Strategy & RiskThe Three-Wheel Framework of Customer-Centricity
Published: December 16, 2018
Read Time: 5 minutes
We are now living in a world where customers have more choices than ever before and organisations face the challenge of distinguishing themselves from the dozens of nearly identical providers, products and services. Adopting a customer-centric approach is one approach to tackling this test for organisations.
What is customer-centricity? Customer-centricity refers to the strategy of putting customers front and centre in the organisation’s strategy and activities. Customer-centric organisations are designed from the outside in: defining who the customer is, what they care about, and how they interact with the organisation. It is the customer’s experience that then aligns the organisation internally.
In this article, I invite you to explore the Three-Wheel Framework of Customer-Centricity and introduce some practical tools that you can use immediately to start your organisation’s journey towards greater customer-centricity. The framework consists of three inter-connected wheels that each represents one important phase in customer-centricity. All three wheels need to move together in a synchronous manner in order to create a customer-centric focus in the organisation.
Know Your Customer
The first wheel is ‘Know Your Customer.’ One effective way to ensure that you deliver exceptional products and services is to know exactly what your customers want. Three components are included within this wheel: Customer Segmentation, Persona, and the Customer Experience Map.
Customer Segmentation refers to the process of categorising customers into groups based on common characteristics so that the organisation can service them more effectively. Organisations with the capability to obtain structured data about their customers may wish to use a more sophisticated analytical approach to define their customer segmentation, however, a simple exercise of identifying and grouping similar customers together may also serve this purpose.
Persona is an approach to structuring our understanding of the customer in a simple, digestible format. I usually create one persona for each customer segment, and break each persona into three parts: demographic, psychographic, and ethnographic. The demographic information is usually easily quantifiable such as age, gender, income, and geographic location. The psychographic information refers to the behavioural characteristics of customers (i.e. the likes, wants, behaviours and fears), and the ethnographic information is the social stimuli that influences the behaviours and patterns of a customer.
Customer Experience Map is a tool that captures and communicates a customer journey through a specific product or service experience. It is typically generated for each persona created for your target customers. Through journey maps, we will gain clarity on what our customers do, how they think, and what they feel when they interact with our products or services. Customer journey maps describe a customer’s general experience with a particular process (i.e. giving a donation), capture the customer’s experience with the product and/or service, and drive key actions coming from the insights and feedback gained.
Build Key Insights
Many organisations today conduct extensive customer research and collect large swathes of data. However, they often struggle to turn this data into meaningful learning points and outcomes. This is why ‘Build Key Insights’ is the second wheel in the Three-Wheel Framework of Customer-Centricity.
Three tools which are included here: Value Proposition Canvas, Learning Card, and Dependency Analysis.
Value Proposition Canvas consists of two components – Customer Profile and Value Map. Customer Profile describes a specific customer persona from the lens of Customer Jobs (what customers are trying to get done), Gains (outcomes customers want to achieve), and Pains (bad outcomes, risks, and obstacles related to customer jobs). Value Map describes the features of a specific product or service in the organisation from the lens of Gain Creators (how the specific product or service creates customer gains) and Pain Relievers (how the specific product or service alleviates customer pains).
Learning Card is used to capture insights coming from the ‘Know Your Customer’ phase. It usually comprises of a hypothesis (We believed that…), an observation (We observed that…), a key learning point (We learned that…), and an action plan (Therefore, we will…).
Dependency Analysis is a technique used to analyse the dependencies between activities. In this case we are exploring if there are connections and dependencies between the learning points and elements of the current business model (i.e. supplier, delivery channel, technology, costs, etc.).
Take Key Actions
The third wheel is ‘Take Key Actions.’ After careful analysis of the key learnings, it is now time to implement some actions. There are two tools that we can use: Action Test Card and Progress Board.
It is good practice to test key actions on a small scale before implementing the changes. The Action Test Card is a tool that may be used to capture individual testing activity, aid the measurement of success, and note the result of the testing. Key points coming from the Action Test Card are then updated onto the Progress Board to enable effective tracking.
The Progress Board is an information management tool that visually tracks and analyses metrics for overall performance and progress of actions, or highlight particular problems that require further attention. Good project management is crucial in order to ensure that actions are tracked and completed appropriately. Performing an additional dependency analysis at this stage will also provide good support to ensure key actions are working effectively.
I hope this framework serves as a useful guide, no matter where you are in your journey toward a customer-centric organisation. My advice is to start small and make a difference for one customer today. Then, repeat!
This article was originally published in the Better Boards Conference Magazine 2017.
Wenda is one of the co-founding members of Hoshizora Foundation, a leading education not-for-profit in Indonesia, and now serving as the Board Chair, focusing her efforts in strengthening the strategy, governance, and operations of the Foundation. She is also serving as an Advisor for several NFP organisations and social impact projects in Australia, Asia and Europe. Wenda has extensive experience working and collaborating in the social impact space, analysing and delivering solutions related to strategy and risks, program activation, implementation, monitoring and evaluation. Her roles centre on discovery and realisation – identifying areas of opportunity and translating insights into new curations for the organisations that she works with. Wenda is currently living in Australia and working for one of the global consulting firms. She is affiliated with the Australian Institute of Company Directors and fluent in English, Japanese and Indonesian.
Found this article useful or informative?
Join 5,000+ not-for-profit & for-purpose directors receiving the latest insights on governance and leadership.
Receive a free e-book on improving your board decisions when you subscribe.