By Curtis Bingham

I recently had a conversation with an executive wherein he suggested that a large part of his focus was in helping employees better serve their “internal customers.” But the concept of “internal customers” is a logical fallacy that focuses attention inwards on policy and procedure, creates false success metrics, and derails strategy in the creation of customer value.

The concept of “internal customers” arose during the era of Total Quality Management as a means of distinguishing the consumers of output and has been transformed into a misguided attempt by HR and others to educate employees on basic human interaction in an effort to make people “play nice.” A customer can ONLY be someone whose name or company name appears on a check. Real customers pay for goods or services. Customers are the ultimate decision-makers in determining which goods and services are produced. They define your business future. Employees are not customers. Employees have no future in a business without customers, yet a business can still deliver customer value without employees (albeit in a limited fashion).

An “internal customer” approach or “employees first” culture statement derails strategy and tactics and creates a damaging, false sense of customer centricity as well as a sense of employee entitlement. If call center managers argue over whose needs are primary – the business units they support or the customers calling the center – the paying customers lose simply by virtue of the distraction of the argument. Focusing on internal customers results in a myopic view of policies, procedures, and metrics, often at the expense of customer service and customer value. IT departments worldwide are notorious for focusing on internal customers. They minimize risk and expense and hamper sales’ or marketing’s ability to serve real customers. Consequently, the marketing discipline is now on the verge of systemically co-opting IT departments in order to correct this damaging imbalance.

For example, a large Canada telecom company reduced IT staffing in order to cut costs. There were many unanticipated consequences, including one instance where a lead salesperson was locked out of customer account databases for 5 days and unable to generate quarterly revenue. So one of the company’s customer-focused executives then recast the IT mission to enable company employees to deliver outstanding value to customers. This simple shift energized and focused IT employees and insulated the department from future cost-cutting efforts.

In the “employees first” model, “internal customers” place themselves on equal footing with external customers, jockeying for position, resources, and status that may damage the company’s ability to serve paying customers. Employee expectations of quality and service cannot trump the mandate of external customer focus. If customers are a business’s raison d’etre, an employee’s existence must be predicated upon delivering outstanding and profitable customer value. Every employee’s purpose must be tied to some customer outcome. Otherwise, what real value does that employee serve? They must be tasked in such a way that they are partners in delivering customer value.

“Employee first” cultures have no place in business. Executives need to create a singular focus on profitably delivering increasing customer value and they must engage employees as critical partners in that delivery. The correlation between engaged employees and satisfied customers/increased revenue is well established. But their priority order must remain: customers first.

By Curtis Bingham

The advent of social media has thrown companies back to the Dark Ages. Customers have taken to the streets, complaining about anything and everything. Forward momentum has ground to a halt as companies spend an inordinate amount of time scouring social media sites, trying to find dissatisfied customers, putting out fires before they become conflagrations, and offering discounts to make up for mistakes. All these efforts are a huge drag on resources, time, and forward momentum.

Or is it really as bad as all that?

In truth, many of business’s ills used to be hidden from view. Customers didn’t complain; they didn’t have a venue. Posting a sign on a downtown NYC street corner saying, "Listen to me whine!" didn't do any good. Customers simply left. And companies didn’t really care, because even if disgruntled customers told eight people, it was only eight.

But now every customer has a megaphone and a Jumbotron to reach the largest, most crowded stadiums in the world. No longer can companies get away with ignoring customers who don't complain loudly enough or who don't know the CEO well enough to escalate issues to his personal attention. No longer can companies get away with ignoring customers they hold captive. Those customers now have channels to severely dissuade new customers!

Although painful, it is a wonderful thing that this dirty laundry is aired for all to see. Even though it slows forward momentum. Even though it causes a firestorm in the Twittersphere. Companies need to embrace this model fully as they halt the presses and fix the basics of their businesses. Only by resetting in such a fashion can they lay the foundation for forward innovation as they leave the Dark Ages of customer disregard and enter the Age of Engagement; where customers are heavily involved in every aspect of the modern business.

By Curtis Bingham

Let’s face it. The customer is not always right. And persisting in this belief can have consequences. Sometimes, the best thing you can do for a customer is to gently and politely tell them, “No.” 

Airbus, one of the world’s largest jet manufacturers, is pushing back on the airline industry trend towards smaller seats. It used to be that nine-across seats were standard, and many airlines are moving to 10-across and thinner seats with less padding. Of course, the airlines are all about saving weight and adding more paying passengers to each flight. Last year nearly 70% of Boeing’s 777 planes had an extra seat squeezed into each row. But, this latest push to narrow the seat size from between 18-19” to 16.7” wide has caused a backlash amongst travelers.

Some claim that a "coffin has more shoulder room," or that "airlines might as well do away with seats altogether and use straps like on the subway." Travelers are complaining to the airlines and are even taking out their frustrations on Airbus and Boeing. Airbus, to its credit, is doing consumer research of its own and is advocating a minimum width of 18" as it improves passenger sleep quality by 53% over 17" wide seats (and I would expect 100% over 16" wide!). 

In a related vein, a financial services company manages the flexible spending accounts for a number of big employers. Yet each employer sets the standards on how strict to be in examining the employee expenses submitted for reimbursement. Some restrictions are very severe, causing a significant but misplaced customer backlash against this financial services company that might be spilling over and damaging its consumer brand.

