In my over 25 years in the industry, I have learned that there are two engines that are crucial to the success of any technology company: Product Innovation and Customer-Centricity. Much has been written about the hallmarks of an innovation culture.
In my over 25 years in the industry, I have learned that there are two engines that are crucial to the success of any technology company: Product Innovation and Customer-Centricity. Much has been written about the hallmarks of an innovation culture. But customer intimacy is just as important, as I’ve observed in my career at companies like VMware, SAP, Apple and Microsoft. For example, VMware has been honored to be ranked #1 in Net Promoter Score (NPS) of all Tech Companies, by Temkin Research – a tremendous tribute to our outstanding customers, but a result of a lot of hard work by our amazing employees – we are grateful for every one of them!
I often get asked by product managers and sales reps, in various stages of their careers – ” How do you create a customer-centric culture?” So, I thought to document a few lessons I’ve learned over the years. These are especially applicable to enterprise tech firms. As you read this list, many of these principles are going to feel like common sense, taken right out two of my favorite books – ” 7 Habits of Highly Effective People” (by Steven Covey), or ” How To Win Friends and Influence People ” (by Dale Carnegie). They should absolutely be that simple, yet it is amazing how few companies practice them!
Here are some simple recipes to drive excellence in customer-centricity:
1. Before Your Customers, Take Care of Your Employees First
One of the first principles I was taught at Harvard Business School, by one of my favorite professors, Len Schlesinger, was the ” Service Profit Chain.” Len’s research showed that the true source to shareholder value, is not just satisfied customers, but it is highly motivated employees. Employee satisfaction drives customer satisfaction, which in turn, drives shareholder value. So, if you want to maximize customer and shareholder value, focus on delighted employees. Hug your star employees. Constantly look to recruit and retain the best and brightest. More about the Service Profit Chain can be read here.
2. Two Ears, One Mouth
Bill McDermott, now CEO of SAP, and one of my previous bosses, would often tell us before a customer meeting, “Listen guys, as we go into this meeting, I want rabbit ears, not alligator mouths!” – meaning, just shut-up and listen to the customer! I’ve seen way too many customer meetings, where the sales reps or the product manager is blabbering nonsense, when they should be listening to the customer’s perspective. I try to spend as much of the early part of any customer meeting, asking as many “mutually exclusive, collectively exhaustive” questions, as I can come up with. This is just like a doctor asking all the vital questions about your health indicators, before she prescribes a remedy.
3. Practice Ruthless Customer Responsiveness
One of the qualities I have admired about Jeff Bezos at Amazon – and his key leaders like Jeff Wilke and Andy Jassy – are their ruthless focus on the customer. There are legendary stories told of Jeff Bezos interrupting an executive staff meeting because of a customer escalation. I’ve driven all my teams to do the same – respond to a customer inquiry or escalation, immediately! Or certainly in less than 24 hours, if you are traveling. There are many CIOs who have my cell-phone number and they are free to text me directly when they have an issue. I certainly can’t provide the type of intimacy to a million small and medium sized customers in the world, but there’s no reason why the CIOs of Fortune 500 or Global 2000 customers, who represent some of our largest customers in lifetime revenue, can’t have me on speed dial. Many engineers and sales teams run away from customer escalations because they are terrified of the customers’ wrath. It is my experience that when you help a customer in need, you have an opportunity to turn their rants into raves. Take care of them, and you’ll have a customer for life. The best relationships I have with customers, are often ones born in a crisis, but then developed into incredible partnerships.
4. Tie Net-Promoter Scores (NPS) to Compensation
Every customer-centric organization I know, uses some metric to measure customer satisfaction of their products of services. The one most commonly used, is Net Promotor Score (NPS). I am not suggesting this is the only metric to be used. “Doctored” NPS scores are meaningless. Nonetheless, whatever metric you use, tie that metric to the compensation of your key teams in the company. For a tech company, the largest functional teams are R&D (engineers, product managers) and Go-to-Market (sales, marketing, consulting, support). Most Go-to-Market customer-facing teams have NPS scores in their compensation schemes. Yet, many sales teams feel that engineering teams don’t care enough about their escalating customers. So, when I’ve run engineering teams, I’ve often tied their bonuses, to their NPS scores or the number of red product escalations. There is no faster way to have an engineer care about the product they have built, than tying their compensation to the NPS of their customers.
