Ep. 30 | Customer Centricity Right for Your Company?

There are many points of resistance when organizations try to become customer-centric. From executive understanding to data silos, the path is not easy to navigate. This week host Allison Hartsoe interviews Jeff Gardner from Staples who has seen customer-centric data strategies not only succeed but unlock 7-10x more value within companies. How does this kind of customer-driven, data-driven change management take place? Slowly and carefully. Hear the stories of quick wins on this week’s episode.

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Allison Hartsoe – 00:04 – This is the Customer Equity Accelerator, a weekly show for marketing executives who need to accelerate customer-centric thinking at digital maturity. I’m your host, Allison Hartsoe of Ambition Data. This show features innovative guests who share quick winds on how to improve your bottom line while creating happier, more valuable customers.

Ready to accelerate? Let’s go!

Allison Hartsoe – Welcome, everyone. Today’s show is about whether customer centricity is right, actually right for your company, and help me discuss this topic is Jeff Gardner. Jeff is the Marketing Manager at Staples and frankly one of the sharpest thinkers I have run across on this subject. Jeff, welcome to the show.

Jeff Gardner – 00:50 – Hey Allison. Thanks for the warm introduction. I appreciate the opportunity to join you on today’s podcast.

Allison Hartsoe – 00:55 – Thank you. Now people, especially of let’s say my generation, I won’t pull you into this and our generation, but from the time I was a kid, no one was trying to become an analyst when they grew up, if anything, they were going to be a computer programmer, and that was the sexy job of the of the time. How did you get from wherever you started to this topic of clv were you dreaming of doing spreadsheets when you were a kid?

Jeff Gardner – 01:26 – And I love the way you framed the question. No, I didn’t grow up like, you know, wanting to be an excel guru or anything like that. Um, I’d say that I really learned how to implement a customer centricity, um, you know, very early in my professional career, um, you know, I was a consultant and I was supporting clients and range of industries as they were adopting centricity within a division or a business unit. And I kind of just developed that Natural Lens, if you will, on the business. And then later on as I started to work in corporate roles, um, I just borrowed those early experiences, um, and they shaped, you know, how I would execute in my role. Um, so I, I think I’m very much like anybody else who’s kind of come up through the ranks and the functional domain only, you know, the functional domain that I would aspire to be, you know, customer centricity

Allison Hartsoe – 02:17 – and what a great place to aspire. Now tell us a little bit more about what your team does or what you specifically do at Staples.

Jeff Gardner – 02:25 – My role has recently changed. So, um, I’ll, you know, I’ll start out by saying that, um, you know, the role I had a, you know, three months ago was really leading a small team of four people and we were implementing customer centricity within a business unit that generates several billion dollars in revenues annually. Um, so in that role, you know, my team and my work streams, they included how do you assimilate, you know, customer segmentation, you can to a marketing process or marketing procedures. And then it was, you know, working with analytics teams to create a customer-centric data model that would allow, you know, functional partners to tap into what marketing was doing and to support in new marketing procedures. I also worked with leadership cross-functionally to identify and implement some simple process changes that, that aligned with the, you know, the vision. And then, um, and then I drafted new reporting that just showed you created more transparency around, um, you know, sources of revenue lift.

Jeff Gardner – 03:30 – So it was, it was really, part analytics was part process management in this part, working and listening to leadership and understanding their views on the business. Um, and then, and then working with them to make sure that the changes that were happening in marketing could be supported in my current role. And this is the one that I’ve had over the last three months. Um, you know, I’m working with a team that’s defining segmentation differently. It actually needs to reflect the customer value across three interrelated business units. So the scope has grown and um, you know, the stakes if you will, are getting a little bit larger.

Allison Hartsoe – 04:08 – What’s so amazing about that story is most people who have worked with customer lifetime value have tinkered with it here and there or maybe have applied it in one particular scenario, but very few have taken it all the way through to a successful case within one part of the organization. And then the expansion to the rest of the organization. And I think that expansion is definitely a major flag that says, yes, people have been convinced people, have bought in because that, that is the natural move in the curve. The way we outline the customer-centric maturity curve is you end up with a pocketed when and then that wind starts to spread out across the organization. And that sounds like indeed what’s happening with your work at staples, which is fantastic.

