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Riding the Wave of Inflation: A Customer-First Mindset

By Camille Nicita, Managing Director, Gongos – part of InSites Consulting

From gas pumps to grocery lists, inflation is taking its toll on consumers. In response, more than 80% of Americans are planning to rethink or reduce their spending in the next three to six months and over a third are looking to buy cheaper brands. Even goliaths like Walmart, Target, and Netflix have lost customers or experienced slowing growth amid consumer spending shifts.

As Americans search for areas to cut back, brands can learn from other times of turbulence as they look to develop novel ways to nurture more reciprocal relationships with new and existing customers. Enduring brands will truly understand and deliver on the differentiated value they can, or have the potential to, deliver to customers to prevent them leaving for less expensive alternatives, or completely from the market. Beyond cost-cutting measures, this kind of economic uncertainty often comes with innovation opportunities once unforeseen.

How Inflation Impacts Customers

Rising prices impact how customers shop and spend. With the latest data illustrating the highest levels of inflation in the U.S. since 1981, despite the 5.5% wage growth over the past year, consumers are starting to see their purchasing power erode. Unfortunately, this isn’t expected to end anytime soon.

At the same time, amid supply chain issues and inflation for raw materials, businesses seek ways to cut costs. This poses a dilemma for brands: how, when, and what should be adapted with respect to the final product and service customers receive. There are three common scenarios:

For most brands, any of these scenarios is less than ideal, and if poorly navigated, can be catastrophic. By shifting focus to value creation for the customer and prioritizing customer loyalty through other means, brands can position themselves for long-term growth.

Inflation as an Opportunity

Amidst inflation, while many consumers cut back, they don’t cut back uniformly. Rather, they often sacrifice a want for a need. For example, families across the country are sacrificing summer travel and dinner date nights in order to pay for rising fuel and grocery bills, fix the leaky roof, and save for anticipated “rainy days.” But if brands are able to create and sustain value for customers, price becomes less of a determining factor. The key is to set the customer as the true north, and map out a pathway that leverages human understanding as the guide.

Times like the present provide an opportunity to hone in on customers’ individual goals, values, and motivations. Once those factors are internalized by brands, products and customer experiences can be refined and serve as foundational for future strategy. We can’t always predict external factors, but understanding consumers as humans enables brands to identify new innovation opportunities in the wake of volatility because that empathy drives a deeper connection and the ability to sync with consumers’ enduring needs.

Taking a more human-centric approach, one that practices empathy, communicates in a meaningful way, and positions the brand as relevant even through difficult times is easier said than done. Investments in consumer understanding are often the first on the chopping block when companies engage in cost-cutting. However, gaining and retaining customer loyalty is not a short-term game; and companies that de-prioritize the customer do so at the risk of longer-term shareholder value.

The Interrelationship Between Customers and Employees

When we think about taking care of customers, taking care of employees should go hand-in-hand. After all, employees, especially those on the frontline, are the most direct reflection of a brand’s promise and the window into a customer’s experience. Too often, we see organizations resorting to cutting employee expenses as a way to provide short-term relief to the balance sheet. But in doing so, brands expose themselves to long-term risks, including:

Building strong employee relationships isn’t easy and it isn’t quick. It requires resources and cultivating a true understanding of one another. But the hard work of establishing employee loyalty built through difficult times results in stronger commitment during good times.

Focusing on the Customer Has Always Paid Off

This is not the first time brands have been forced to change their approach to a turbulent market. During the Great Recession (2007 – 2009), the most resilient retailers were able to drive 11 percent annual growth. In fact, some of the biggest named companies found opportunities to pivot and succeed during recessions. Microsoft created their consumer segment instead of its sole B2B focus in 1975, Apple created more customer-centric devices and advertising after the dot-com crash of the early 2000s, and Warby Parker was founded right after the Great Recession, when customers who still needed glasses couldn’t find them online. These brands found their consumer connection and used it to generate unparalleled success. For companies looking to manage the impact of inflation while still keeping brand loyalty, these examples go to show that the best, and most pioneering, companies always put customer needs at the center of their innovation strategy.

Taking a customer-centric focus over drastically cutting costs or engaging in shrinkflation is the best way to gain and maintain customer loyalty. Customers will look to shift their spending, but it won’t be equal for every good or service. By listening to customers, understanding their values and motivations as humans, and sharing in the challenges they experience, a brand can successfully stave off the negative impact of inflation and position itself for long-term growth.

