We are all familiar with the move over the last decade from an information age to the age of the customer. According to research firm Forrester, if a company deeply understands the needs, delights and concerns of their customers and how they might change over time, it can "survive any technology-fueled disruption."
This change in focus from information to customer requires a different type of adaptiveness from our IT strategy—it requires what Forrester has termed a more "customer obsessed" approach.
In 2019, Forrester revealed research that leading customer-obsessed organizations grow at a whopping four times their industries’ average. These "future fit" firms are radically different in how they go to market, deploy technology, and understand their customers. Customer-centric companies are more adaptable—a capability that’s proven useful during the COVID-19 pandemic.
Bobby Cameron, a vice president and principal analyst at Forrester, joined a recent Cornerstone webinar to describe the characteristics of customer-obsessed companies and lay out some strategies for becoming one. Here are some of the key takeaways from the session:
As Cameron explained, winning companies are following these principles of customer obsession:
Customer-led: Think about design from the customer in. Are you addressing their specific needs?
Insights-driven: Targeted data drives smarter decisions. Customers are improving their own decision-making, and organizations are doing the same.
Fast: This doesn’t just mean time to market, but how quickly organizations test, iterate and deploy technology.
Connected: Organizations are moving from point solutions to end-to-end ones that account for issues across an ecosystem or enterprise.
During the webinar, the following question came up: Is customer obsession as relevant during a pandemic, and should the focus instead be on risk, resilience and recovery?
"The pandemic makes this a watershed moment – maybe the largest disruption we’ve had since World War II, globally," said Bobby. "To get out of the pandemic, you have to behave well... you have to pay attention to your customer, find out where to invest."
Customer obsession transcends any one moment in time; as the customer changes, companies must change with them (or, better yet, anticipate the change). Companies should also be wary of disruptors during this crisis: As Cameron reminded the webinar’s audience, disruptors often come seemingly from out of nowhere, delivering a value proposition that meets an emerging customer need and can break the growth curve of an established leader.
According to research from Forrester, business priorities fluctuate based on a company’s level of customer obsession.
For beginners (Cameron and I used the term foundational), the relative priority of reducing costs is very high. These organizations tend to be focused on core business processes, systems of record (like Salesforce for tracking customer data and interactions) and efficiency. The results of this approach tend to lead to silos: Companies end up investing in sales, marketing or services as isolated pieces rather than end-to-end.
On the other hand, advanced organizations—the customer obsessed—are far less likely to prioritize cost and instead focus on value creation through end-to-end speed and innovation. These enterprises invest in systems of insight and systems of engagement and understand that an improved employee experience is a dependency for the desired customer experience.
"Employee experience rises to the top of the pack," said Bobby. "While cost is still important to the advanced companies, it’s not the driver."
While a foundational tech organization’s CIO could spend up to 70% of their budget on systems of record, an intermediate or advanced CIO invests in cloud-first, digital operating platform-based technologies. To accelerate their investments, these CIOs will use abstraction layers to connect their systems of automation, or technologies that connect the virtual and physical worlds, with their systems of insight, which help them make smarter decisions. Systems of record don’t go away—they are a critical and foundational investment. But no matter how efficient systems of record are at capturing data, they simply don’t allow for solving complex business problems with the speed that’s required for the customer-obsessed firm.
Customer-obsessed organizations are also employee-obsessed—it’s two sides of the same coin. If your employees don’t feel valued, neither will your customers.
In order to provide great customer service, employees must be able to easily use and add data to a company’s systems of record, insights and engagement. This requires that the CIO, CMO and CHRO work together. For instance, before a CIO invests in new digital platforms or systems of engagement, they should consult with their CHRO and CMO to make sure that these purchases align with their employees, market, and how both are changing.
"CIOs have to invest ahead of the curve. Does technology fit with how your employees are changing? Does it meet the requirements for remote work?," said Cameron, "Bringing people up to speed with the tech they will need to help their employees perform despite change—and therefore service the customer better, too."
Due to COVID-19, companies are in a period of intense change. But even before this global pandemic occurred, our world’s rate of change was increasing at incredible speeds. Companies and their leaders follow the old adage: "Different is not always better, but better is always different." Switching to a customer-centric business and IT strategy is different, but it can help companies handle the current crisis and prepare for the changed, post-pandemic reality.
The full session is available on-demand and includes a deeper dive into Bobby Cameron’s research as well as more details and examples of how customer-obsessed and employee-obsessed organizations are setting themselves up for future success.
