Keys to Customer Centricity: Internal Culture and Incentives

It seems like a no-brainer that a customer-focused business will be rewarded with customer loyalty, revenues, and even employee loyalty, but getting there is a huge challenge for many businesses and requires significant transformation efforts.

Recently in speaking with a CEO of a consumer packaged goods (CPG) company, he expressed frustration in getting the organization to shift from being product and brand centered to thinking about the customer first. It isn’t surprising that this is the challenge given the long-standing focus of companies—CPG in particular—on products and brand.We’ve explored this question with CMOs recently to learn where they believe the biggest challenges lie. Most are clear that the hurdles are largely internal—poorly incented employees, a product-siloed organization structure and a culture that doesn’t reward customer centricity. For many companies, a focus on creating an external image of customer experience without taking significant steps to transforming the internal culture, ultimately fails.

Three recommendations from those succeeding in building a customer-centric approach

1. Transform your internal service functions to be agile and customer focused.

Pick a place to make internal service exceptional to show your employees the impact client-first can have. We’ve seen CIOs drive a service-led approach that transforms the help desk and acquisition of new tools. The simplicity of the new approach inspires employees to think about the end-customer experience differently.

2. Improve internal incentives to reward customer focus.

Some companies use Net Promoter Scores (NPS) as a metric included in executive compensation. Whatever your focus—incent the behavior you want. If you are incenting product sales then your client-facing teams are going to sling whatever product they have at your customers. If they are rewarded for considering an end-to-end customer experience, priorities will change.

3. Develop an internal steering committee across functions that focuses on 3–5 significant changes that will drive a difference for clients.

Ensure that you have executives and junior employees engaged in the group. In addition, bring a subset of clients together to measure your success and test your assumptions. Focus on quick wins as well as longer-term goals that will demonstrate success across the entire organization.

Shifting the focus of an organization to think about the customer first rather than the product first is difficult. It takes incredible focus and relentless staying power to win over the past behaviors that people are most comfortable with. As Peter Drucker said, “Culture eats strategy for breakfast”, and today’s constant reinvention requirements make that truer than ever. Driving a customer-first approach requires you to first consider the changes required internally and how to incent the change and behaviors you own culture first and incent the change you want to see.