Great companies today cut through the complexity and confusion inherent in large businesses and get straight to what matters – the customer. They are more aligned, responsive, and successful in the market than their flat-footed competitors, as a result.
But the rare few customer-fixated organizations do something even more dramatic – they blow up expectations, create new business models, and lock onto customers in ways that leave competitors demoralized and confused.
This is the tale of two customer-focused organizations: one that is consistently admirable and one that has demolished expectations for what’s possible, setting the bar for success at an entirely new level.
The difference between them, I believe, comes down to one word: Feisty.
The Purple Promise
FedEx is purpose-driven, innovative, and customer-focused. They also succeed in the market far more often than they falter.
From the beginning, FedEx made customer satisfaction the thrust of its value proposition. It started with a promise: Do whatever it takes to satisfy our customers.
That orientation made FedEx special. FedEx didn’t just want to compete for customers, they wanted to know them. FedEx didn’t rely on anecdotal information alone, but was also very big on customer data and rigorous performance measures.
FedEx had good business reasons to be customer focused. The company saw that a 1% increase in customer loyalty to FedEx was equivalent to an additional $100 million in revenue. Accordingly, they focused on building the highest customer loyalty rating in the industry. And they achieved that loyalty by honing in on customer experience. FedEx determined that in every customer interaction there is a moment of truth when FedEx wins or loses an opportunity to build loyalty.
This understanding was not just a branding or marketing exercise; it actually drove FedEx’s strategic innovation and growth. When customers told FedEx they wanted a less expensive, second-day alternative, FedEx created it. When they told FedEx they wanted a ground solution, FedEx added it. The company has constantly evolved its products and services to meet customer needs, and created, adapted, and re-engineered its processes to support those products and services.
But here's the twist. Even with that amazing degree of customer-focus, FedEx may still be vulnerable and there is one main missing ingredient.
Don’t Make Santa Claus Angry
On December 25, 2013, a lot of Amazon customers had a less than Merry Christmas.
Amazon Prime was an amazing life-saving promise to parents around the country. Skip the mall. It doesn’t matter if there’s only a week left until Christmas, put that gift in your Amazon shopping cart and hit the buy button – we’ll get it to you in time.
But Amazon’s distribution partners, which included FedEx, UPS, and USPS, failed to accurately predict and plan for the unexpectedly high volume of orders. So Amazon couldn’t deliver those presents in time for Christmas.
Amazon lost millions in refunds as a result; but, there were more important stakes. Amazon wants to exceed customer expectations at every opportunity and in this instance, Amazon really blew it.
It didn’t matter that it wasn’t solely Amazon’s fault. Amazon knew that’s not how the customer would see it. Instead of launching a marketing or PR campaign to convince customers otherwise, Amazon set out to solve its delivery problem in a more meaningful way. To get started, it shifted some business away from UPS and FedEx toward USPS, began to build distribution centers closer to customers, and got a few of its own trucks to handle moments of overflow.
FedEx and UPS didn’t see that as a significant blow at first. The business loss was minor and they knew how hard it was to build a logistical infrastructure that cost billions annually just to upgrade.
Amazon’s goal wasn’t to beat FedEx and UPS at distribution, it was to meet and exceed customer expectations. To do that, they were willing to do “whatever it takes.”
That was FedEx’s slogan, but Amazon doubled-down on it.
Today over 50% of the US population is within 20 miles of an Amazon fulfillment center; in 2010 that number was only 5%. Amazon also hired Uber drivers, developed a network of its own on-demand gig economy couriers, stored packages in temporary warehouses or borrowed space from competitors, and invested in drone technology.
The Invention Machine
Today, Amazon continues to deliver packages through USPS and through its own distribution infrastructure. It could save a few billion dollars if it stopped using UPS and FedEx entirely but it still partners with those organizations. Why? Because Amazon’s customers don’t really care who delivers their packages, they just want those packages on time, cheap, and hassle free – and Amazon feels the same way. Amazon will work with anyone, even a competitor, to keep their customers happy.
And that’s just one way in which Amazon is playing a completely different game when it comes to its level of customer-focus. Streaming cable. Amazon-produced TV shows. Data storage. College loans. You name it.
It’s called constant invention. Where does Amazon get that drive and capacity? It takes an attitude and behavior engrained in the Amazon culture.
What Feisty Looks Like
When people analyze the success of big customer-focused organizations like Amazon and Salesforce, they tend to focus on the inevitability of vision, strategy, and scale. These are critical conceptual frameworks for a customer-focused organization but they are insufficient for success today.
It is even more important to be feisty and that comes from your culture.
If vision is the head, feisty is the heart. If strategy is about thinking, feisty is about acting. If scale is about process, feisty is about solutions.
Feisty organizations are not calm and detached; they are scrappers and fighters. There are hungry and sometimes even have an air of desperation about them. They may, over the course of time, become arrogant but they never settle or become complacent. They act like underdogs even when they are not.
This mix of attitudes and behaviors is, of course, part of the culture of the organization, but it does not stop with the visionary Founder / CEO. Instead, it is suffused through the leadership and in most of the people – certainly the people who last.
Within feisty organizations, the CEO is inspirational and incredibly demanding. The leadership team is exceptionally competent and capable but focused on helping their people succeed and always willing to get their hands dirty. The people of the organization are committed and feel ownership for the organization but they are do-ers who focus mostly on their own direct responsibilities. They may feel tremendous pressure to perform and achieve results but they also feel tremendously privileged to be part of something amazing and special that brings out their best.