Building organizational culture to shift toward customer-centric service

Customer Service

We shall, for the purposes of this paper, accept the proposition that we are moving from a culture that can be categorized as "you get what I give" to one where the customer is always right. In the real world, there are companies that do either, depending on their business model. But for the sake of argument we will assume the position of a company that is seeking to shift from the former to a more customer-centric vision of customer service. There are two elements to such a shift -- operational and cultural. Operations can be laid out in such a way that barriers to customer service that may have existed in the past are now removed, for example. Yet, because service is inherently customer-oriented, based on interactions, it is critical that the organization shifts to a customer-service-based culture. This is a massive cultural shift from an organizational culture where customer service is essentially an afterthought. Management can plow all the resources in the worlds new call centers and allowing all manner of returns and whatever else it wants -- and the infrastructure is important -- but if the organization's culture does not put the customer first all that spending will be in vain. The organizational culture has to be the primary place where this type of organizational change has to take place. This paper will examine some of the things that a company needs to be done to shift towards a service culture that emphasizes the primacy of the culture, drawing upon academic research in the subject.

Service Culture

When you start an organization from scratch, you can build that organization in whatever vision you choose. The corporate culture is built from the ground up, and every new person to join the company can be indoctrinated into the customer service philosophy the same way, so that this philosophy becomes the organizational culture with respect to customer service. It is much more difficult to change the culture of the company once it has been allowed to build a culture that does not emphasize the customer. The very first step in this process is to understand what a customer-focused culture is. Brady and Cronin (2001) sought to draw conclusions about the link between customer orientation within the company and customer service outcomes and noted that the customer orientation needs to be strong in order for a company to achieve high levels of customer satisfaction -- the two are intrinsically linked. While there are contextual variables, customer orientation has been shown to affect customer loyalty, which is a precursor to stable revenue streams (Homburg, Muller & Klarmann, 2011).

Customer orientation is understood variously as a "psychological phenomenon antecedent to critical job states" or "as frontline employee behaviors that are caused by these same job states" (Zablah, Franke, Brown & Bartholomew, 2012) -- clearly the second is the outcome of customer orientation. In English, this means that customer orientation is the dedication that the frontline employee has to achieving customer satisfaction. In this theoretical company, the employees have traditionally not had much motivation to strive for customer satisfaction. They may have either been oblivious to the needs of the customer or they didn't care. Customer orientation was minimal -- the employees may have been oriented differently. A good example of this is a car dealership where the sales people are paid per car sold. They are only concerned with satisfying the customer to the extent that they win the sale. They have almost no customer orientation.

A service culture, or high level of customer orientation, represents a 180 degree turnaround in terms of customer orientation. Wherever the customer previously placed on the organizations' hierarchy of importance, the customer now needs to be number one, and that starts with the organizational culture. The culture has to be defined at all levels of the organization as the central focus for frontline staff, to the point where they will do what needs to be done in order to meet the customer needs.

Practical Applications

When a firm has changed its culture, it needs to also change its systems to reflect its new view on customer service. While the culture side of customer service has not really changed much since the first shops were opened in ancient Mesopotamia, the systems aspect of customer service has changed significantly. The first thing customers value is communication. There was a trend of offshoring customer service, which led to a decline in service standards, but the Internet and its wide variety of communications applications has led to a renewal of communication. Companies are using chat, automated help on websites and other modern technology to provide better service to their clients, without the need for building out more foreign call centers. This new technology also lowers the cost. In addition, companies appear to be more responsive when they offer a variety of ways for the customer to communicate with the company. This enhanced perception occurs regardless of the outcome of the communication. All interactions with customers create value (Salomonsson, Aberg & Allwood, 2012), so it is important that there are many ways for such interactions to occur. That the use of technology to provide the customer with the level of communication that he/she needs also saves the company money is a nice bonus.

Another trend in enhanced customer service is customer relationship management and big data. With these, companies are able to better track the interests and buying patterns of the customers. While this has obvious benefits for the company, it also benefits the customer. The customer forms a relationship with the company or brand whether that relationship is mutual or not. Gathering data about the customer's habits allows the company to reciprocate in a way, by showing that it understands the customer's needs. As an example, a company wants to offer a deal on a vacation to a customer browsing its website. If it knows that this customer goes to Costa Rica every year, it can offer a trip to Costa Rica -- this will be more effective than offering a hunting expedition to British Columbia. Knowing the buying patterns of customer is not just good business, it is good service because the customer appreciates when companies are able to anticipate needs to meet those needs. Whereas in the past this could only be done via interpersonal interactions, today this can be done with technology and data.

Complementary to this is social media and targeted communications. One of the things that social media does for companies is that it creates an opportunity for two -- way communication that did not exist previously. Matthews (2012) notes that brand value can be enhanced through the use of social media in both public relations and in customer service. The customer service element of this brings us back to the maxim that every customer interaction is an opportunity to provide great service and to build the customer's relationship with the brand.

Also with technology, a mobile-first mindset is something that many firms are starting to cultivate. They have recognized that for many consumers the way that digital media is consumed has moved to mobile. Many people for some reason choose mobile in the home, despite its shortcomings relative to consumers. This means that the more people rely on mobile, the more that marketers and customer service needs to be focused on mobile as a key element of customer interaction. One of the most interesting aspects of this is that, increasingly, customers expect outbound communications (Leggett, 2014). Where at one point you might have had to pay a newspaper to publicize a deal and hope someone noticed, today customers have signed up to your Twitter feed specifically because they want such notifications. If you have a sale and don't send out a tweet, customers will actually get annoyed about this -- outbound communication has become a much more important element of the customer service experience in the mobile age.

Related to the outbound trend, customers are also increasingly turning to companies for time-saving. Thus, companies are expected to engage more with customers, and must be proactive in doing so. Consider if a customer posts on their Facebook a complaint about an airline -- maybe Delta lost their luggage or something. Many times customers will be dissatisfied but never contact the company. They will, however, tell their friends. That is what is happening when the customer makes a post like this. Now, the company has an opportunity to respond. It is worth remembering that with a high customer orientation has always valued the idea that complaints are opportunities to strengthen the brand and improve loyalty (Plymire, 1992; Tax & Brown, 1998). The idea is old, but the new trend is being able to access customer complaints that are not directed to the company.

Importance of Change

Making changes to a company's customer orientation can occur for a number of reasons, but ultimately poor performance is probably one of them. As the competitive environment evolves, companies need to adapt. When a new competitor enters the industry and the main differentiation that it has is superior service, that is something that will force a change from the other competitors. Even in the absence of changes to the competitive environment, many firms that previously didn't have a high customer orientation have realized that they can increase sales faster by improving their service standards. It is important to understand that for many companies this shift is incremental in nature -- most big companies have reasonable service levels. Companies with lousy service end up not having too many customers. So the change could be internally-driven if sales were below expectations or there was a customer service crisis.

Once the change has been made, it should be easy to incorporate into future plans. A firm that has established a customer orientation culture can then build on that culture fairly easily. While the current trends in customer service are mainly in technology, that might change in the future and companies will be compelled to adapt again. But the underlying culture is the most important part, because once that is in place the precise tactics by which the company will offer superior service can be implemented and changed quite freely. For any firm that is seeking to increase its customer orientation, it has to start with the organizational culture, right at the highest levels of the organization. It needs to be built into the company's DNA, starting with the CEO, and the organization's strategy. Then, customer service standards can be modernized.