Every retailer knows they need to get closer to their customers – but what does being customer-centric mean, and how do you actually achieve it? What are the big challenges, and where do you start?
Barnaby Moffat, commercial director and co-founder of UK e-commerce specialists Envoy Digital, shares valuable insights about how his agency is helping its retail clients place customers at the center of their businesses.
Customer-centric change comes from the top down
Digital transformation is about focusing on the customer at every touchpoint, and operating in a way that delivers ideal customer experience. This is a simple idea with potentially complex consequences.
“Going digital often means big changes from the way things were done before and touches every part of the organisation,” Moffat says. “There can be a lot of resistance, so the drivers for that need to come from the top down.”
He cites the example of a current client that has hundreds of retail stores which have been around for decades. Salespeople were used to making a sale and commission from shoppers that walk through their doors.
“Getting that team to embrace digital and not see it as a threat is a big turnaround. It has taken the leadership of the executives to demonstrate that it’s not about making the sale, it’s about adding value at every customer touchpoint. The salesperson is now rewarded for the value that they add, no matter where the sale ends up: online, through social media, or in-store. The whole value chain of that customer experience is rewarded. This is a significant shift.”
Embracing digital business
According to Moffat, the UK is fairly advanced in terms of digital commerce and customer interaction – but there’s still a long way to go.
“We’ve been involved in recent polls that show that over 50% of retailers in the UK still put omnichannel as their biggest challenge this year.” Only a few have really embraced the idea of turning themselves into a digital business.
“That doesn’t mean abandoning your physical stores and pushing all your business towards online,” he warns. “It’s about understanding how you want to interact with customers and how they want to interact with you, and designing your processes around that. It can be digital, it can be physical, and very often it’s a mixture. The difficult thing is making sure these are joined up so when a customer interacts with you, no matter what the touchpoint, the experience is consistent.”
Get to know your customers
Putting the customer at the center of your world is a relatively easy concept, but requires a long-term commitment to change. Instead of focusing individually on products, technologies, or processes, turn all aspects of the business towards the customer.
“This sounds obvious, but the first step is knowing who the customers are,” says Moffat. “Yet at best, most organizations have a patchy understanding of who their customer is and, more crucially, what they want and how they want to interact with you.”
For Moffat, it’s all about humanizing the individual customer: “It’s very easy to forget why you’re doing something. It’s about John, it’s about Jane, it’s about Andy, it’s about Debbie – those are the people we’re doing it for. If we’re making a decision and it’s not going to be in their best interests – if it’s not something that adds value to their customer experience – then perhaps we need to think again.”
Technology enables customer centricity
The customer-centricity model has evolved in the UK, and technology is now a key enabler rather than a constraint in delivering an ideal customer experience.
“In the past, we’ve seen resistance to change from a technology perspective, as the CTO was used to holding the purse strings for these types of purchases,” Moffat explains. “While the CTO might still think in terms of platforms, the picture is now broadened. Now it’s moving more towards the more customer-facing parts of the business, and customer services, sales, marketing and commerce are all part of the conversation.”
Success is measurable
In the past, different parts of the business had different KPIs: IT focused on uptime and the speed and security of the system, merchants on topline margin rate, and marketing on generating traffic and conversion rates. But as customer-centricity takes root, these are converging on newer customer-focused metrics like Net Promoter Score (NPS) and customer lifetime value.
According to Moffat, this is a logical consequence of joining together the customer interaction: “The key to being customer-centric is whether that customer is happy, so these metrics are increasingly important as they embody the whole principle behind it.”
Stay focused on the customer
To keep the entire organization focused on customer-centricity, NPS scores or customer lifetime values need to be part of every executive review meeting. “It’s easy to forget that we are consumers as well,” Moffat says. “The people making decisions around the boardroom table buy from Amazon and use online banking and other online services. It’s a change in the mindset.”
“We’ve seen success for those organizations that really embrace this principle, and plenty of examples of those that don’t,” he concludes. “You see the value of it in customer loyalty, especially for organizations that don’t sell their own brands but are a reseller of brands where the customer is extremely fickle. It’s very difficult to build a good reputation quickly but extremely easy to lose it quickly. An organization that focuses on customer satisfaction is doing the right things with regard to customer engagement, and more likely to see that lifetime value increased.”