Does your customer have a seat at the table in your organisation to drive good profits?

Does your customer have a seat at the table in your organisation to drive good profits?5 min read

If there’s one company that demonstrates the benefit of being customer-centric within its DNA, its Amazon. The e-commerce giant’s chief Jeff Bezos is said to always leave an empty chair representing the customer during meetings. All decisions made are influenced by the needs and requirements of this faceless customer. This attitude of single-minded focus on delivering customer delight is, in Bezos’ words, “the only long-term defensible competitive advantage.”

But there are big brands who work in stark contrast to this best practice. Let me share a few that you might relate to.

Two airlines of two different countries. One a low budget carrier, another a regular commercial airline. What ties them together is a similar experience. Both airlines cancelled, rescheduled and modified flight timings at the last minute with no logical reasoning. My guess – they were probably herding passengers from partially-full flights to the same destination into one single airplane to save on costs. A classic case of ‘Bad Profits’ where you may enjoy a short-term gain but a long term loss due to reduced customer loyalty and negative word of mouth. The negative impacts for both are not easily visible in a typical company financial statement.

Frustrated with going through these experiences in a span of fortnight, I was venting to a few friends only to learn more about their experiences with other sectors. One friend, who was one of the earliest and high bill paying customers of a global mobile network, was charged a whopping $70 for just 30KB of mobile data accidentally used while transiting through an international airport. Yet another spoke of his annoying experience with his bank where he is one of their oldest Platinum  customers. It is standard practice for banks in India to notify their privileged customers closer to the due date of unpaid bills. While my friend wasn’t reminded, he was charged a bomb in late fees for defaulting by just two days. Worse, the customer support representative didn’t seem to bat an eyelid when my friend expressed his frustrated decision to withdraw his account with the bank.

These examples are all bound by a single commonality  – making customers regret partnering with them by leaving them feeling frustrated, arm-twisted, mistreated and even ignored and devalued. And why do you think this happens? Well, it’s because the organisation’s focus is more on making short term bad profits rather than delivering customer delight.

All businesses work for profits. It’s natural to cut losses. But it is the altruistic purpose beyond this that makes their path to making profits the right way that helps a brand not only sustain itself, but also grow with the goodwill of its customers. In my earlier blog posts, I discussed how Uber and Netflix have been disrupting multiple industries within their sphere, growing not only their profits, but also their customer base exponentially, and predominantly by responding to existing customer experience gaps.

Now if you think cost leadership is the crux, I beg to differ. Let’s take a look at Nordstrom and Ritz Carlton. Big brands, respected and definitively known for their customer recommendations. They are not cost leaders; on the contrary, they are the expensive and elitist brands. business predominantly for the customer intimacy that they bring in. If you are a returning visitor to Ritz Carlton anywhere in the world, check out the small comforts they provide to you. Your favourite treat will be up there at your table, the pillows will be fluffed the way you like, and they would probably even enquire about specific members of your family or your friends if they did accompany you on your previous stay at one of their hotels. For a brand to establish such a global culture while leveraging on its data systems, it is but testimony to the fact that its employees are delighted to deliver such service to its consumers.

Even with Nordstrom, you will find that a floor manager will never point you to a shelf when you inquire about a product, but will rather walk you to it. And at the check out counter, your bags are never handed over the counter, but the check-out personnel walks around the counter to hand it over to the customer. (I’m not joking!), Nordstrom takes back returned goods, no questions asked, as a policy. While the brand invests its trust in its employees’ judgment of accepting returned goods, employees cascade the same emotion of trust and value to its consumers, bringing in a value of diligence and creating a viscose circle of goodwill and loyalty.

The Financial Services Royal Commission in Australia has played the curtain raiser over a lack of this behaviour. With a strong focus on doing the right thing by the customer, the Royal Commission’s report reiterates across various pages that it is time for banking, superannuation and fund management institutions in Australia to reverse the trust deficit  caused by a profit-focused approach by brands. Several financial services organisations  were identified by the commission for their deceptive fees and charges, among other practices detrimental to customers.

Over the years of my experience in strategic customer experience management, I have always found that when a brand has a clear and strong purpose of empowering, encouraging and valuing its employees to deliver great customer service, the motivation and pride to create long-term customers for what they call “their brand” reigns paramount. This consequently translates into a high sense of customer loyalty, who become evangelists for the brand, leading to long-term profits that are termed good profits.  So let me leave you with a question:

 How do you ensure that your customer has a seat at the table in your organisation?

 

Royal Commission throws limelight on customer focus & ethics blog by Christopher Roberts, MD Engaged Strategy You might also enjoy reading: Royal Commission throws limelight on customer focus and ethics

By |2019-03-07T13:55:03+10:00March 7th, 2019|

One Comment

  1. Vineet Agarwal March 14, 2019 at 5:25 pm - Reply

    I have a similar story to share. A globally renowned automobile brand’s dealer recently exhibited an absolute lack of empathy even after learning that one of its long-term customer and brand loyalist was critically injured in a car crash.

    The dealer tried to milk the opportunity by billing a bed ridden customer (my friend) an illogical and exorbitant parking fee at the facility until the insurance agency visited and assessed the damage – something which they are supposed to do (co-ordinate with the insurance company). They were trying to stretch the who assessment process to anywhere between a week to a fortnight which should ideally be completed in 48-72 hours of receiving the vehicle.

    As a direct result, not only did this old customer turn into a detractor, he also discouraged several others from purchasing bikes from that outlet – in turn, a lack of sales even for the brand. Me personally would not want to go for that brand or dealership myself.

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