BECOMING CUSTOMER-CENTRIC – OPPORTUNITIES AND CHALLENGES

The reasons for wanting to transform into a customer-centric organisation is compelling. However, determining the major challenges and opportunities remain unanswered. Simon et al. (2016:168) surveyed 337 businesses across 60 countries to help determine opportunities critical in becoming customer-centric. The top three responses were: 1) 30.7 percent of respondents indicated they wanted to foster personal relations with customers; 2) 34.1 percent of respondents indicated the importance of collecting behavioural information from customers; and 3) 50.3 percent of respondents indicated the intent to use the collected information to develop personalised solutions. Similarly, respondents were surveyed in order to determine challenges to becoming customer-centric. The top three responses were: 1) 33.3 percent of respondents indicated the importance of recruiting and training of like-minded whole-brain people; 2) 43.0 percent of respondents indicated the continuous challenge in dealing with legacy structures; and 3) 54 percent of respondents indicated having to deal with internal barriers or challenges. According to Marjanovic and Murthy (2016:481), internal barriers relate to organisational structures, processes, financial metrics and culture in becoming customer-centric which will be discuss briefly in the next section.

5.4.1 Organisational structure

The ultimate customer-centric organisation according to (Shah et al., 2006:116), suggests to align and integrate the functional activities in an attempt to provide superior value to customers, whereas product-centric organisations are structured around functional areas and defined by product categories or type. According to Shah et al. (2006:116), a product-focussed structure is not conducive in providing holistic customer solutions as individual product/sales managers could drive various product or sales offerings to the same customers without first establishing the customers’ real needs.

However, Day (2006:1), states that organisations and their structures passionately focussed on implementing customer solutions and are evolving to closer alignment with their markets. This, according to Shah et al. (2006:116), can be achieved by: 1) coordinating internal functions across products and functioning silos; 2) appointing well-trained and well-incentivised key account managers with product knowledge to

integrate and coordinate all customer-contact functions; and 3) adopting an organisational matrix structure where customers facing departments, working hand-in-hand with back-end, product-providing departments to provide holistic solutions.

However, Shah et al. (2006:117), posit that the journey to becoming customer-centric must include changing the day-to-day activities, interests, priorities and incentives of functional departments and as such, suggesting it is necessary to develop alignment in order to balance various competing forces. The authors further state that changes to organisational structure are an important prerequisite before one can address problems relating to organisational processes as discussed in the following section.

5.4.2 Processes

The processes required for building and supporting customer relationships are different from performing efficient customer transactions (Shah et al., 2006).

According to the authors, a few generic processes are necessary in order for organisations to become customer-centric. These include that: 1) the strategy-development processes should entail a customer strategy and a business strategy;

2) customer touch points should be integrated as part of a multichannel integration process; 3) data gathering and analysis functions should be included in the information-management process; and 4) performance-assessment processes should be directly linked to an organisations performance. Payne and Frow (2005:167), argue that cross-functional coordination of the above mentioned processes is required for each in order to be successful.

Arguably the biggest challenge facing customer-centric processes is the ability to match a customer’s needs with the most suitable product or service (Shah et al., 2006:117). According to Rust and Verhoef (2005:478), personalisation at an individual level has the ability to stimulate a greater response and generate larger profits compared to any other form of customer segmentation. Thus, according to Hunsaker (2010), the best way to achieve superior customer experience and best business results, is to have workable customer-centric processes and policies.

5.4.3 Financial metrics

To transform from a product-centric into a customer-centric business requires a significant investment, hence the need to track and measure its impact both financially and on the customer (Shah et al., 2006:118). Hart in (Shah et al.,

2006:118), compares this investment to that of a virtual factory that produces untouchable outputs in the form of customer satisfaction, loyalty and advocacy. Hart (1999), posit that the main challenge exists in measuring the financial impact of customer-centricity by deciding the appropriate levels of investment in elements such as customer satisfaction and loyalty.

5.4.4 Organisational culture

Organisational culture has numerous levels and sides, and as such makes it impervious to change (Shah et al., 2006:115; Schein, 2010:2). Schein (2010:6) defines a culture as the accrued and collective leanings that enable groups to respond and adapt to external challenges, and integration internal to the organisation. At its deepest level, culture is considered to be norms or the common sets of belief employees hold on to, what constitutes suitable or expected behaviour (Shah et al., 2006:115; Schein, 2010:6). In a related vein, Coetzee, Davidson and Visser (2007:38) argues that culture establishes and regulates the limits of acceptable employee behaviour, giving effect to feelings, inspirations and a sense of belonging in an effort to contribute to organisational effectiveness. According to Wolf, Dulmus, Maguin and Cristalli (2014:2), culture is rooted into an organisation’s fabric or being, making it arguably one of the biggest barriers to change, as little or no evidence exists to prove that any direct efforts aimed at effecting cultural change will result in success (Shah et al., 2006:116). Marjanovic and Murthy (2016:481) argue that structural organisational changes can be quickly implemented, whereas human-resources changes and modification to corporate culture take much longer.

Ballantyne et al. (2011:203) and Neu and Brown (2005:9) attribute this challenge to employees who struggle to develop the necessary behaviour skills coupled with a customer-focused mindset necessary to build a learning relationship with customers.

Whilst a majority of organisations devote substantial time and resources to focus on customers, many continue to struggle to completely align themselves with the customer-centric paradigm (Shah et al., 2006:113). They continue to focus on the customer from an external perspective, whilst neglecting to properly understand the influence of vital internal processes (ORC International, 2016). From the above two key insights emerge. Customer-centricity as a whole is both complex and multidimensional in nature, which takes time to develop as a culture. Considering the focus of this dissertation, the following section explores the meaning of

customer-centricity from an internal perspective by reviewing the definitions of organisational climate and culture in the context of customer-centricity, and recommending a definition of customer-centric culture to be adopted for this dissertation.