Jeff Gardner – 05:02 – Yeah. I would say in our case it’s, um, you can only do so much within one functional domain. Things are interrelated. So, you know, you show initial success through, um, you know, more advanced marketing tactics and then you can, you can only go so far with that, and you need the support. I would say, um, you know, a pricing function or a merchandising function, um, and, and with their support you can, um, it helps marketing even be crisper. So it, it’s definitely something where, you know, as you show success, you want to share it, you want to foster collaboration, and you want to help that success take root.

Allison Hartsoe – 05:42 – Absolutely. So one of the concepts behind customer centricity and customer lifetime value is, has, has always been that, isn’t it for everyone, isn’t it? Isn’t the application the ability to predict clv something that helped with a few exceptions almost everyone can use or do you think it’s more like, you know, you’re going to win a gold medal at the Olympics, and only some people have Michael Phelps’s physique, and other people are simply not going to be as strong of a competitor or maybe not right for the Olympics at all.

Jeff Gardner – 06:19 – I have to say, I love the metaphor. I’ve never heard of Olympic competition compared to customer centricity. So I definitely love that. Um, I’d actually say yes to the first half of the question. And basically what I mean by that is, is, you know, an Olympic athlete might have to undertake some intensive training to compete at the highest level. Whereas centricity is, is really, it’s a simple initiative. Um, it, it projects your most valued customers at some future point in time. And then, um, you know, the company has to address, you know, what it’s going to do to ensure that those, those customers are still around when that future date rolls around. So it’s definitely not as-as, um, advanced or intense if you will, is Olympic training.

Allison Hartsoe – 07:07 – Well that’s good, but it does seem that some companies pick it up but don’t actually adopt it, or maybe I should say adapt to it and other companies do. Why is that?

Jeff Gardner – 07:19 – I think you have to have the right situation and in the right setting. So in my experience, both as a consultant and as a practitioner, I’d say they’re, you know, I, I can kind of put the situation into one of three types. The first type is, is a company who’s sending, right? They’re, they’re, they’re in a high rate of growth. They’ve got a lot of new customers that are, that are being acquired. Um, associates are coming on board at a, at a pretty good rate. Procedures and, and functional priorities are still fluid in that scenario. I don’t know that customers interested in would really be able to take root. I think, you know, they might want to adopt it, but there’s just so much going on, and there’s so much that’s still kind of influx that centricity might be countercultural. I’m the second scenario, might be where an organization’s in a regulated marketplace or where they’re there, they have a fixed value associated with a customer.

Jeff Gardner – 08:19 – So something that comes to mind is maybe you have a platform and every single customer is going to pay the same amount, um, in, in that scenario modeling, your customer may not actually translate into anything that you can do in the marketplace to generate a higher return, if you will, on a customer basis. Um, so in that type of scenario, I’d say you’re probably not going to see a centricity take root. Um, the third scenario is the one and that’s the most typical setting. It’s really where an organization’s competing in an open market. It already has a diverse customer portfolio. It’s got stable internal procedures, and upper management really has a desire to increase growth using, you know, basically organically it doesn’t want to do it through m and a, or it doesn’t want to do it through, you know, any other type of financial, you know, any other financial means.

Jeff Gardner – 09:16 – They simply want to acquire more high valued customers. You know, in that scenario, the third one, that’s where a customer’s interested. He actually has the best opportunity to take root and to return, you know, relatively high dividends.

Allison Hartsoe – 09:34 – I see. So, let me just repeat this back and make sure that I got our three areas and maybe we can talk through them a little bit more. What the first type. I almost think about it as a startup. It’s an up and coming company that doesn’t have a lot to Liz, and they’re um, they’re able to go after customers but they, they might not have a true sense of who the customer is. They don’t have enough history. They’re just kind of out there to do something new and fresh and maybe customer lifetime value isn’t yet their right metric. Is that right?

Jeff Gardner – 10:13 – Yeah. And I mean, a, a great contemporary example is, um, you know, a company that, that, you know, I’ve had the opportunity to work with, I’m a service provider that works in conjunction with, you know, like Amazon web services, you know, like so hosted data and in that environment it’s, it’s really a land grab, you know, these companies are really trying to scale up as quickly as they can because the demand for, for Amazon services is so high. So if they stopped to, you know, if more or less they tapped the brakes and thought about customer lifetime value at this point, it would really, it would really be countercultural to, to kind of where they’re at in their, uh, in their organizational kind of model, if you will.

