Customer-centric organisations are built around the customer. They measure success from the point of consumption back to the point of creation; they are functional and organisationally agnostic. While the phrase is becoming increasingly mainstream, truly customer-centric organisations are few and far between.
Customer-centricity isn’t easy to get right. An example that encapsulates this has been the introduction of paper straws; they are beneficial across the whole supply chain, they biodegrade, they are cheap to produce, and they contribute towards plastic reduction. Some might say this is a customer-centric innovation. However, most of the paper straws I have used recently have dissolved into a pulpy mush! You have to question whether the customer was really considered when the decision to develop and introduce them was made. While they deliver plenty of good, the strategy doesn’t put the customer at the heart. That’s the difficulty with being customer centric – you can get a lot of things right but fall at the final hurdle.
Why are they important?
To truly understand the end-to-end impact of decisions, greater collaboration is needed to access insights across the value chain. The fact is, supply chain efficiencies are now delivered through marginal or incremental gains. It’s hard yards.
A customer-centric approach unlocks new joint end-to-end opportunities. Doing so means you’re playing on a “bigger pitch”, with more players and an opportunity to have a bigger impact. Businesses are recognising this – there’s been a 600% increase in Chief-Customer Officer job roles in the U.K since 20141.
The opportunity to collaborate is huge. In IGD’s 2018 Customer-Centricity benchmarking survey, only 6% of respondents identified that they had long-term joint investments in place based on trusted partnerships with key trading partners, a potentially massive gap to fill. To unlock new, scalable opportunities and build truly customer-centric organisations, partners need to become more comfortable with the idea of sharing and co-creating supply chain strategies. Clearly, there’s a journey to go on, and it starts with getting the basics right. Find the right fit by identifying partners that match your ambition and investment.
How is the industry responding?
Some organisations have already tasted success with this approach. Molson Coors is a prime example. It overhauled its entire strategy and modus operandi. It completely turned around its operation, from saying “no” to “how do we say yes?”. It did this by implementing its “First Choice for Consumers and Customers” strategy – delivering 74 consecutive weeks of 99% service into its customers.
This strategy extended well beyond Molson Coors’ supply chain, requiring a deeper level of collaboration with key partners across all functions to uncover new opportunities and grow the business by developing a customer-centred mindset and approach. This is key to growing and sustaining impact.
Source: IGD SupplyChainAnalysis
We’ve recently explored the idea of customer-centricity with a group of global blue-chip manufacturers and retailers. Some of what they’ve shared has been grouped into six discrete areas. What’s become clear is that customer-centricity is being widely explored. Of course, some have made more progress than others, but customer-centricity is definitely more than just a buzz phrase.
Source: IGD advisory group inputs
Where to start?
To summarise, developing a customer-centric approach doesn’t have to be a huge undertaking, not least because you’ll need to ensure you have the foundations – service, resource etc. – in place to support first. This will take time and focus.
Start with a single champion responsible for embedding a culture or a single customer team wanting to test a new way of working. Explore what customer-centricity means with trading partners; understand what matters, their business objectives, the likelihood of engagement. Once you’ve done your homework, you can start to place your bets!
IGD is currently undertaking a global survey to understand the maturity of the industry in its journey to customer-centricity. We need you to contribute to our research and in doing so, you’ll be able to benchmark how your business compares with the rest of the industry.
Complete our short survey and you’ll receive a free summary of the results.
1 Marketing Week- Aug 2018
Supply Chain Insight Manager
15 October, London
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