5. Co-Innovate with Customers using Design Thinking
It is a beautiful thing when you can get customers to help build your product for you. We’ve used Design-Thinking principles very heavily at SAP and VMware, to engage customers and make them part of a product’s roadmap or user-experience. We’ve partnered with the Stanford Design School in this endeavor. Customer advisory boards can also be a key tool in making that happen. An innovative Product Manager gets to act like a “general-manager” or “mini-CEO” of the product, with customers driving the design and roadmap. I remember many stories from my early days at Microsoft, where the product managers of Microsoft Word or Excel designed some incredibly powerful features, just by staying really close to what they were hearing from customers, e.g. Print Preview, “unlimited” Undo and much more. Today’s savviest product managers, use crowd-sourcing and modern customer experience techniques, to filter signal from noise, to hear the voice of the customer.
6. Don’t Just Listen to, Lead Your Customers
While the previous principle of Listening to the Customer is important, if you purely listened to what customers want, but you could end up being dead wrong about what the market really needs. For example, in 2007, if Steve Jobs merely listened to customers, he would have designed the iPhone with a better keyboard experience than the Blackberry! Fortunately, Jobs had the foresight to think about leapfrog capabilities in the product. Customers would not have told him about “zoom” and “pinch”, and all those amazing features that we now love in our smartphone. Jobs was one of the best at ” listening and leading.” He listened to the pain-point of what the customer really needed, not simply a literal feature list of what customers wanted!
7. Make it Sesame Street Simple
PowerPoint is the bane of storytelling. My simple advice: shed the PowerPoint, throw it out the window! Practice storytelling of your product or service, with words, metaphors, a narrative, a white-board, and maybe even a real-life product demo. I often say, make it ” Sesame-Street Simple ” – and answer the most important question a customer wants to hear, “Why BUY, why NOW, and why YOU,” where YOU is the name of the company or the product or the service. Did you ever tell your kids a bedtime story by whipping up a PowerPoint?! Every story starts with “once upon a time,” and ends with “they lived happily ever after”, while in the middle of the story is love, war, protagonists, antagonists and much more. How amazing would it be, if every product pitch we heard, was a story, not a set of bullet points. I have been blessed to work for some tech leaders who are incredible story-tellers – two of the best I have seen, are John Thompson (my boss at Symantec, and now Chairman of Microsoft), and Bill McDermott (my previous boss, and now CEO of SAP).
8. In God We Trust, Everyone Else Brings Data
Customer-centric organizations obsess in making decisions based on data. They are constantly segmenting their customer base and customer satisfaction scores, using analytics and artificial-intelligence tools, to inform their strategy of which customers to best serve. They are constantly benchmarking themselves against peer or competitive companies. My current boss, Pat Gelsinger, CEO of VMware, tells numerous stories of how Andy Grove made data-centricity, the DNA of Intel. This created an incredible generation of ex-Intel leaders, of whom Pat is a pioneering example of. The leaders I admire, have an uncanny ability to use just enough data, but ultimately trust their gut for the final decision. And if they make a mistake, they use data again, to guide their next better outcome.
9. Become a Trusted Adviser
No customer wants to be sold a product. They want to build a long-term relationship with you. Two of the most common questions I get from customers are: “what are other customers in my industry doing with your products that I can learn from?” or “what are the best practices of other customers you talk to, that I can learn from?” The more you become a trusted adviser to the customer – like a physician – the more they trust you with their wallet. The only way you can do this well is by immerse yourself in hundreds and thousands of customer conversations, where you learn what customers are doing in their digital transformation, and pattern match to customers in the same vertical. The smart product managers and sales account executives think like strategy consultants, prescribing solutions, rather peddling products. They earn enormous customer-intimacy that lasts a lifetime!
10. How Big Is Your Rolodex?
As I have gotten older, I’ve learned – it’s not WHAT you know, but WHO you know. People with the greatest relationship rolodex, bring incredible value to a firm. At a company I worked at in the past, we’d sometimes have a friendly competition between peers, to see who knew the most number of CxO’s mobile phones and birthdays. In technology companies, someone who has access to the top Global 2000 CxOs – certainly CIOs, but increasingly CFOs, CMOs and eventually CEOs – is worth their weight in gold! Leverage social media too. Measure your contacts on LinkedIn, not by how many contacts you have, but how many customers you know, who have real purchasing power.
In conclusion, I hope this list of suggested ideas, resonated with you. If you have other strategies that have worked for you, I’d love to hear them.
—- Sanjay Poonen, @spoonen
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