Allison Hartsoe – 11:01 – Got it. Yeah, I like that analogy of a land grab because I do think that creates a much different market scenario than, than the opposite, which is a company that’s been successful in spite of itself. Which I think was your third version. But let’s, let’s stick with the second one for a minute.

Jeff Gardner – 11:19 – I love the way that you frame things. I’m totally in agreement.

Allison Hartsoe – 11:26 – Great minds think alike, right? So that second part where you were talking about maybe the complexity of the business is just too great. You, you’ve got government regulation, you’ve got a platform, you’ve got maybe artificial barriers that cause people not be able to move around very easily. Um, I liked, I don’t know if you necessarily think of banking in this space, but I often do because it’s just difficult to unplug from my bank and the regulations are quite high, although every time I stop into my bank it has a little flag that says high-value customer, and then they tend just to sell me more product and you know, it’s like, it’s like the high-value customer flag just simply means load me up with products. I need more credit cards; I need more interest-bearing accounts, I need more mortgages. That’s just the wrong way to think about it. But is that a good way to size up the middle group?

Jeff Gardner – 12:32 – I think that’s a great one. Um, another example is in some companies that actually build oil rigs, right? So if you’re a company that builds an oil rig, you got a lot of regulation, a lot of things that are are more as directing how you might go out a project and the actual pricing involved in that project is going to be negotiated heavily negotiated between your company and the customer so you can sit back and model customer lifetime value, but at the end of the day there’s going to be a lot of hurdles that are going to get in between that, that estimate and the actual market kind of value that you’re going to realize. So those are, you know, utilities might be another one, you know, you can say utilities, they pretty much have to operate within whatever regulations to the local governments are the state government’s set. So they can also model customer value. But at the end of the day they’ve got to work through external types of organizations are factors to implement it. So I love the banking one. I said that’s a great example. And then there are a few other ones just to consider.

Allison Hartsoe – 13:39 – Although I do think there’s an interesting twist on banking and that when I see membership associations who offer banking services, that is a different twist because they have the core nugget of the customer already at the center of everything they do and they tend to think about that person holistically out of the gate by their definition as a membership organization. Would you agree?

Jeff Gardner – 14:04 – Yeah, I would say where you have, you know, that type of a model, a model that you may have a customer who’s cross-shopping, you know, within your, within your business, through either a different division or business unit. I definitely would agree with you on that one. That customer centricity could take root there where it might not take root in a, in a, a larger organization, more complex organization.

Allison Hartsoe – 14:29 – Okay. What about companies like Walmart, Costco, people who are making their business on high volume, low price, would you put them in the middle bucket or would you put them in the. The third bucket of companies who are right for clv.

Jeff Gardner – 14:51 – Oh, I definitely would put those two in the. In the third bucket, when you have a company like Costco, for example, um, you know, do they have a diverse portfolio of customers, um, and, and when you have diversity, you have what you might call variability in how customers are interacting with your, with your offer, with your company. So in Costco’s case, uh, they might market to certain customer segments differently based on whether they’re a business or a consumer. They might also, um, market to customers differently based on what their particular buying habits have been over the past, say six months or so. So it’s the idea of having a relatively robust or large portfolio of customers. You’re managing that relationship with those customers on an ongoing basis, and you’re in a position where you can influence them to buy and where you can make small changes over time, you can realize, you know, what you’ve projected in the future. Um, so those are the conditions that I would say need to be in play for our company to truly realize strong gains from centricity.

Allison Hartsoe – 16:03 – So let’s push on that third bucket a little bit. I imagine that for those companies that are, have an established portfolio and diverse customer base, that they’re also vulnerable to smaller competitors coming in and nibbling are taking big bites out of their portfolio. Does that help or hurt

Jeff Gardner – 16:26 – in terms of adopting customer centricity? I’d say that’s definitely a catalyst or it’s, it’s a reason why companies would want to adopt it. We now compete in a global economy. And what that means is that pretty much everyone is gaining access to the same set of customers and technologies, stimulating some tremendous competition. You can; you can encode almost any physical experience today in medicine. You know the Internet is being used as a form of access and, and technologies being used as a diagnostic device for, for doctors and medical practitioners. You’ve got Uber who’s now a serious threat. It’s not a challenger in, uh, you know, for taxi drivers. So everywhere you look you see technology making inroads and an upsetting, if you will, to competitive balance and industries. Um, so I would say that’s definitely something that, that should really create a sense of urgency and, um, can adopting something like customer centricity.