As published in Forbes.

By Camille Nicita, President & CEO, Gongos, Inc.

It’s common business vernacular that a happy employee makes a happy customer, which makes sense as employees are often on the front line when it comes to inspiring lifelong customer loyalty. Alternatively, disengaged and unmotivated employees can have devastating effects on an organization’s bottom line. Research shows that only 36% of employees report being engaged at work.

Mobilizing a customer-committed employee base requires leaders to shift mindsets from “I have to do this or I will get in trouble” to “I am doing this because I understand and believe in it,” which may seem like a tall order.

Through education, co-creation and positive reinforcement, leaders hold the power to inspire an employee base that is not only committed but fired up to deliver best-in-class customer experiences.

The Key to Connection Is Context and Resonance

The key to employee motivation differs from how executives are motivated. Executives can often see how actions drive topline business results and the impact those results have. When it comes to employees, the link to business success is a little more indirect. Fortunately, employees are often looking for purpose and meaning in their day-to-day, and by linking company purpose to human-centered customer goals, they can better understand, relate to and champion their role in the customer journey.

To put this into context, many organizations frame and anchor goals with respect to business-centric KPIs as a measure for success. For example, a company may set a KPI to increase customer lifetime value (CLV), net promoter score (NPS) or customer effort score (CES) by X%, which is something an executive can understand and latch onto. Since they’re beholden to deliver against it, it holds a lot of importance and weight with them. Take that same goal through the lens of the average employee, especially front-line employees who are most visibly tied to customer experience, and not only is it going to hold less meaning, but they’re also not going to know how to influence it or how to take action to achieve it. This creates a disconnect for many organizations because employee engagement is essential to move the needle on business-centric goals, like CLV and the like.

Motivation Moves Mountains: Linking Business Goals With Customer Goals

To bridge the disconnect, leaders would do well to reframe less accessible business-centric KPIs in the context of human-centric customer performance indicators (CPIs), a term coined by Accenture Interactive. Unlike KPIs, CPIs focus on the social, emotional and functional goals every human strives to achieve in his or her life. So, regardless of an employee’s position, tenure, expertise or background, CPIs are engaging and intuitive with respect to how they benefit not only the customer but how they fit into the equation of serving both the customer and the organization. Through this model, instead of saying, “We need to increase X or Y metric,” you’re saying, “We need to help our customers feel a greater sense of accomplishment or save time while doing it.” Truly human-centric metrics translate well to both sides of the equation — customers and employees.

Whether the business is a fitness chain or a discount retailer, an employee sitting in any seat within the organization — from customer service to finance to marketing — can grasp what the customer is striving for and how they can be empowered to support that outcome.

Mobilizing Employees Toward Customer Commitment

Below are a few actionable steps to reframe business goals and rally employees to join the mission in making your customer-committed vision a reality.

  1. Understand, align and articulate. Ensure your leadership truly understands and can empathize with the human-centric goals that your customers wish to achieve. This requires going deeper than NPS or CSAT (customer satisfaction score). While these are important metrics, they are one-sided, focused on what the business wants to achieve. Leverage that understanding to align on your customer-centric vision, goals and mission. Communicate it and make sure it resonates with employees, thereby guiding their sense of fulfillment in their daily actions and decision-making.
  2. Co-create. Bring employees along as co-pilots to help structure the best customer experience possible. Use intel from the front lines to establish processes and systems that empower employees to act with empathy and put customers’ best interests at heart.
  3. Educate. Train employees to develop empathy for customers and establish a purposeful knowledge of how they play into the bigger picture. One way businesses can do this is by replicating customer experiences and having employees immerse themselves in these stories. Each employee should be able to articulate the ways in which they’re creating value for customers.
  4. Share information. Create processes that break down internal barriers so customer data flows freely throughout the organization from the bottom up and the top down. Using this information, leadership can continually use information from the front lines to establish better processes and programs to exceed expectations.
  5. Reward. Acknowledge outstanding employee performance and create tailored incentive programs tied to stellar customer outcomes. When goals are met, and the organization can tie customer successes to business outcomes, that’s when reward systems have the ability to truly change not just behaviors but operational systems.

The Takeaway

There is concrete proof that helping customers achieve success creates business value, which dispels the myth that executives must let profit slide when embracing customer-centric strategies. Cultivating an engaged employee base is the key to positive customer outcomes. By taking the time to complete the above steps, employees will feel more empowered, committed and connected to deliver on creating value for customers, which, in turn, helps the company’s bottom line.

