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What a customer centric approach needs for success: A lesson from Lloyds


In a recently leaked Lloyds Banking Group email, a senior manager instructed staff to cancel appointments with customers only wanting advice and focus on those customers who will spend or make money for the bank.

This instruction, however, flies in the face of Lloyds very public new commitment of putting the customer at the center of what they do, which is being supported by a £1 billion digital transformation.

While the email is not totally shocking - all companies in some way or another prioritize customers - what it does highlight is a problem that all transformations face. Externally, Lloyds promotes customer centricity, invests in more customer related technology, puts more effort into collecting customer feedback, but revenue rather than experience is still the focus of their employees.

Customer centricity: What’s in it for me?

A change is needed away from “how can this customer benefit the company” to “how can we improve this customer’s experience.”

It’s hard to embrace because it seems to be the opposite of growth, but customer centricity requires companies to give up focusing on revenue. This doesn’t mean ignoring revenue growth, but that achieving revenue growth is more sustainable with customer centricity.

Customer centricity grows revenue because it puts the customer first. Depending on the industry, it creates customers that will remain in their contracts longer or become repeat purchasers or increase their spend value.

Having a revenue focused strategy that has little concern for the customer's experience is expensive and risky. For it is costly to replace continually the large number of customers that are leaving because of bad experiences. For more on this, read just what it costs to replace lost customers.

While loyalty through customer centricity is not just a less expensive and low-risk revenue stream, it also is not strategy that can't be a ‘sometimes thing.’ It requires a fundamental shift in culture and how the customer relationship is perceived. A change is needed away from “how can this customer benefit the company” to “how can we improve this customer’s experience.”

And for it to be effective it can’t just be technological or structural but more importantly it requires a change in thinking of all employees from upper management to the front line.

Customer experience transformation processes often fail because while companies conduct many changes around the operation of the business, employees continue to think in terms of benefit to the company rather than the customer.

[caption id="attachment_16241" align="alignleft" width="391"]1942FD49BF New technologies are great for enhancing customer experience, but they can quickly become a 'coat of paint' if your employees are still focused on revenue.[/caption]

In the case of Lloyds the senior manager's instruction highlights that the focus of this manager and his/her employees is still revenue. But how do we change minds? Changing technology is easy and maybe even reorganizing business structures and practices is not so difficult, but ensuring that employees continually focus on the customer’s experience is hard.

A simple way to guarantee change

The best way to change employee focus in a customer relationship is to change your KPIs

Lloyds CEO Horta-Osorio has said the company abolished traditional sales targets last year, which is a good start at removing the type of thinking the senior manager’s email showed. And it is understandable that in a large organization like Lloyds this change can take time.

However, in the case of Lloyds it is not enough to remove sales targets in a revenue-focused culture, they need to be replaced by KPIs that measure the customer’s experience. Depending on your industry, this could be:

  • How many customers did we retain this month?
  • What is our average problem resolution time?
  • How many customer issues did we resolve with a chosen action?
  • What is the rating of our customer’s experience?

With metrics such as NPS®, CES, and CSAT measuring the customer’s experience is done easily. Used as KPIs, the easy to understand scores give employees a target to work towards, which is driven by the customer’s experience.

Changing the working habits of employees to focus on new KPIs is difficult and will take time, but customer experience technology and training sessions will do little if the goals of employees are still aligned with old targets.

To learn more about using metrics to measure loyalty and create customer-centric employees, read our short cartoon about NPS. An easy to understand metric that incentivizes employees to work towards retaining customers for longer by creating a better more rewarding customer experience.

cartoon

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