Allison Hartsoe – 17:31 – I love that and that was my assumption too, is it would kind of be the canary in the coal mine and there’s the sense of urgency of if you don’t act, something’s going to happen, but, but I love the global perspective that you brought in because sometimes we tend to think I’m in the market, velocities are different, and we tend to think that the US is so far ahead in so many ways, but if you saw the recent Mary Meeker presentation, you know, China which has been going gangbusters for awhile, is not only going gangbusters still, but they’re approaching problems in a different way. They’re solving for that efficiency, effectiveness experience in ways that we might not yet think of. So the idea that you’ll get maybe a ten cent, or an Alibaba can suddenly become a major player in the US market has been fairly foreign to us, but maybe not so much in the future.

Jeff Gardner – 18:25 – I would completely agree. I would say the opposite is also taking place. So the company that I had talked about earlier, who’s more or less service, a service hosted a data space. They’re actually acquiring customers. And, uh, you know, in Thailand, um, across the globe and you’ve got other US companies that are much more notable like Netflix, who, who’s pretty much operating in every modern city or, or you know, modern country. So I would say that the story would go both ways. You know, you, you have a definitely foreign competitors who can come into the US and can claim space, but you also have the opportunity once you’ve identified who your ideal customers are, the opportunity to go globally as well.

Allison Hartsoe – 19:12 – Yeah, yeah. If we can, and I don’t know how much you can actually talk about staples, but I bet you have a whole bunch of examples. Let’s maybe shift gears a little bit and see if there are, what, what are the particular ways that you’ve seen companies be successful by adopting clv? Is it always the marketing department? Is that, are there some other interesting examples we can talk through?

Jeff Gardner – 19:36 – Absolutely. Where centricity takes root. It can be, it can be marketing can also be in an operational setting, um, or it can be something that is, um, uh, is a very much a top-down initiative where a CEO might say to his direct reports, this is something that’s vital for, you know, for, for our future success and, and we’re going to champion this, you know, as a team and we’re going to make this happen. In my case, uh, I’ve worked with, you know, divisions and those divisions are generally being managed by, you know, a vice president who is chartered within implementing and executing on customer centricity. So I would say it’s very much something that would be a top-down initiative and that’s something that can really come out of, if you will, some type of functional emphasis.

Jeff Gardner – 20:29 – But the, um, at the end of the day, some of the examples are, um, you know, one, I worked with a company in China for a couple of years and there for a and disinterested. It was really, um, something that came out of a change in their government’s policy. So the government had basically closed market. So that this company was a, a pulp manufacturer and I’m a paper manufacturer.

Allison Hartsoe – 20:53 – Yeah. A lot of those in the market.

Jeff Gardner – 20:56 – Yeah, that’s great. So hopefully someone in Oregon who might be working in one of those firms will pick something up because this company actually did some really positive things. The, uh, the government it had closed the market too, to protect their own industry and had also been then decided to open the market. And then the CEO has hired our firm to come in and help their divisions become more competitive. So anticipating foreigners would be coming in and they wanted to be ready for a change in their market. And in this case, what would the CEO did? Was He actually implemented a policy where crossfunctional teams were brought together? We’re taught, you know, the precepts of customer centricity, you know, so it started with how do you analyze data and how do you gather customer information, how do you translate, you know, what you’re getting from the customer into operational KPIs.

Jeff Gardner – 21:55 – And then how do you realize the gains, you know, through marketing and through product development and more or less commercialization. So in the early part, we realized that these individuals were somewhat new to the concept of centricity and customer value. Their mentality was it was really about price concession so they would more or less take share from, from other local competitors by lowering price. So it took them several months to kind of absorb the material and start to practice and within I’d say a year and a half to two years, they were actually developing some very impressive commercialization projects that were very clearly directed towards customers that were buying in high volumes. Ones that, that they realized a substantial net profit from and ones that they felt would be worthwhile to, to hold onto when these foreign competitors came into the market.