As published in Forbes.

By Camille Nicita, President & CEO, Gongos, Inc. 

When it comes to upselling and loyalty programs, consumers live in a world full of rewards offers, frequent spending plans and other programmatic ways of building lifetime value. Rightfully so, as research shows that companies that lead in earning customer loyalty “grow revenues roughly 2.5 times as fast as their industry peers and deliver two to five times the shareholder returns.” Moreover, the global market for loyalty management sat right around $7.3 billion in 2020.

With such high investment and even higher customer expectations, there’s never been a better time for brands to understand what is most valuable to customers — but first, you must understand what value means to them beyond the notion of value for the money.

Instead of spending millions on one-sided programs that push product and frequency of purchase, I think brands ought to steer initiatives toward providing a more reciprocal value exchange to customers. And what better way to do that than aligning programs to help customers achieve the goals that are most important to them? To achieve this, you must first invest in understanding customers’ goals — through what Accenture Interactive calls Customer Performance Indicators (CPIs). Our consultancy has since built a patent-pending growth model based on customer goals — or CPIs.

Two Dimensions To Operationalizing Customer Centricity

Operationalizing customer centricity is no longer an enigma; we explored and mapped a combination of Andy Hines’ model of post-materialist consumerism and his global values method, as well as the Bain & Company value pyramid, to identify 15 universal CPIs that appeal to all customers regardless of brand affinity or product category. These CPIs go beyond needs as customers and dive deeper into emotional, social and functional needs as humans. After completing the task of evaluating which CPIs are most important to customers for individual brands, the two dimensions of operationalizing customer centricity become clearer: understanding and delivery. 

Reframe Your Business Outcomes Through the Lens of Customer Outcomes

Juxtaposed against the typical model of “evaluate” our current customer experience and “repair” the items that aren’t satisfactory, the notion of delivering on customer-stated goals provides brands with a true opportunity to discover and build a value-led future with customer needs as the foundation.

Walking The Talk Of Customer Centricity

Beyond understanding customers’ goals and delivering on them, there are several common themes among customer-committed brands. Below are four actionable concepts that I’ve noticed have been adopted by leading companies to deliver on and champion true customer centricity.

  1. Measure up to customers, not industry-specific competitors. As Jeff Bezos so accurately stated, “If you’re competitor-focused, you have to wait until there is a competitor doing something. Being customer-focused allows you to be more pioneering.” These days, many customers no longer evaluate brands against other brands that provide similar products or services. Often their standard of excellence is industry-agnostic, and they expect the same level of experience from their local coffee shop as they do when booking a flight. Hold yourself accountable to your customers, not to your competitors, and of course not to your shareholders.
  2. Focus on customer-centric innovation. Customer-centric brands hone a relentless focus on delivering on customer needs and minimizing pain points with respect to innovating products, services and experiences. Approach innovation through a human-centered lens, and employ design thinking principles to find new and unexpected ways to deliver on customer needs.
  3. Invest in human capital. Optimizing organizational design and resources to elevate the customer experience is key. Organizations often find, through the development of a CX strategy, that their structure is not designed with the customer in mind. To implement these strategies, it is often necessary to revisit headcount, structure, roles, education and training to ensure that teams are set up for success in delivering on the desired experience.
  4. Translate customer-centered goals to frontline employees. The goal here is to create a company culture that is obsessed with the customer. You can achieve this by effectively and consistently articulating customer goals to frontline employees, so they can understand, believe in and help champion them through the customer experience.

What Leaders Can Learn

Oftentimes, leaders have good intentions when it comes to aligning with customer goals, but with business in general, the bottom line and operations can get in the way and offset insights that show you how to put customer-centric practices into play. It can feel like you’re helping one party while hurting another — like robbing Peter to pay Paul.

By using CPIs — and the notion of value exchange — as a decision filter and asking yourself, “Is where I’m investing in my business moving us closer to value creation for our customers, or not?” you can bridge the divide with the confidence to make empowered and strategic business decisions that will create more loyal customers and positively impact growth.

As published in Forbes.

Customer centricity may be an overused term. But when it comes to financial services clientele, an advisor is seen as a lifeline, a partner, and ultimately someone who helps you visualize your future.

But in the tightly-woven triad that is corporate teams, financial advisors, and investment customers, it takes more than customer service, brochures, and market indicators to build empathy and trust. It takes the kind of shared vision that has you thinking like your customers, not just about them.

