• April 1, 2008
  • By Lior Arussy, founder and president, Strativity Group

Where Has All the Commitment Gone?

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"We must focus on the customers."
"Customer experience is critical to our success."
"Without true customer centricity, we will lose our competitive advantage."
"Everything we do must be to add value to customers."
"At the heart of our business is the customer."
"A customer strategy is the key to our growth."
"Customers no longer ask for products, they demand complete customer experiences."

You've probably heard statements like these so many times that you've stopped counting. Then comes the harsh reality: "We must do it without any additional investment. In fact, we need to focus on customers while reducing costs!" The lofty statements shrink to small, incremental, and often meaningless actions.

What happened to all the promises? Where did the commitment to customers disappear to? Where are all the senior executives when we need them?

We've seen organizations on the verge of hysteria, desperate to fix problems with their customers -- but then these organizations disappear for months before re-engaging. The sudden lack of urgency is always puzzling: It's a struggle to reconcile the frantic declarations of need with the minuscule commitment to action.

Eventually, we recognized the trend and managed to get to the root cause of this behavior -- two challenges that ultimately dictate the delays in customer-strategy implementations, as well as the reduced investment that seems to follow: doubt in the customer case, and doubt in the financial justification.

Despite their declarations, organizations default to past successes -- which have typically been product-centric. They want to believe that what worked before will continue to work. "We made our numbers last quarter," they argue, forgetting that "making the numbers" often requires heavy discounts that reduce customer value and erode customer loyalty. Deep down, these organizations aren't really convinced about the need to shift to a customer-centric model. To them, a complaint can always be resolved with some freebie that will keep the customer quiet, if not happy.

On the other side of the spectrum are companies that perceive a customer-centric strategy as an unjustifiably high cost. They see the price of the required changes, but they don't believe in the upside. Like great bureaucrats, they know the costs of everything but fail to recognize the value of anything. These organizations turn a blind eye to the financial costs of doing nothing and the impact of that inaction on the top and bottom lines.

In a study that we conducted among CFOs, we found out that not a single one of them applied return-on-investment savings to their budgets. Each time an ROI analysis was provided to them as part of a project justification they ignored the savings, failing to apply those dollars to the budget. As such, those projects remained "expenses" -- without any financial value. In fact, most companies don't even follow up on a project to ensure that they've obtained the promised ROI.

And yet numbers are the language of the day. Most CFOs will tolerate a certain percentage of customer complaints. ("You can't satisfy them all," the CFO will argue.) In his models, he already factors in for some customer defection. For those who've seen major promises shrink to incremental actions -- frustrated customer strategists, for example, who can't get organizations to move from collecting customer surveys to acting on them -- it's time to create a sense of urgency by committing to the financials. It is our failure to place the customer-strategy discussion in the context of top- and bottom-line numbers that leads to delayed and fading commitments to those strategies. Only when we are willing to commit to the numbers will the rest of the organization commit to the customer.

Lior Arussy (lior@strativity.com) is the founder and president of Strativity Group (www.strativity.com). He is the author of several books, including Excellence Every Day (Information Today, Inc., 2008), his most recent, an excerpt of which appeared in CRM’s May 2008 issue. To learn more about customer strategies, sign up for his newsletter at Strativity Group's homepage.

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