Jeff Gardner – 22:52 – So in that example, I’d say there were two really neat things that came out of the exercise. One was their ability to, to transfer what they’ve learned into commercialization. And two, it was the fact that they started with this cross-functional approach and they were actually able to, um, take away language barriers where we know we’re a financial person might need the data translated into financial statements and a product person might need things translated into product specifications, and a salesperson might eat things translated into a value proposition. They were able to actually collectively kind of develop the commercialization project, that type of translation happen naturally as they were doing it. So that was one cool thing

Allison Hartsoe – 23:41 – It is cool, and it really underscores, which I think is the fundamental point when you do customer centricity or really trying to identify those high-value customers. But then once you’ve identified them, what do you do next? How do you know maybe build walls to defend them too, to keep them happy, to keep innovating? I think that’s a really interesting area that it sounds like at least they were able to not just absorb the concept, but as you said, transfer it into commercialization and then build on the concept and grow from there.

Jeff Gardner – 24:16 – Absolutely. The same story plays out with US companies that we worked with as well. One company was in commercial space, they were a supplier of construction products, and this is kind of an interesting story, so the division that we worked with was one that actually had a retail as one of its distribution channels, so they, they were actually developing products that can be sold through retailers, and they’re high-value customer, in this case, were women who did it yourself first and they actually developed a product that appeals that had a special packaging design weight form factor, if you will, that appealed to women do it yourself or others and you know, the only way they would have ever started thinking about that was going back and analyzing who their high valued customers. We’re in this space, and in this case, it happened to be women who are taking on these home improvement projects.

Allison Hartsoe – 25:16 – Oh, nice. Was the US company that you mentioned, was it all about retail or retail? One segment of the company?

Jeff Gardner – 25:24 – Yeah, it was just one. It was actually one division.

Allison Hartsoe – 25:28 – What that says to me is there’s an interesting way to break down the information is when we’re looking at it from a high-value customer perspective, it usually goes across products, across divisions. You end up with a much bigger ranking and rating that you can do have opportunities. So I’m picturing this US company now running all their high-value customers and then seeing what parts of the organization they are dense in and then getting more color around them and then trying to say, well, what’s the opportunity here? Do you think that’s what most companies do? Or is it just what more successful companies do?

Jeff Gardner – 26:07 – Well, are we talking in the application of customer centricity or are we talking more gen? It’s a very straightforward exercise. So you basically started out with, you know, and then this is what Peter Fader is, has really been pioneering over the past five, ten years. Um, but really it’s, here’s the yardstick that we want to use to define what’s at stake, right? That’s the old part of it. That’s what we want to use to discriminate. You know, who it is we want to invest in. We need to have the right financial instruments to make those, but we can’t continue to, you know, the company can continue to do things the same way to reach that future value. It has to innovate, so it’s taking the clv and then marrying it up with innovative ideas that are going to enhance the relationship that customers are going to have with their companies and that actually works in two ways.

Jeff Gardner – 27:07 – One way is, is would companies we’re currently, you know, part of the portfolio. It obviously it goes a long way to ensure they’re going to be around in the future, but the second way is as you’re targeting those new prospects, the ones that you think are going to be your high-value customers in the future, you’re actually developing this platform that you can now use to direct those relationships in the way that you’ve envisioned. Right? So you’re, you’re more deliberate and more predictable, you know, with those relationships. And that is something that I think is what can insulate a company who’s using customer centricity. They can insulate them a little bit more from, from competitive pressures. They’re not as reactive, if you will, to make us a very short-term shift because they know who their high-value customers are, they understand what’s at stake, and they’re. They’re willing to kind of stay the course a little bit more to realize those returns

Allison Hartsoe – 28:10 – And I think what’s embedded underneath your comment as well. When they innovate for those newer customers, and they have that platform, they’re also looking at ways that the value trade can happen back and forth. Maybe those customers are coming in and making the company better in some way. An example I recently was that Google’s searchers make the google product better because their usage feeds data back to google about what to what to fix, how to improve, and the specific example, and the one I was reading was that they experimented with the number of search results on the page and the data coming back from users said, we want more information coming back with every search result, you know, more hits, but that wasn’t actually right what people wanted was speed.

Allison Hartsoe – 29:05 – They wanted to get to the answer more quickly. So it just reminded me of that. Like faster horse comment, we always hear about Ford, Henry Ford that gets quoted everywhere. So is there kind of a flywheel effect where these organizations develop not just a customer relationship but feed off of that customer relationship in a symbiotic fashion?