With nearly 7 million investors throughout the U.S. and Canada, our client knows what it needs to do to uphold its ranking as one of America’s Best Companies to Work For. Its employees reap deep satisfaction helping investors envision their futures. And building true understanding among employees becomes the glue that leads to customer lifetime value and enduring relationships with those they serve.

With this deeply engrained in its company mission, our client took the necessary steps to ensure an outside-in perspective to understanding its customers informed inside-out strategies to consistently deliver on its promise to customers.

In 2018, corporate teams embarked on a journey to assess and align on their customer-centric pillars. While executives unanimously agreed that the customer perspective is central to the organization’s growth, they also were aware of the internal barriers impeding them from operating in an ideal state.

In their case, they weren’t harnessing the wealth of frontline knowledge, and instead were relying on a demographic and behavioral-based view of their customers. Furthermore, they lacked mechanisms to infuse a more contextualized portrayal of customers across functional areas of the company. At best, this led to operational inefficiencies. At worst, it led to attrition caused by inconsistent customer experiences. In all, this organization was struggling to leverage its advisors to become a source of information about their customers, and act as the organizational advocate for customer-centric strategies.

While its marketing department was earmarked to spearhead this initiative, its hands were tied with other internal objectives. Hence, a partner that understood how to embed an outside-in perspective to facilitate collaboration across teams was imperative. It was also necessary for a partner to bring forth an unbiased customer-first ethos.

Up against those barriers, a mini work session with key stakeholders from marketing and insights helped to crystalize the vision of the work ahead, align on objectives for a department-wide workshop, and craft the central narrative underpinning the breadth and depth of their customer base. Four workshops with over 100 stakeholders brought clarity to the non-rational customer needs and armed stakeholders with a strong understanding of the company’s client-centric vision and their role within it.

Exploring the client journey from the early stages of identified needs to the vision of a transcended relationship provided a framework by which to write the customer into the organization’s DNA. This work was so pivotal to evolving employee mindsets that similar workshops will be conducted to further evangelize client-centric strategies throughout the company.

In a business that runs on relationships and empowers entrepreneurial spirit and ambition, aligning stakeholders spanning 12 distinct sub-regions is no small undertaking. Especially when an organization’s compensation structure has remained unchanged for decades. But those with the most influence across the Americas, Asia-Pacific, the Greater China region, Europe, India, and Russia needed to buy into — and become advocates for — a comprehensive global initiative that represented a fundamental shift in its business model.

With the introduction of a new earnings program, this nearly $9 billion organization faced a substantial hurdle to revamp and streamline its operations related to its core compensation model. Monetary incentives, recognition, advancement, and the development of future leaders are the tenets that drive company growth. Yet a system riddled with complexity and inscrutability over the years was leading to short-term focus at the expense of long-term sustainability and profitability.

Grounded in change management principles, a systemwide launch was met with careful handling and executional planning. A multi-phased, multi-dimensional program built on consistent global metrics, compelling communication, internal branding and packaging, and multi-tiered training and support tools was a prerequisite. As well as a trustworthy partner that could comprehend the intricacies of its business.

Foundational to its onset, a series of executive strategy sessions set the initiative up for success by identifying champions in each market and essential messaging strategies to overcome early barriers to adoption. Throughout the process, ROI needed to be proved out through the measurement of results during planning and design phases. This would ensure the sustained progress through feedback loops and adapting approaches along the way. Furthermore, continuity among compensation plans across global markets amid varying monetary systems and governmental regulations had to be thoroughly interpreted and illustrated for enterprise-wide compliance.

Beyond a wide and deep internal communications and educational campaign, playbooks and collateral were developed and adopted by global sales and marketing teams, and aligned with best practices within regions. Lastly, top-tier executives in the organization were armed with materials for in-market presentations with key stakeholders. Not only did this bring clarity to complexity, it created a platform of respect built on the organization’s long-held values.

Preliminary results of the roll-out indicated that the plan was more readily adopted than any other in its history. The company has also experienced a substantial decrease in back-tracking and re-training, thereby reducing operational costs.

Ultimately, the implementation of the program led to a new formula that motivates and rewards stakeholders not only for generating profit, but long-term stability and growth. Moreover, it established itself as a viable and pivotal point by which the organization has reoriented itself for the next generation of its business.

We make customer centricity happen.From customer understanding to strategy and implementation, we stand at the ready. Contact us now.