Today’s customers are better informed, better connected, and more demanding than ever before. CEOs are now concerned about Customer Loyalty and they recognize that mastery of the customer agenda is essential. In fact, global leaders of successful businesses recognize that creating a customer-centric, digitally-transformed business is a top priority.
In this age of digital disruption, how can organizations engage customers, increase Customer Loyalty, and achieve profitable growth? What is most appropriate when it comes to Customer-centric design?
Almost every market is experiencing a fundamental change. Consumer expectations have shifted and digital technologies are making the biggest impact on businesses large and small since the start of the information age. Ultimately, businesses need to navigate the challenges of digital disruption and find new ways to create economic value and drive growth.
The challenge today is what it takes for organizations to be a Customer-centric Organization.
Unraveling the 6 Core Capabilities of a Customer-centric Organization
A Customer-centric Organization must have 6 Core Capabilities to compete in the Digital Age. In this global time, customer-centricity ceases to be a differentiator. It has become a matter of survival.
The first 2 Core Capabilities are Customer-directed. These are Customer Strategy and Customer Experience (CX).
- Customer Strategy. The first core capability, Customer Strategy is focused on addressing changing customer needs and behavior. It involves the development of a clear view of customer behavior and intentions using data and analytics. Customer Strategy can be applied in several ways. It can be used to refine and develop a proposition or even inform major investments in new media content.
- Customer Experience (CX). Customer Experience (CX) is that core capability that generates a significant competitive advantage – a double revenue growth against industry counterparts. It is being able to respond to customer needs balanced with understanding the values customers bring to the enterprise. The world’s most advanced customer businesses often undertake customer journey mapping and experience design which are critical to executing customer-centric change.
The second 2 Core Capabilities focus on front office capability and across the enterprise value chain. These are Sales & Service Transformation and Connected Enterprise.
- Sales & Service Transformation. As the third core capability, Sales & Service Transformation is essential to becoming a customer-responsive business. This is a newly digitized and fully integrated front office capability that can attract, engage, acquire, and continually engage with customers. With the modernization and transformation of front office functions, Marketing, Sales, and Service teams get to have better ideas on how to work together more effectively. This leads to a full end-to-end Business Transformation. A core concept to Service Transformation is the development of Service 4.0 capabilities.
- Connected Enterprise. Focused on delivering differentiated Customer Experiences, Connected Enterprise is an architecture of fundamental capabilities that work across the Enterprise Value Chain, from back office operations through customer-facing interactions. The application of Connected Enterprises has led to companies experiencing an increase in annual revenue and a positive return on investment.
The third 2 Core Capabilities are Data & Analytics and Digital Transformation — your company’s response to a highly demanding digital market.
- Data & Analytics. The fourth core capability is Data & Analytics. This core capability is focused on creating actionable insights that drive profitable growth. With the use of Data & Analytics, it can uncover patterns of customer behavior, relevant social media influencers, and channel preferences. It is useful in personalizing propositions, channels, marketing communication, and the experiences offered to customers.
- Digital Transformation. The sixth core capability, this is the core capability that can power new ways to engage customers, optimize operations, and transform products. Digital Transformation is delivering the right customer and digital technology. With the advent of virtual reality, augmented reality headsets, the Internet of Things, AI, and cognitive computing, it has changed the way customer-centric companies engage customers. Digital Transformation is not an overnight event. This is a series of incremental steps, each delivering a concrete business advantage.
Developing the 6 Core Capabilities is no easy task. It can be pretty challenging. Companies need to have a good handle of its key challenges and the right approaches to mastering the 6 Core Capabilities. When this is achieved, the high road to global competitiveness is achieved.
Interested in gaining more understanding of these 6 core Capabilities of a Customer-centric Organization? You can learn more and download an editable PowerPoint about the 6 Core Capabilities of a Customer-centric Organization here on the Flevy documents marketplace. There is a series of 3 presentations – Part I, Part II, and Part III that discusses all 6 Core Capabilities.
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With startups ready to disrupt traditional players, established firms need to form an even stronger bond with their customers instead of waiting for customers to reach out to them.
The traditional Customer Experience model—referred to as the “acquire what we make” model—is characterized by occasional interaction between the companies and the customers, once a customer ascertains her/his needs and looks for products or services to fulfill them. In this model, companies do all they can to offer quality products or services at a competitive price, while their marketing and operations are based only on brief engagement with the customers. Because of the occasional connection with the customer in this approach, the vendor has little knowledge of the difficulties a customer faces to procure a product or service.
With each passing day the tactics that organizations use to connect with their customers are undergoing rapid transformation. Technology and customized digital interactions provide companies the means to build deeper relationships with customers. Organizations pursuing Customer-centric Design, today, are addressing customers’ needs the moment they occur—or even before that by virtue of “Connected Customer Strategies.”
