Embracing Digitally Enabled Customer Outcomes
Although most organizations are taking on digital transformation work in 2021, all organizations would benefit from transforming their organization to be obsessed with identifying, tracking, and improving customer outcomes. Go beyond your digital transformation initiative and embrace digitally-enabled customer outcomes by delivering a frictionless customer experience. One sure-fire way to attain sustainable, predictable revenue is to consistently delight your customers, achieved by solving for and tracking against the outcomes they care about most.
Your customers are the single most powerful lever to fuel sustainable growth, yet internal politics and corporate posturing distract from this foundational maxim of business. As a pioneer of modern business management, Peter Drucker said, “there is only one valid purpose of a corporation, to create a customer,” which is as true today as it was back in 1954. Yet, it’s perplexing when so many companies proclaim to be customer-centric, customer-first, or customer-obsessed while simultaneously failing to properly identify and track against the simple outcome of a delighted customer. Companies that transform their culture and operations to adopt outcomes-focused first and foremost on customers will increasingly outperform competitors and be better optimized for accelerated, differentiated, and defensible growth. An example of a measurable customer outcome is the customer effort score, which is the quantification of how easy your products and services are to use. By tracking and working to improve customer effort scores, you will gain additional, and more loyal, customers as well as identify friction points in your customer journey. See how to measure customer effort score and many other critical leading and lagging indicators by downloading SBI’s Customer Scorecard.
Unsure of what metrics matter most to customers? Ask them. It’s really that easy. While having an open-ended discussion with customers about what matters most to them, keep these two critical components in mind to measuring what truly matters. First, it must be an outcome that customers say is important to them. Second, it must be measurable in increments of customer value, i.e., time, convenience, number of options, and/or dollars saved. Pretty simple.
Don’t Abandon Digital Transformation, Augment It
Now more than ever, obsess over customers. This might sound obvious, but your customers are your fuel for growth. As such, a tenet of delivery at SBI is to take an outside-in approach and think of the customer’s perspective when optimizing sales, marketing, and customer success motions. Taking on the lens of the customer requires a disciplined approach to consistently assess what is most important to them. As more and more commercial activity becomes virtual, CEOs are prioritizing digital investments by addressing key points of friction in the customer journey. Leverage your digital transformation efforts to eliminate friction by delivering additional digital content, providing the ability to demo on a self-serve basis, and order and contract digitally. Again, the key here is to make doing business with you as easy as possible.
The more your company’s attention is focused on customer outcomes, the better your company results will be across critical areas like revenue growth, retention, and churn reduction. Too often, leaders focus primarily on inputs and outputs of the firm, but minimal time is spent on whether customers are frustrated, satisfied, or delighted. However, one of the most critical pieces of information about the future health of an organization concerns the results of what the firm does for its customers and whether they are either being delighted or frustrated. Outcomes, not outputs, should drive your transformation process. At a strategic level, this means customer outcomes should replace return on investment as the driver of successful execution. ROI is an internal, uninspiring metric, whereas passion, vision, and alignment can be derived from customer outcomes. The result of those outcomes will ultimately determine whether your company grows, stagnates, or fails.
Align Customer-Facing Teams with Customer Outcomes
Similar to the way transformation is thrown around as a corporate buzzword, alignment as a term gets tossed about haplessly without much clarity on how to actually achieve it. Although easier said than done, one of the best ways to achieve internal and external alignment is to ensure your customer-facing teams are customer outcome obsessed. It sounds like a no-brainer to make sure your customer-facing teams are measured against client outcomes. Still, it is the exception when we find sales, marketing, and customer success organizations explicitly measured against customer outcomes like making it as easy as possible to do business with you (customer effort score) or resolving customer issues as effortlessly as possible (first call resolution).
When employees are only measured on and compensated for MBOs or KPIs, they are naturally incentivized to do whatever is necessary to achieve that outcome for the company. As a result, customer outcomes are often sacrificed for those of the individual or company. However, when employees are accountable to customer outcomes, they are motivated to help customers achieve their desired outcome. By emphasizing and incentivizing customer outcomes, you will align employee and customer interests toward shared success.
Transformation That Endures
The measurement of outcomes and customer delight requires more than adopting a new set of terminologies and tools; it’s a different way of thinking, speaking, and acting in the workplace. Leaders committed to measuring and tracking against customer outcomes will derive a competitive advantage in the form of more, and more loyal, customers than their peers who are predominantly focused on their own internal performance metrics. For those with eyes to see, it’s plain to see. The most successful firms are those pursuing what Peter Drucker long ago saw to be “true North” for a corporation – delighting customers.
See how your company’s customer success strategy ranks by taking the RGMM here.