shows how an organization’s primary activity system should be wrapped around this customer journey, to accompany each customer in a seamless manner. The framework suggests that the customer experience should be actively managed throughout the full journey, using the many moments of interface to create customer value. The people and departments performing this flow of activities must therefore work closely together, instead of only focusing on their own task and leaving customers to wander between departments. In practice, each type of customer journey, and therefore each primary activity system, will be different.

Key Elements

The five steps of every customer journey, and the linked types of activities, are the following:

1. Explore: Get inspired. At the start of a journey, customers are often still orienting themselves, looking to which needs should be addressed first and what types of value propositions are available. They will also scan for potential suppliers. In this phase, an organization will want to understand the customer’s needs and behaviors, while making themselves visible as potential supplier. At the same time, a competitive value proposition will need to be formulated and information about it made available to the customer.
2. Examine: Go Shopping. Once a customer has become more committed to the idea of purchasing a product or service, the serious shopping can begin. More specific information about various products and suppliers will be requested and evaluated. The organization can use this interaction to influence the customer’s wishes and steer them towards a particular offering. In this part of the sales funnel there is often also a need to negotiate about the price and conditions.
3. Exchange: Get it. As soon as customers finish the decision-making process, they will want to purchase and receive the goods or services. For the organization this means that they need to be able to deliver, often requiring earlier capacity planning. Once the order is taken and processed, the previously produced goods can be handed over or delivered, or the product/service will still need to be created, which sometimes will happen immediately, but often requires some scheduling and provision at a later moment.
4. Experience: Enjoy it. Many products or services can be directly enjoyed by customers, but sometimes they need help to install, start-up and/or learn how to use their new purchase. During use they can also have questions and/or require support, while some problems might need to be resolved. For the organization this means after-sales support, which can range from helpdesk activities to on-going maintenance, repair and dealing with customer dissatisfaction for any variety of reasons. ?
5. Extend: Repeat it. Ideally, organizations would like to have repeat customers, or at least customers that promote them among other customers. So, when customers want to dispose of their old products and reflect on what they liked and what they would prefer to have differently, the organization needs to be present to help the customer to return the old product, look back fondly and even go around the circle again. Here customer surveys can feed into the next round of value proposition development.

Key Insights

• Customer-centricity requires putting the customer journey at the center. In a customer-centric organization, it is the customer’s value perception throughout the customer journey that is at the center of attention.
• Customer-centricity requires the primary activity system to follow seamlessly. To optimize the customer experience, all of the primary activities need to be aligned with one another to create a seamless flow following the customer journey.
• Customer-centricity requires a cross-functional approach. If different primary activities are given to different functional departments, the seamless flow will be endangered. Therefore, in a customer-centric organization, cross-functional coordination of the primary activities, or even cross-functional teams, is a crucial feature of the organizational design.
• Customer-centricity requires support activities to be supportive. In turn, all support activities (e.g., HR, IT, Finance, Procurement, Facilities, R&D) need to be wrapped around the primary activity system, focused on how to enable the primary activity providers to follow the customer journey as effectively as possible.
• The customer-centricity circle differs per business. Which type of customer journey to support and how to develop a primary activity system are strategic choices. No two will be the same. The customer-centricity circle model is only generic and needs to be adapted.

I hope you enjoyed this article as a small step in your intellectual journey as manager and leader. As always, it would be great if you "extend" and come back next month, as well as promote this series of models to your friends and colleagues. So please leave a LIKE on LinkedIn, or even preferably a Comment.

Next month's edition will be about the STATUS SNAKES AND LADDERS model, that describes the four types of status and what you can do to decease (snakes) or increase (ladders) it. You can find all previously published models at?https://www.c4sl.eu/publications/, where you can also download the blog as a pdf, download the model as a PowerPoint and subscribe to the blog.