How High-Performance Companies Make Sure Their Customers Rule

Imagine stopping by your bank to make a withdrawal from the ATM, only to have tickets for the trip of a lifetime emerge from the cash slot. Sounds crazy, right? Maybe not—it happened recently to a few customers of TD Bank Canada, who were the unsuspecting beneficiaries of a creative customer-engaging initiative.

The "#TDThanksYou" campaign drew widespread media attention after the bank extended invitations to some of its most loyal customers to try new ATMs at some of its locations. Instead of deposits and withdrawals, the "Automatic Thanking Machines" dispensed special, personalized gifts to select long-standing customers (who were nominated by tellers), which included airline tickets to visit an ailing relative in another country, Disney passes for deserving children, and an opportunity for a baseball fan to hurl the first pitch at a Toronto Blue Jays game. Thousands of other customers received cash rewards and more modest goodies.

Successful effort by the bank? You bet. The delighted reactions of customers was captured on video and provide testimony to the effectiveness of the campaign, which quickly went viral on YouTube.

In other customer-focused news: Brooks Brothers now enables its customers to design their own suits. Pepperidge Farm invites fanciers of its Goldfish® crackers to create their own product packaging and fill it with their favorite colors for special occasions. Bicycle firm Trek's Project One program gives customers the option of crafting custom hand-built bikes by making their own model, fit, component, and style decisions from which the company then constructs one-of-a-kind products. And check most any register receipt you've received lately to find your retailer's invitation to connect online and offer your feedback.

There are many more examples of companies that engage in various ways with their customers, but you get the idea. Exciting and innovative opportunities are forging closer-than-ever connections between organizations of all sorts and the consumers who keep them in business. The importance of those customer connections is embraced by most companies, but a collaborative study by the Institute for Corporate Productivity (i4cp) and the American Management Association (AMA) confirms that high-performance organizations apply some special insights to reap better results with their investments in customer-focused practices.

The Customer-Focused Organization: How Alignment, Advocacy, Data, and Technology Drive High-Performance (non-members: download the executive summary) explored each of those elements to see what high-performers (based on revenue growth, market share, profitability, and customer satisfaction over time) do. The research identified a number of differentiating practices that stood out:

• High-performance organizations (HPOs) make their talent practices pay off. The Study found HPOs 3x more likely than lower-performers to keep customer alignment in mind by hiring job applicants who can demonstrate their customer orientation. Further, HPOs are 2.5x more likely to leverage their diverse workforces to better understand and meet customer needs. For example, i4cp member company Mattel asked its African-American employee resource group to participate in decisions about key features and packaging for a new line of dolls.

• Most companies strive for customer satisfaction; high-performance organizations also want their customers engaged and active. Yes, customer satisfaction is the worldwide gold standard for customer-focus measurement, but the study found that high-performers also track customer engagement at a rate nearly 3x that of lower-performing companies. And the real differentiator of high-performance? Customer referrals. This least-used measure of customer-focus—which HPOs track at a rate almost 2.5x that of lower-performers—emerged as a next practice strongly correlated to both market performance and customer-focus effectiveness.

• For high-performers, information spells advantage. With their products, services, and business strategies shaped by information from and about customers, high-performance companies transform that customer data into competitive advantage in other ways, too. For instance, at a rate 2.5x that of lower-performers, HPOs link employee performance evaluations to customer-focus measures. They also base development plans for workers (and managers) on customer insights. And taking a cue from Pepperidge Farm and Trek, about half of HPOs surveyed for the Study said they involve customers in product design—more than twice the percentage of lower-performers who do so.

• High tech = high touch for high-performers. Few innovations have had as profound an effect on organizations' relationships with their customers as social media. High-performance companies are twice as likely as lower-performers to leverage customer satisfaction surveys, and delivering those surveys via social media correlated strongly to both market performance and customer-focus effectiveness. But it's collaboration that makes social media a real game-changer: HPOs were a whopping 7x more likely to use social media as a collaborative tool, inviting customers' participation to help turn their feedback into constructive action.

Global real estate firm Colliers International is a company with a strong culture of customer collaboration. In comments for The Customer-Focused Organization report, chief human resources officer Mindy Geisser succinctly summarized the very essence of customer focus in action with her description of Colliers' approach: "We regularly ask ourselves, 'What more might our clients need? How can we help get them there?'"

Learn more about the successful strategies bringing customer relationships to life at Colliers International, Cargill, Choice Hotels, and other high-performance organizations in i4cp's The Customer-Focused Organization: How Alignment, Advocacy, Data, and Technology Drive High-Performance.