Jeff Gardner – 29:27 – Yeah, and actually I think you’re tapping into something that is a little bit counterintuitive to most people. I would say the popular mindset is, is doing something like customer centricity is expensive or it’s something that distracts the business from, from serving the customer. The example that you’re pointing out is that it’s actually an enabler of better relationships and, um, and, and more predictable relationships. And also it opens the door for symbiotic if you will, or, or, or two-way types of, of the value exchange. Um, when you know who your high-value customers are and you’re attuned to what they’re doing, and you’re taking that engagement as a measure of your performance, you have a much more reliable predictor of actually how your business, what’s your business standing is, if you will, versus competitors.

Jeff Gardner – 30:25 – A lot of companies put a lot of belief in the external research and things of that nature, but when you actually can do what you just described, when you can actually take the data or take that engagement and use it as a metric of performance, it does create that flywheel effect where you’re, you’re systematically getting better at the things that the customers are valuing most.

Allison Hartsoe – 30:49 – I have to credit to different authors who are, who has influenced my question behind the scenes as I was talking to you today. One is Bryan Eisenberg, who had an episode that just came out recently and his book is like Amazon, and he talks about the flywheel effect, and the other is Michael’s Schrage, and he wrote a book, uh, who do you want your customers to become? And his concept is about that value transformation. So I’ll put those in the notes for our listeners in case they want to dig into those concepts some more. But thank you for, for calling that out. You probably haven’t even read those books, and you already knew it, right?

Jeff Gardner – 31:32 – Actually, I had read an article that Michael had written for Harvard Business Review, so I was familiar with, with his point of view. Um, I wasn’t, I was actually pleasantly surprised because, you know, I had the same point of view, but I’d come from a completely different perspective. But yeah, it was nice to hear an affirmation that the value exchange is real and picks a place.

Allison Hartsoe – 31:59 – Ahead of your time, Jeff. Just ahead of your time. What about other examples? Are there maybe one more that you want to share with us?

Jeff Gardner – 32:04 – Yeah, I mean, and on the note of the expense, one of the other things that I’ve seen is companies who adopt centricity are actually in a position to work to spread costs if you will, or share costs with, with partners. In the case of think of retailers, for example, there’s a lot of investment that you know, key suppliers might make. And um, I know firsthand that a company who had implemented centricity actually had started getting very, very large increases in those key supplier investments. And it was simply because they could, they could rationalize you, they could sit down with these people, and they could show them the numbers, and they could show them how reliable the numbers were and partners like reliability and they like good investments. So, in that case, it was a win-win, you know, the same thing started happening in a, a financial services organization.

Jeff Gardner – 32:57 – Basically we worked with a company that was one of the largest automotive financing divisions, you know, in the US. And um, when we sat down, and we showed them the CLV numbers, it was, it was like an epiphany. They, they began to realize that they were putting bids of which are basically rate quotes and, and dealer incentives, you know, they were putting bids into the marketplace for customers that they thought were going to be very reliable in terms of repayment, in terms of their credit score and so much and so on and so forth. But what they didn’t realize was there were other customer segments that were larger regarding the total market opportunity that they were not being competitive with and paying higher. Ultimately, we’re paying more for these customers, but these customers were actually yielding much higher returns

Jeff Gardner – 33:50 – and what ended up happening was they went to these dealers and asked for preferential treatment. In another word, they wanted the ability to know when these particular buyers were coming into the dealerships, and they also wanted the ability to have an equal opportunity to kind of put bids in front of them. Um, so it opened the door to a segment of the market that they really have a lot of inroads into and it was only because they realized the value of these customers that they could sit down and have these discussions. So like I said, I think in some ways it’s counterintuitive. People think of it as an operational expense, but on the flip side, it opens your eyes to new market opportunities and new opportunities for partnership and investment that you know, you really, you may not have realized otherwise.

Allison Hartsoe – 34:38 – That’s a really great pull through a big area. We do need to point out because it is often seen as almost a tactical application and it is so much more. It’s, it’s a, it’s a complete pivot of the organization, as you’ve said. It’s, it’s a new market, new partnerships, it changes the way you think about everything in your business and that’s a good thing.

