Customer Obsession Can Ease Market Drama Anxieties
Businesses face a range of systemic risks in today's market. They include the collapse of major banks, the rise of interest rates, and disruption from generative AI.
Despite these headwinds, some organizations thrive while others struggle to keep up. So, what sets the leaders apart despite facing the same risks?
According to Forrester Research, these are customer-obsessed firms that put customers at the center of their leadership, strategy, and operations and, in turn, drive tangible business results. At a recent webinar, the research firm noted that customer-obsessed companies outperform non-customer-obsessed companies by a 2.5x revenue growth rate, 2.2x profitability growth rate, and 2.2x employee engagement growth rate.
3 characteristics of customer-obsessed firms
“By focusing on the needs and wants of their customers, these organizations are creating a competitive advantage that drives sustainable growth," said Fred Giron, vice president and senior research director at Forrester Research.
So, how can organizations practically become more customer-obsessed? The answer lies in the use of technology strategically to enhance customer value and experience. This means investing in tools that enable personalized interactions, such as chatbots or AI-powered recommendation engines.
Another critical aspect of creating value for customers is developing a deep personalized understanding of the customers' needs and wants. This requires a data-driven approach that leverages customer insights to inform business decisions. By analyzing customer behavior and preferences, organizations can tailor their products and services to better meet the needs of their audience.
Giron added there are three characteristics among customer-obsessed firms. On top of focusing on growing customer value, these firms also have strong internal alignment between customer experience (CX) and employee (EX). They are shifting their technology investment priorities from achieving efficiency to effectiveness.
“The rising IT and business maturity mean businesses are shifting from doing [the same] things in the right way into doing the right things,” he said. “They are laser-focused on creating customer value and prioritizing technology investment strategy accordingly.”
Innovation with effectiveness
While improving CX, growing revenue, and reducing cost are top business objectives, Giron said more customer-obsessed firms also prioritize their ability to innovate.
This priority also aligns with the findings from Forrester’s Priorities Survey 2023. This online study surveyed 1,875 business leaders from Australia, China, India, Indonesia, Japan, and Malaysia. It explores the priorities of business objectives, IT objectives, and IT actions among Asia Pacific business leaders.
The survey indicates 27% of Asia Pacific business leaders prioritize improving their ability to innovate, only slightly lower than improving CX (29%) and reducing cost (29%).
“It is not surprising to see improving the ability to innovate is ranked so high,” said Leslie Joseph, principal analyst at Forrester. “There is no government in Asia that is not funding and supporting technology and innovation."
He quoted GoJek as an example in Indonesia, where the customer-obsessed digital native company has become the engine of innovation and economic growth in the market. In Singapore, the government also focuses on attracting talent, with two-thirds of the tech talents from outside the country.
Joseph added Asia enterprises’ innovation focus has also recently moved from developing products or services to improving operation resilience. "Ten years ago, business innovation was centered at the front end,” he said. “The next area of innovation is in the operation, the back end.”
The pandemic has also encouraged more Asia enterprises to shift their innovation focus toward operations, according to Sam Higgins, principal analyst at Forrester Research. He said the experience of dealing with systemic risk—which often brings a longer lasting impact than single sporadic incidents—has taught enterprises to focus on business resilience.
With the focus of innovation shifting from simply efficiently enabling CX to effectively empowering operation resilience, Giron added automation will be the key technology enabler. “20% of business leaders expect to use automated processes to grow revenue,” he said.
CX-EX alignment
Another critical aspect of becoming more customer-obsessed is the alignment between EX and CX.
Higgins noted the recognition to tackle systemic risks has brought more customer-obsessed firms to review their operating models, extending their IT capabilities from CX into EX. Organizations are bringing analytics capabilities for customers into the employee journey and employee analytics.
“More businesses are taking an analytical approach in EX, but also shifting from simply an internal CX into a more human approach for EX,” he added.
Organizations must adapt to stay ahead of the curve with the business landscape constantly evolving. Giron said companies can create a competitive advantage that drives sustainable growth by becoming more customer-obsessed. This requires businesses to continuously grow customer value, align CX with EX and drive innovation effectively.
“The shift between efficiency and effectiveness is clear," said Giron. "Efficiency is not going to go away, but mindset change is important to drive tangible customer value and business value with tech empowerment,” he concluded.
Sheila Lam is the contributing editor of CDOTrends. Covering IT for 20 years as a journalist, she has witnessed the emergence, hype, and maturity of different technologies but is always excited about what's next. You can reach her at [email protected].
Image credit: iStockphoto/photographer
