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CUSTOMER CENTRICITYA JOURNEY, NOT A DESTINATIONPOINT OF VIEW

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CUSTOMER CENTRICITY – A JOURNEY, NOT A DESTINATION | POINT OF VIEW

S T R A T E G Y A N A L Y T I C S T E C H N O L O G Y M E D I A C R E A T I V E

Customer centricity – what’s the big deal?In the world of buzzwords, customer centricity is establishing itself as a solid contender among its peers, though terms like value-add, synergy, bleeding edge and thinking outside the box rival it for all-star status. But if you’re really serious about transforming your business to thrive in a new marketplace of digital media and sales channel proliferation, customer centricity is not just a buzzword. It’s an increasingly critical business strategy that is being pushed to the forefront of forward-thinking companies big and small, new and established, traditional and revolutionary.

Consider Amazon.com’s corporate mission statement:Our vision is to be Earth’s most customer-centric company; to build a place where

people can come to find and discover anything they might want to buy online.

Contributing further to the legitimacy of customer strategy as a business strategy, author Ranjay Gulati, in his work (Re) (Organize) for Resilience, Putting Customers at the Center of Your Business, presented empirical evidence that truly customer-focused companies drive higher shareholder value than product-oriented organizations. Gulati tracked nine diverse companies and their performance from 2001 through 2007. They were selected for their varying business models and their genuine commitment and actions toward an outside-in, or customer-centric perspective. In that period these companies have delivered shareholder returns of 150 percent while the S&P 500 has delivered 14 percent. They’ve also grown their sales 134 percent while the S&P 500 has grown just 53 percent.

That kind of success doesn’t come easy, though. In fact, according to a 2009, Forrester Research report titled, Answers to Five Frequently Asked Questions About CRM Projects, Forrester Vice President and Principal Analyst, Bill Brand, presents that the failure rate for CRM implementations is 47%.

So what’s the secret to success that seems to come easy for some marketers and evade others? Building an enterprise-wide customer-centric strategy can be a very lengthy and complex undertaking, involving dozens or hundreds of decisions over a long period of time. The good news is that successes can be achieved every step of the way that justify the overall initiative. In our experience, the following three foundational elements are absolutely critical to the successful implementation of customer-centric business strategies.

Keys to SuccessTreat it a as a transformation, not a project – In our experience, those organizations that implement customer centricity as a static project with a beginning and an end, rather than an ongoing transformation initiative, tend to struggle with adoption and driving maximum impact. Customer centricity needs a strategically-led vision that an organization can rally around. It requires c-suite buy-in and advocacy. It must be inspirational and supported by a real business plan with believable impacts on customer experience and measurable economic value creation. Without these things, customer-centric initiatives can often be discounted by employees as “flavor of the month efforts.”

PEOPLE

TIME

PROCESS

TECHNOLOGY

Vision, planning and governance drive the development of new customer-centric processes and capabilities

Governance ModelTeam DesignMaster Vision and Plan

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Run the business and change the business – Companies don’t have the luxury of putting daily responsibilities on hold while they “re-invent” their business. Stakeholders in customer-centric initiatives almost always have “day jobs” they have to perform while steering change programs like customer centricity. To deal with both the long-term nature of change and the pressing needs of the daily business, customer-centric initiatives must be anchored in a shared and consistent vision. When they are implemented against a long-term plan but delivered in finite and discrete chunks, they lead to higher success rates. These plans must be comprehensive across the major areas impacted by such an effort – commonly marketing, sales, service and technology – and sequenced to deliver change and value in short cycles. A stepwise approach aids in dividing the overall initiative into manageable chunks. This allows for the completion of manageable projects within the overall plan, generating incremental impact, which builds good will and gets the flywheel of momentum spinning. Big bang initiatives are almost always frustrating, often fail to deliver on the expected value and tend to test the patience of executive management.

Governance and collaboration – It takes a village to put the customer at the center of a company’s strategy, from product and services delivery to customer insights and measurement. Generally it’s a full assault on the people, process and technology dimensions of the organization. To successfully deal with this type of change and potential disruption, customer-centric initiatives need a strong cross-functional and senior level governance structure with a high interaction and decision-making cadence. Groups that do not have the right senior level involvement will struggle with pushing through barriers that will inevitably arise. They will also suffer from the lack of high-level buy-in that insures ongoing organizational commitment and executive “cheer leading” as successes begin to roll in. Cross functional membership is a given as is a high rhythm of communication, involvement and decision making. Successful customer-centric initiatives are top of mind throughout the organization and are constantly debated and discussed. Typical quarterly steering committee meetings do not afford the intimacy and personal “skin in the game” among execs that is necessary to truly drive customer centricity across the organization.

About Merkle Inc.Merkle is one of the nation’s largest and fastest growing customer relationship marketing agencies. For more than 20 years, Fortune 1000 companies and leading nonprofit organizations have partnered with Merkle to maximize the value of their customer portfolios. By combining a complete range of marketing, technical, analytical, and creative disciplines, Merkle works with clients to design, execute, and evaluate Integrated Customer Marketing™ programs. With more than 1,500 employees, the privately held corporation is headquartered near Baltimore in Columbia, Maryland with additional offices in Boston, Chicago, Denver, Little Rock, Minneapolis, New York, Philadelphia, Seattle, Hagerstown, Maryland and Shanghai.

About the AuthorChris Crayner has developed and led customer marketing strategy, initiatives and functions for more than 15 years across the media and entertainment, pharmaceutical/consumer package goods and financial services industries. At Merkle, he leads the travel, media & entertainment and consumer retail goods bsuinesses focused on integrated marketing and CRM. Most recently he spent 7 years at The Walt Disney Company leading customer relationship marketing areas at the corporate level and Theme Parks and Resorts. He served as Vice President, Global Customer Managed Relationships for Walt Disney Theme Parks and Resorts, responsible for customer relationship marketing strategies and initiatives worldwide. He has also served as Vice President, Technology – Corporate Brand Management where he led CRM business and technology strategy work across Disney’s diversified businesses.

For More Information, Contact: Chris Crayner Senior Vice PresidentConsumer Goods, Travel & Entertainmentccrayner@merkleinc.com

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CUSTOMER CENTRICITY – A JOURNEY, NOT A DESTINATION | POINT OF VIEW

S T R A T E G Y A N A L Y T I C S T E C H N O L O G Y M E D I A C R E A T I V E

9/2011

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