Employee-Centric Breeds Customer-Centric

What impact do happy employees have on happy customers?  With tens of thousands of front-line employees, Starbucks is a great case study. They've built a winning employee-centric culture with their stock plans and health plans for part-time workers. Is there a better place to work 20 hours a week? 


Starbucks' focus on employees comes directly from the top. Howard Schultz drives transparency in the organization that creates one of the most notable brands in the world with superior customer loyalty.


I recently picked up Howard Schultz's book, Onward, a surprisingly detailed autobiographical account of his return to the CEO seat at Starbucks.  He is a strong leader that I admire because of his principles and passion.  It is an amazing feat of leadership to take a retailer into the "Great Recession" and come out stronger for having gone through it.  


Starbucks is relentless in its customer focus.  Providing an outstanding customer experiences places this business, and its profits, among the highest in its industry.  Schutlz's story is enlightening because it offers insights in particular to one source of a customer-centric business: employee focus.

"The only reason our partners can make our customers feel good is because of how our partners feel about the company. Proud. Inspired appreciated cared for. Respected. Connected." 

- Howard Schultz, Onward

For Starbucks, as with most organizations, this spirit of employees comes straight from the top. As exhibited even by the book itself, Schultz goes to great lengths to create transparency widely and broadly in the company.  Transparency used correctly will engage employees.  It will engage customers as well.


Successful transparency is not just in sharing the reasoning behind re-orgs or in sharing performance feedback or  financial results.  Customer and employee engagement for a company comes from transparency in leadership.  What do the leaders believe to be true?  Where do their personal convictions lay?  


For Schultz, he communicates effectively based on his beliefs about what the Starbucks experience should be and who he is personally.  It is this guiding light that serves to set priorities in the company.  Employees undoubtedly harness this, and with free-will they build the kind of  service experience that continually delights customers.

From Satisfied Customer to Raving Fan

Enthusiasm is contagious.  Just ask the teammates of a someone like the Colts' Peyton Manning.  Or look at how the Net Promoter Score is calculated.  Indifference won't move the needle.  Perhaps satisfaction will, but the energy of delight can do wonders.  The best term that I've come across for enthusiastic customers is the "raving fan."

With customer-centric strategies, hundreds of companies are creating value through innovation that creates raving fans.  This goes beyond customer service however.  And these are not necessarily technological breakthroughs. This is business model innovation that provides real value to customers.  Customer centric strategies are commercial successes that enhance the user experience and delight customers while augmenting the supplier's bottom line.

An example:
The Situation:
A customer experience that results in indifference is a lost opportunity in my mind.  I am a customer of AAA auto and they recently asked me to provide them with feedback.  The first question I got was the NPS of course (Full disclosure: I gave them a 6).  My only interaction with the company during the last two years was renewing my annual membership.  The experience of receiving an email notification for my loyalty was chock full of indifference. Isn't my loyalty worth more than a receipt?

The Innovation:
Why not turn this humdrum interaction into an exciter? Innovate on the renewal transaction with a congratulatory package that delights the customer.  To my mind, this might come in a couple of flavors: A letter highlighting how many times the customer used AAA and avoided being stranded on the roadside.  A travel guide on the customer's local area to help them discover new attractions such as hiking trails or historic sites.  The cost of either of these could be offset by including targeted marketing programs for add-on services or advertisements.

Would I jump up-and-down because of this? Not likely. But it would change my NPS response.  When was the last time a web-based renewal gave you a memorable experience?

(Note: See McGrath & MacMillan for more on exciter product features).

Customer Nutrition

What are your customers hungry for?  Do they come to you for food, or are they looking for nutrition?

This WSJ article highlights the effort of some Food Retailers to implement health-scoring systems in their stores.   Shoppers have been seeking satisfied stomachs from their grocery stores for years. Now, they're  seeking health as well.

Food products are the means not the end.  This is customer-centricity at its core and retailers like Kroger, Hy-Vee and Meyer are on the right track.

It is a brilliant extension of value to consumers along a new dimension.  Why sit passively as a storefront when you can create an interchange with a customer?  These grocers are getting out of the commoditization death spiral. They're no longer simply shelf space for the Kellogg's and Nestle's of the world.  The grocers are taking control of the customer experience with this new dimension.  They're also likely to build loyalty.


What are the key factors influencing a grocery shopper's choice of supermarket?

• Convenience - Good Location, Speedy Shopping
• Selection
• Quality
• Prices
• Aspirational qualities - Brand, Look & Feel of store

Now let's add a social and informational component to the value equation: Learning nutritional information.

What this does is accelerate the consumer trend towards health foods and away from empty calories.  With an eye towards leading customers with a valuable information exchange, these grocers are positioning themselves to build lasting bonds with their consumers as an enabler on leading trends.  By shopping at these stores, the consumer becomes more knowledgeable in an area of increasing relevance and importance.  This is a value exchange that goes beyond price stickers the cash register.

Intuit's Taxcaster

A parallel example of adding a value dimension comes from Intuit's TurboTax. Kings of designing the user experience around customers, Intuit included a "Scoreboard" in its software about two years ago.  With  "taxcaster", one can see how data entered in the software results in higher deductions or smaller tax bills.

The concept provides an interaction, a dialog, a level of engagement, that enhances the user experience.  This essentially expands the benefits of the tax prep software. In this case, if getting your taxes filed is food, then excitement is nutrition.