Jeff Gardner – 35:05 – It’s fun. It’s so much fun. A lot of organizations pride themselves on their ability to be nimble, and they pride themselves on their ability to, you know, to do a lot and to do a lot quickly, and as centricity starts to take root, you can actually simplify things and you can actually start to spend less time trying to interpret things becomes a lot easier to understand, you know, what’s at stake, you have clearer yardsticks, you’re not as reactive, you know, to short-term bumps. So I’d say it actually in my experience over the past 18 months, it was a lot of fun. It’s very collaborative. There’s a lot of innovation that happens. It’s really a neat thing.

Allison Hartsoe – 35:55 – That’s great. So let’s say that you had been listening to the show. I’m so excited I wanted to get this going. What would you recommend that people do to start in the right way or-or perhaps to evaluate whether they’re ready for this?

Jeff Gardner – 36:11 – It definitely needs to be a top-down initiative, so you-you need sponsorship, so I’d say know the first foundational pieces is to have someone in an executive capacity or someone on a senior leadership team who is sponsoring the view, the initiative. From there I’d say it’s really straightforward. You assess your customer portfolio, you begin to understand the source of the current source of value, and in my case, it’s always you know, a net margin or net profit, and once you begin to do that, you follow that up with an understanding of the how. You basically have the what with the segmentation, and then you start analyzing the how. Which is how are these customers interacting with us? How often are they interacting with us? How deeply are they engaged with us?

Jeff Gardner – 37:11 – Are they crossed or they are basically buying across divisions. Whatever the realm or the scope of the relationship is. You know, you have to start to kind of fill those pieces in to help you assess the, what’s happening from there, I’d say it’s initiating pilots and pilots can be done either in acquiring new customers that you think are going to resemble your best customers today or it can be innovating a new opportunity for those customers to do even more with you. And what I mean by that is simply the example that I used earlier where a company had identified that there were women do it yourselfers, and they weren’t getting the right level of support that they deserved and these projects. And so they innovated a solution that would help these women to accomplish, you know, their projects faster, more cheaply and more easily.

Jeff Gardner – 38:09 – So it’s that straightforward. And then that is something that is run as a pilot. And then once it starts to prove its merit, you can scale it up. You can follow up with more innovation, um, exercises. Or you can start to transfer center city, you know, to other parts of the business.

Allison Hartsoe – 38:31 – That’s fantastic. That’s great. So just if people want to get in touch with you and me could go on in our conversation for quite some time, but unfortunately we are restricted to adjust a certain amount of time and if people want to follow up and ask you questions, is there a particular way that you like them to get in touch?

Jeff Gardner – 38:50 – You know, my email address is um, Jeff. jeff@rinsight, so it’s just the letter r and the word insight, rinsight.com and this is something that I’m particularly passionate about, so I’m happy to answer questions or um, you know, if someone’s struggling with some, some element of customer centricity and happy to help them maybe understand the situation a little bit differently. So. Absolutely.

Allison Hartsoe – 39:17 – Great. Great. Well now let’s do a quick summary. We’ve been talking for a bit, and I want to call back to what we talked about at the top of the show, which was there basically three, or do you think there might be three different buckets of companies and only one of them is really right for the customer centricity right now. Meaning, you know, clv driven actions, the first bucket of companies that are very new there, they’ve got perhaps a lot of opportunities, but they’re in a land grab space is not really the right place to start the second area where companies have a lot of heavy government regulation, or maybe they’re in a third world culture or they’re in spaces where there’s a heavy negotiation around pricing and places where there are artificial restrictions around the business, and the complexity is very high. It’s also not a great place to start.

Allison Hartsoe – 40:13 – I think we talked about utilities and oil at this point two, and then the third place where it is a good place to start is you’ve got maybe an established portfolio as a diversity amongst the customer base. Uh, and you’re in a relatively large free market space that allows you to acquire customers. And it’s precise because acquiring those customers is fairly open and you know, maybe the barriers are maybe lower than the other two groups that this makes it a ripe place for running the calculations and finding those high-value customers. And those high-value customers, as you said, towards the end of the show that can help you discern what decisions are the right decisions to make. It almost reminded me of when you said companies like to be this fast and making a lot of quick decisions and moving along and executing.

Allison Hartsoe – 41:08 – It almost reminded me of busy work in a way where you can get a lot of actions done, but are they the right actions? So that beautiful simplicity of this is the right action, and this is why is what comes out of that. That third group when you start to execute on clv. And did I miss anything there so far?

