How to Kill Your Business by Merely Pretending You’re Customer-Centric

By Chris Bucholtz

Every company in the world is customer-centric – just ask them! They’ll all tell you that’s the case (except maybe Ryanair – but their CEO is so full of it, he’d probably say they were customer-centric, too). Sadly, we as consumers all know that customer-centricity is actually fairly rare. No matter what the folks in the C-suite say, the really important C-people – customers – often get the impression that the business sees itself as the most important entity in a transaction.

Why does this happen? I think executives and employees generally like the idea of putting the customer at the center of the business, but then their jobs interfere with that. The way we design roles and the way we measure performance often is at odds with the idea of serving the customer. That creates a clash between corporate culture and the objectives behind CRM.

From a business standpoint, the objective is to make each employee more productive and thus generate more revenue for the company. That means they’re organized around certain tasks and then measured against aspects of their jobs that point at either generating more revenue or accomplishing tasks as inexpensively as possible. That allows businesses to make more with higher margins, and it makes sense.

But it needs to be balanced. When an employee is unprepared to help a customer, or when that employee is more interested in pleasing someone internally than they are at pleasing someone externally because of the incentives used to evaluate their performance, the idea of the customer-centric business is dashed.

Sales is another area where business motivations can upend a customer-centric philosophy. Bringing in new customers is important – it’s how most companies grow, after all, and nothing is more exciting than landing the big deal. That’s the kind of thing that makes sales managers happy, after all. But what about customer retention? Well, keeping a customer is usually not that exciting a thing; most of the time, they just stay around on their own, right? But a 5 percent churn still means a significant amount of lost revenue; fighting churn depends, in part, on the creation of a relationship.

This is why CRM is so useful in customer retention – and it’s also the reason CRM sales did not nosedive during the recession. Many companies realized that keeping customers was vital to survival, more critical than acquisition. As conditions have improved, the temptation is to shift corporate culture back toward the exciting and much lauded aspects of acquisition – at the expense of the more customer-centric practice of retention.

Another business-centric tendency results in metric-mania. You can’t control what you can’t measure, right? But are you really trying to control your customers? Probably not. You’re also probably not in the business of trying to micro-manage (and micro-measure) the ways your employees interact with your customers.

You certainly can put some metrics in place to understand how effectively you’re doing things, but you need to choose the key performance indicators (KPIs) you base your evaluations on very, very cautiously. Choosing the wrong ones can send signals to employees that result in behaviors that can spoil your customer relationships. For example, KPIs for customer support agents based on time to resolution or avoidance of escalations emphasize the desires of the business over the desires of the customer. The customer wants satisfaction – measure around that outcome if you truly plan on being customer-centric.

Metric-mania can affect other aspects of the business as well, especially when you venture into new territory. Social CRM is just that sort of terrain; many businesses fail to weigh the importance of engaging in social media against ROI properly, primarily because they start without a realistic social CRM baseline. They come up with an arbitrary number that reflects the business’s desired outcome, not the customers. In many cases, initial efforts fail to meet the goal of the business – but did they meet the needs of the customers?

I know how this divergence between business and customer develops – people work hard at their jobs, and it’s easy to start viewing their day-to-day tasks through the wrong end of the telescope. Employees get a mixed message – the company is customer-centric, but you’re evaluated on how well you execute these business-oriented tasks. The reality of these tasks makes it almost inevitable that the concept of customer-centricity fades into the background.

How do you stop this? First off, it needs to come from the top down. The head of the business needs to be the chief evangelist for true customer-centricity. Next, managers need to create KPIs that reflect what’s good for the company and what’s right for the customer. And any changes to processes need to be viewed from both sides of the looking glass – both through the lens of the business and through that of the customer. If it looks good from both sides, it’s a change worth making. If not, then that change should be carefully re-examined.

Ultimately, the key element in play here is one of empathy. Can you put yourself in the place of your customers, and in the shoes of your employees as they deal with customers? Granted, it may add a degree of complication to how you run your business – but in the social era, especially, empathy is a critical element. If you lack it, you’re going to have a tough time grasping how the things you do to run a better business may be the very things that alienate customers.