Customer-Centric Organizations Keynote

Liveblogging the first Frost & Sullivan keynote by Pamela T. Miller, Esq. She is Vice President, Market Strategy and Development, Medco Health Solutions, Inc. Her presentation is entitled “Creating a Consistent Customer Experience and Driving Customer-centric Thinking throughout the Organization.”

Pamela defines customer-centrism as “Focusing a company’s strategies and operations around customers rather than products, services, markets or internal structure.” She says customer-centric strategies can increase customer satisfaction, loyalty, retention and ultimately, the bottom line. (This is in keeping with Dr. William Mayo’s dictum that “The best interest of the patient is the only interest to be considered.”)

In a study of 2,500 telecom customers, a 10 point increase in satisfaction increase retention by 2 percent. In a study of 200 Fortune 500 firms, one percent increase in customer satisfaction was associated with a similar increase in market value. This seems pretty intuitive and common sense, but it’s nice to have hard data to confirm.

Pamela says a differentiated customer experience is an essential strategy for attracting and retaining customers, and people are willing to pay more for it. She told the story of Starbucks and how someone did a blind taste test with Dunkin Donuts and other coffees, and people couldn’t tell the difference. But the Starbucks atmosphere with quick service, comfortable seating, music, wireless internet and other customer experience differentiators has led to slaes growth and EPS growth that is double the industry average.

Key factors to her holistic approach to creating customer-centric organizations are (and I’m going to relate these to Mayo Clinic as a patient-centric organization):

Leadership – Commitment at the top. See the quote from Dr. William Mayo above. That quote has been boiled down over the years to: “The needs of the patient come first.” Pamela says leaders need to share financials and map them back to customer-centered goals.

Infrastructure – Need customer research and development, to make marketing and branding strategies customer focused. Mayo Clinic’s mission is to give the best care to every patient, every day. Hiring and training are hugely important; that’s why she recommends behavioral interviews in the hiring process (which is something Mayo does.) Other elements include reward and recognition (not necessarily financial), measurement and continuous improvement of key business processes, and analysis of competition and the market. “Once a customer is lost, it’s hard to get him or her back.” Starbucks believes in paying front-line employees well because they are the first line of exper

Process – Design processes to provide consistent branded customer experienceacross the organization.

Culture – This is, she says, the hardest part. People either have the basic behavior of liking to serve others, or they don’t. You have to hire the right kind of people, or as Jim Collins says in Good to Great, get the right people on the bus. Again, this is a Mayo Clinic focus through our behavioral interview process. We also work to “imbue” our vendors and consultants with our culture so they understand how seriously we take patient centricity.
Other companies Pamela used as examples include Commerce Bancorp, Nordstrom, Lexus, and Berkshire Hathaway.

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Author: Lee Aase

Husband of one, father of six, grandfather of 15. Chancellor Emeritus, SMUG. Emeritus staff of Mayo Clinic. Founder of HELPcare and Administrator for HELPcare Clinic.

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