Jeff Gardner – 41:28 – You actually summed it up very succinctly and very well.

Allison Hartsoe – 41:33 – Good. Then we talked about a couple of different examples. The paper company. I won’t go into those again, but I do want to pull out what you said about when we look at Peter Fade’rs model, it’s a great yardstick for what to define, but then it’s not just helping stick the high-value customers. You’ll identify them and help them stay. And the secondary effect, which is helping them to, you know, maybe internally you create a platform or systems to help support them, but there’s a follow-on capability here that’s not really covered in Fader’s work, and that’s the whole innovation side. But once you get that Lens, the ability to move beyond and you know, you’ve got your systems down, you’ve got your patterns down, but now how can you really be of service to the customer? How can you really think beyond an innovating your packages and your concepts and different ways to pull information together.

Allison Hartsoe – 42:28 – And. And that’s I also think where you talked about new markets and partnerships and taking it out through the operational strains of the company. That is part that most people aren’t really thinking about today, but it’s a very powerful application that companies can eventually get to.

Jeff Gardner – 42:44 – Yeah, I mean in my experience, companies are trying to do the right thing. Everybody is educated to understand their domain expertise, and then they come in, and they follow the right procedures, and everybody is doing the things that they believe are going to help the company achieve its goals are. That’s the nature of what we do day in, day out, but in many cases what happens is we reached this point where things become complex like we have a lot of programs that we’re managing. We have a lot of opportunities that we can think about as next steps. We’re sending out a lot of different marketing materials, and we’re trying to track them all and we’re trying to measure the effectiveness of all of them and the and the reason that we’re doing all of these things and it feels somewhat complex is because we really don’t have a true signal through all the noise.

Jeff Gardner – 43:44 – So we’re trying. We compensate for that by adding a lot into what we do, which is fine because at the end of the day, if everybody’s doing the same thing, then-then we’re all okay. Where things start actually to get exciting is where you start to say, wow, I can see that there’s this opportunity out there that’s really, really important. And also very, very tangible. Like I can quantify it. I can. I can look at it in different ways. And, and when you have that insight, they achieve tremendous things. And an example that I had shared in a different conversation is a high-value customer tends to be five, seven, ten times as, as an average customer.

Allison Hartsoe – 44:32 – Wow.

Jeff Gardner – 44:33 – So, yeah, so when you’re working on projects that are focused on that Delta of value and you start launching pilots and realizing the gains from those programs, it doesn’t take long for these new projects to start to really add up and add practical terms. I’ve seen these programs generate millions of dollars over a period of several months and these are profitable dollars. These aren’t dollars that are; you’re basically conceding margin to win share. Um, so it, it, it translates into a much clearer path, if you will, from where you are today to kind of where you want to be. You know, down the road you can still be complex, you can still do all those other things. But this just gives you a sense of knowing that you’re on the right path or that you’re directing everything to the right goals.

Allison Hartsoe – 45:21 – The signal in the noise. Right.

Jeff Gardner – 45:23 – I think that’s your term. I might’ve picked up yours.

Allison Hartsoe – 45:28 – I will think about it that way. This has been wonderful. I’ve just so enjoyed talking to you. As always, links to everything we discussed, our ambitiondata.com/podcast. Jeff, thank you for taking the time and walking us through these ideas and these far-ranging applications that are well beyond the everyday thinking.

Jeff Gardner – 45:50 – Oh, you’re welcome. Allison. Thanks for the opportunity to share the podcast with you.

Allison Hartsoe – 45:54 – Remember everyone, when you use your data effectively, you can build customer equity. It is not magic. It’s just a very specific journey that you can follow to get results. Thank you for joining today’s show. This is Allison. Just a few things before you head out. Every Friday I put together a short bulleted list of three to five things I’ve seen that represent customer equity signal, not noise, and believe me, there’s a lot of noise out there. I actually call this email the signal things I include could be smart tools. I’ve run across articles, I’ve shared cool statistics or people and companies I think are doing amazing work, building customer equity. If you’d like to receive this nugget of goodness each week, you can sign up at ambitiondata.com, and you’ll get the very next one. I hope you enjoy the signal. See you next week on the Customer Equity Accelerator.