You work very hard to build and protect your brand. You work hard to create a great customer experience. Why would you let your customers ruin the brand and experience for the consumers?

The most effective customer executives and brand marketers take ownership of their brand and customer experience all the way through the value chain to the end consumers. Even though it may not be popular (as in the case of Airbus) consider defining minimum service and experience standards. Demonstrate wherever possible the longer-term benefits of customer loyalty and engagement over short-term profits. Or perhaps you can show your distribution channels how to deliver even greater value that far outweighs cost cutting; for example, by putting in power outlets in each row, as Alaska Airlines is doing. Personally, I’ll pay a lot extra for standard seats AND power for all my devices, especially now that the FAA has allowed all devices to remain on throughout the flight!

By Curtis Bingham

If you want to grow your business while simultaneously increasing customer loyalty, the chief customer officer (CCO) might just be the silver bullet you are looking for. The CEO is uniquely responsible for shareholder return, the COO for cost-efficiency, the CFO for the company's financial well-being, the CMO for market awareness, and the EVP of Sales for quarterly revenue. One executive must be held accountable for not only the strength of customer relationships but especially customer value (i.e., the value of a customer to your company as well as your value to the customer). This customer champion must be able to properly weigh customer needs against revenue, cost, and other strategic business drivers. As well, the role of customer champion must be an executive-level position to effectively gain trust in customer and prospect organizations as well as drive change throughout many different divisions.

By Curtis Bingham

It’s a challenge for the CCO, as well as any loyalty executive, to prove value and get it right in the first two years, much less the first. Even though 67% of companies with CCOs outperformed their industry and markets in 2010, it is the most fragile member of the C-Suite, with an average tenure of 31 months based on research conducted by the CCO Council. In my interviews with successful CCOs, one central thread running through our conversations has been the importance of using data to prove the CCO’s value in those first two years. Even a seasoned executive can become overwhelmed or distracted by the job of managing and making data relevant, so here are three best practices to help ensure your data effectively improves your perceived value.

Let the Data Speak – Not Swallow You Up
Collecting and building data is a first essential step in connecting you to improved fiscal results. But rather than making data a central focus of your job, it should be used to inform you of the critical areas where your energy can be focused for greatest impact. Analyzing data should not become the big black hole you lose yourself in. Padded with a little appreciative inquiry, quality data will paint a clear picture for where you can improve delivery of value to the customer. 

Connect to the Customer Using Data
In some companies, the CCO has no direct ownership over processes that touch the customer, making it incredibly important for the CCO to connect her role to customer satisfaction. She does that by constantly measuring and monitoring customer feedback, customer loyalty, and customer satisfaction. Connecting to the customer allows you to figure out what drives customer satisfaction and repeat revenue. It gives you critical traction to deliver your point of view to an executive team. It helps you frame compelling messages to deliver to your teams and customers, and provides the needed borrowed authority to boost the perception of your value.

Own the Customer’s Voice and Make it Visible With Data
Successful CCOs are spending a lot of time communicating stories internally and externally; stories of revenue impact, turnarounds, customer loyalty improvements, etc. At the end of the day nothing speaks more loudly than a great track record and excellent execution—so use your borrowed authority as the voice of the customer to create a buzz around customer or organizational successes, and to plot the road map for continuing relationships. Data may change or disappear, but people will remember stories, and ultimately, the stories you collect persuade others to action.

Question to consider: how adept are you at translating/framing customer data for your executive team?

By Curtis Bingham

Most companies have only two communications channels with customers: sales and complaints. Both of these are important: companies need to sell and customers need ways to seek redress. But neither tells a company what customers need in order to be successful. To ensure success, you must continuously discover and deliver what you know your customers and prospects need, want, and are willing to pay for.

There are four steps to success in this process:

1. Proactively listen to customers in an organized, meaningful fashion
2. Make customer data actionable
3. Drive customer valued change throughout the entire organization
4. Measure effects of the change

The first step is critical for the success of the remaining three.

Customer Insight Conduits
The fastest way to gain real insight into what customers need and want is by establishing Customer Insight Conduits. These Conduits help bridge the gap between company capabilities and market or customer needs.

Customer Insight Conduits are defined as channels through which information passes primarily from customers and the marketplace to a function within the company that is able to make data actionable and drive customer-valued change throughout the organization. These Conduits provide an early-warning system for problems. As problems are recognized, the Conduits serve as a diagnostic tool to help fully understand issues and determine the efficacy of solutions. In addition, the Conduits are a measurement vehicle to assess overall customer value and other metrics.

Here is just a handful of Customer Insight Channels that could be leveraged as a key component to help gather customer data that is then converted to insight, made actionable, and used to drive strategic, customer-centric change throughout the organization:

• Customer advisory boards, comprised of economic buyers of your products/services from an appropriate sampling of the customer base
• Technical advisory boards, comprised of those who are actually going to be using your products or taking advantage of your services
• Customer conferences, where you roll out new products and/or service
• Chat rooms and discussion boards that you host or monitor or both and where you gather ideas and identify problems through product discussion forums
• On-site assistance for a day, in which you send an engineer, consultant or other appropriate person to a customers' site to help them gain the full benefit of your product/service

Using Customer Insight Conduits such as these and many others, companies can gain critical insight that, when made actionable, can:

• Develop successful products and services
• Differentiate from competitors effectively
• Improve prices and margins
• Attract & retain more profitable customers

What channels is your company using to discover and utilize customer insight?