Over the years, with fairly mundane regularity, we see organisations spending their time, energy and money trying to get better and better at the wrong things.
Businesses will often invest in things that can be improved, as they identify them. That feels like common sense, but often what happens is they spend their time improving things that don’t really benefit the organisation in ways that really matter. Worse, the may actively harm the organisation by degrading the experience of customers and staff, in pursuit of ‘efficiency’ or ‘productivity’.
How do you ensure your investment is going to well-placed rather than wasted? There are six critical things you need to understand - and understand deeply - and act upon well. Whilst they may seem obvious, organisations consistently fail on one or more of these capabilities.
The first, simply, is to know your customer, in all their richness and complexity. How do they live? What do they care about? What are they trying to accomplish through your product or service?
Where are they hearing about you? What leads them to spend the time to investigate your offer? What tips them over the edge and gets them to sign up? What is it they value about you and your offering: Is it price? Quality? Convenience? Or some other characteristic?
As they move through a service journey, how are each of the service interactions delivering on - or detracting from - the things they value?
There are a host of methods you can use to better understand your customers, but one we can’t recommend highly enough is this: speak to them. Face-to-face; one-on-one; as people. As humans. Listen to what they have to tell you - not about your offering, but about themselves.
Really effective organisations will go further. They’ll also seek to understand two other groups of people:
Former customers - as the name suggests - are people who’ve signed up for your offering at some point and, having experienced what you have to offer, have determined that it is no longer for them. This group typically leave for one of the following reasons:
Whatever the reason, this is invaluable intel to have. It will also help you identify at-risk customers who are yet to make the jump away from your offering.
Non-customers are people who have the same challenges and needs as your customers, but have chosen to satisfy that need in other ways (or leave it unsatisfied). Understanding their decision-making - for both groups - can help to inform your communications, marketing, value proposition and service delivery!
By understanding these through customer groups you have a good set of answers to the following strategic questions:
We've found a really useful format to communicate all this information back into the organisation is through the use of customer journey maps. This is the second thing effective organisations are good at: communicating (usually visually) the world from the perspective of people who have the need your offering helps to solve (your Market).
A good journey map has a clear narrative structure to it; it has a well-defined set of actors; it breaks the journey up into discrete interactions; and it covers the end-to-end journey from the customers’ perspective.
Most importantly, someone reading it should easily identify the answers to the strategic questions posed above, just by looking at it. There is an art to a good journey map, but the best ones are all backed by really good data and customer insights.
Organisations that can direct their resources strategically know themselves inside and out. They know what they’re good at; where they could do better; and where they absolutely excel (and need to).
These organisations also understand the structure of their industries and the business model on which they operate. That means having a clear sense how they make their money, and where their profits are generated.
They know what to measure and track how they’re performing, so that at any given moment they can tell how they’re doing.
One ingredient that can set them apart is how well they understand their employees. Some organisations think of themselves as a platform that allows their staff to deliver great service to customers, and believe that shows they understand their staff. But that’s not what we mean here.
What we're talking about here is the (rare) organisation that understands its employees in the same way it understands customers, former customers and non-customers - by being able to answer those same strategic questions about their staff that we posed earlier for customers.
Businesses that treat their employees poorly are setting themselves up for failure across a number of dimensions, from poor productivity; poor customer service delivery; high turnover and associated costs; and difficulty recruiting future employees.
The next capability is a clear-eyed understanding of what sets one business apart from another - for customers and employees alike. A good differentiation strategy and competitive positioning aren’t new ideas, but really effective organisations know how this translates into the experience - in human terms - for customers and staff.
Some questions you might ask yourself:
Finally, then, effective organisations are very good at matching all these five elements into a set of transformation priorities that strategically balance:
… and then deliver those in ways that staff will welcome and adopt.
When organisations get this alignment wrong we see high turnover amongst customers and staff; increased acquisition costs and cost-to-serve; and business metrics that are flat-lining despite massive investments.
However, when done well, each investment further enhances your organisation’s points of competitive difference in ways your customers value. Each investment drives loyalty, advocacy, and share-of-wallet; reduces cost-to-serve; and, ultimately, drives your ability to deliver a great service out to the world.