Connected Customer Strategies call for the companies to maintain customer relationships round the clock (24×7). These strategies demand from the organizations to develop an assortment of new capabilities (e.g., invest in Big data and Analytics), connect with the customers on a regular basis, track their activities, and offer customized experiences and offerings. These strategies are not about using modern technology, rather the methods companies should adopt by using technology in creating delightful experiences and long-standing associations with the customers.
There are 4 distinct Connected Customer Strategies that are instrumental in developing exceptional Customer Journeys:
- Fast Response
- Personalized Recommendations
- Proactive Recommendations
- Automatic Execution
Let’s discuss the first 2 strategies in detail now.
Organizational Leadership needs to carefully consider adopting the most suitable connected customer strategy. The Fast Response strategy, as the name suggests, is about prompt and flawless delivery of required services and products to the customers. To adopt Fast Response strategy, organizations need to ascertain the customer requirements carefully and simplify their purchasing process.
The core capabilities needed to implement this strategy include prompt delivery, minimal friction, flexibility, and precise execution. This strategy is appropriate for knowledgeable yet authoritative customers who dislike disclosing their personal information. Using this strategy, a prompt response to a customer needing replacement of a product should be a simple yet accurate, couple-of-click online ordering process and the order should be delivered a few hours later. The aim of the Fast Response strategy is to reduce the amount of time and energy the customers spend on procurement as much as possible.
Organizations using Personalized Recommendations strategy help customers identify their needs by presenting various options to them. The strategy involves active involvement of firms in assisting their customers by offering a menu of customized offerings—as soon as the customers have finalized their requirement but before their decision on how to fulfill it.
This strategy is suitable for customers who are willing to share their data with the company and value advice but still hold the final say. With the Personalized Recommendations strategy at work, the journey for a customer needing a product replacement could simply involve the customer’s visiting a company’s website, automatic suggestions to customer about the correct product based on her/his prior shopping history, the customer ordering the suggested product, and receiving the delivery a few hours later.
Interested in learning more about the other Connected Customer Strategies? You can download an editable PowerPoint on Customer Experience: Connected Customer Strategies here on the Flevy documents marketplace.
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“Knowledge has power because it controls access to opportunity and advancement.” – Peter Drucker
The 21st century is undoubtedly a century of knowledge. The everyday usage of available advanced information and business technologies, and internet in business activities just show how rampant corporations are engaged in information exchange and Knowledge Management.
In the light of globalization, companies are now exposed to an unpredictable and complex competitive environment. Pressures are put on companies to adapt quickly to survive in the competitive market. The vital strategic resource is Knowledge. Companies have started to realize the major value of an intellectual resource. The central role of Knowledge Management in making a quality decision has never been emphasized as much as today.
Intellectual resources and Knowledge are now contributing to revenue generation and increasing reputation. It has contributed to creating barriers to entry of potential competitors, increase customer loyalty, and create innovation. In today’s world, the success of the organization now depends largely on continual investment in learning and acquiring new Knowledge that creates new business and improves current performance.
Understanding Knowledge Management
Knowledge Management (KM) is a multidisciplinary approach to achieving organizational objectives
It is an integrated approach to gathering, analyzing, storing, and sharing knowledge and information within an organization. It ensures that the right information is delivered to the appropriate place or person at the right time to enable informed decision making.
An enterprise-wide ability must be created to transition data and information into critical knowledge. This is to ensure service stability, maintainability, and performance leading to organization wisdom.
Knowledge Management evolves around 3 primary spheres that are closely integrated with each other.
- Technology. Technology provides a secure central space where employees, customers, partners, and suppliers exchange information, share knowledge and guide each other and the organization to better decisions.
- KM Processes. KM Processes include standard processes for knowledge contribution, content management, retrieval
- People. This refers to the participation of team members in knowledge sharing, collaboration, and reuse to achieve business results.
At Flevy, we’ve developed a Knowledge Management Primer that examines and discussed the purpose and nature of the key components of Knowledge Management. It demystifies the KM field by explaining in a precise manner the key concepts of KM tools, strategies, and techniques, and their benefits to organizations.
The quest to set up a Knowledge Management system requires an understanding of the essential elements integrated within the Knowledge Management Approach. This includes an understanding of the DIKW Model or Pyramid, the importance of Knowledge Assets, and the structure and priority of information based on its Knowledge Hierarchy.
What is Knowledge Hierarchy
- Operational Knowledge. The focus of Operational Knowledge is to gain operational effectiveness. It helps organizations understand how service performance, compliance, and overall IT operational effectiveness is managed.
- Tactical Knowledge. Tactical Knowledge is focused on service value. It helps organizations understand how to manage and ensure service value.
- Strategic Knowledge. Strategic Knowledge is focused on benchmarking and advanced analytics. It helps organizations understand the effects of operational decisions.
In the Knowledge Hierarchy, it must ensure that resulting knowledge is well defined, specific, comprehensive, and with high average quality information.
Interested in gaining more understanding of Knowledge Management? You can learn more and download an editable PowerPoint about Knowledge Management (Primer) here on the Flevy documents marketplace.
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