On paper, the benefits of customer-centric transformation are a no-brainer. An approach that focuses on identifying and satisfying your highest-value customers, brings both short-term and long-term financial benefits, and builds a base of highly loyal and motivated shoppers — why would any business say no?
In reality, customer-centric transformation isn’t so easy. There’s a reason “change management” exists — large-scale transformations are doomed to fail without a dedicated approach to their implementation. Humans are naturally resistant to change, and the most conservative adjustment is incredibly difficult without the support of your business.
While there are many organizational factors that can work against customer-centric transformation, here are a few of the most common ones, coupled with solutions that can help changemakers to overcome the status quo:
1. Risking existing revenue streams
Humans are not always rational in their decision-making, particularly when money is brought into the equation. According to loss aversion theory, humans are more likely to avoid losses than they are to pursue equivalent gains. This is a recipe for roadblocks when it comes to customer-centricity, especially in profitable areas of the business. Why fix what isn’t broken?
The reality is that businesses hesitant to shift to customer-centricity will lose money in the long run. To overcome this fear, those overseeing the customer-centric transformation should begin by demonstrating proof of concept in smaller, less successful areas of the business. In time, this progress will shift the risk aversion in the opposite direction: what does the change-resistant team stand to lose if they continue to post static numbers while other units show consistent growth?
The reality is that businesses hesitant to shift to customer-centricity will lose money in the long run.
2. Revealing uncomfortable truths
Customer-centric transformation will always require relationship-building and delicate conversations. More often than not, there will be hard situations to navigate, especially at the beginning. For example, imagine you work for a women’s jewelry brand. Over the course of several quarters, your brand’s marketing organization invested a tremendous amount of time and money to develop a series of customer personas. The brand worked with a team of outside consultants and conducted several focus groups. As a result, a series of campaigns meant to target those carefully-constructed customer segments were created.
You’re then tasked with examining the brand’s customer data, and your initial efforts show that the customer personas are off-course and the brand’s most valuable customers look and act nothing like the established segments. How excited will you be to tell the marketing team that their major investments of time and money were a waste? The good news is, these situations will happen much less as your company works toward customer-centricity.
In this particular case, you could develop a single data-backed customer persona to add to the marketing team’s repertoire; over time, you can introduce additional personas that demonstrate their accuracy compared to the previous set. Once the data-driven personas show their worth and bring in more money for the company, it will be easier to convince marketing and sales teams to make the switch.
3. Rattling the corporate hierarchy
While plenty has been written about changes to the C-suite, many of today’s organizations still stick to a rigid hierarchy. In these companies, a relatively junior data scientist may have a difficult time being heard by those with the authority to make decisions. Why should a CEO with more than two decades of industry experience listen to the radical ideas of a mid-level employee?
When building consensus for customer-centricity, it’s not wise to swim against the current. The easiest path forward is to identify overlaps between the organization’s priorities and what the data actually says. If you can identify a data-backed insight that aligns with a key initiative driven by the CEO or CFO, that is your golden opportunity to prove the value of customer data on a larger level. Make your bosses look good, and you’re far more likely to have their support in the future — even if the next recommendation goes against the grain.
The status quo will always serve as one of the most stubborn barriers to success for customer-centric transformation. To learn more about how to overcome these challenges, check out this recent blog post on identifying opportunities for early victories, and be on the lookout for future content from the CDPa, including a new Playbook on how to identify and understand your most valuable customers.