House of the Customer

This is the first book review I’m writing since completing my initial top ten list of my favorite business books. You could say that this is my Spinal Tap pick, leaving room to turn up the music even louder and go to 11 (sorry to those of you that haven’t seen the movie).

I picked House of the Customer for my next review because it’s not only a great book, but it’s also by Greg Kihlstrom, the founder of GK5A, one of my strategic partners for JourneySpark Consulting. Greg was also the cofounder of Carousel30 and Digics prior to launching GK5A. He’s worked with some of the world’s leading brands as an advisor on data-driven marketing and digital transformation, including Adidas, Coca-Cola, FedEx, HP, Marriott, Starbucks, MTV, and Toyota. 

You may have seen some of the videos, blogs, and articles I’ve done with Greg.  You may also have listened to the podcast I did with him recently for The Agile Brand with Greg Kihlström, focused on way to drive customer lifetime value.

As you read on, you’ll see how well his work aligns with the themes from other books I’ve covered so far. I hope reading the book sparks as many great ideas for you as it did for me!

House of the Customer is Greg’s eleventh book. It’s part of a trio on CX. The first in the series, The Center of Experience, focuses on how to set up a center of excellence for both customer and employee experience. The second in the series, Meaningful Measurement of the Customer Experience, focuses on how to get beyond high-level approaches like net promoter score (NPS) and dive deeper into the specific drivers of business outcomes and customer lifetime value.  In this final book in the trio, Greg uses the metaphor of a house to describe how leading companies can transform their CX and realize a higher return on investment for all their investments in CX across the enterprise. Greg uses the metaphor to not only describe the components of the house, but also how the way the house is designed and built helps unlock the greatest impact while managing the budget to avoid cost overruns. Given the high failure rate of many transformation programs, this is a fitting metaphor, indeed!

The book is broken down into three parts. The first part is focused on the “why”, providing the rationale for a more holistic approach to CX that integrates across disciplines from strategy to marketing to sales to operations to customer service to IT. Part 2 details the components of the House of the Customer one by one. The foundation is your Customer-Centric Culture. The front porch is your Customer Relationships. The 5 pillars of your house are your Business Drivers; Understanding the Customer; Serving the Customer; Listening to the Customer; and Business Outcomes. The roof is Your Processes & Systems. Part 3 explores the “how”, including pragmatic advice on getting started, change management, and measurement.

Why focus on CX? According to a 2017 study from Gartner that Greg cites, more than two-thirds of marketers responsible for CX said their companies compete on CX. Getting CX right is critical to their company’s North Star vision which helps guide investments and reinforces employees’ connection to the company purpose and brand strategy. In part 1 of the book, Greg calls out the importance of a data-driven approach that aims for true personalization versus managing by segments. He emphasizes the need for customer lifetime value (CLV) as a way of measuring progress against your vision and an agile approach to driving continuous experimentation. To get ahead of disruption and stay focused on what customers value, he argues that we shouldn’t ever treat CX as “set it and forget it,” but need to reimagine our businesses over time. I couldn’t agree more! That’s why I included The Lean Startup, The Adaptive Enterprise, The Infinite Game, and The Art of Ideas among my top ten business books. I also agree with Barry Padgett, CEO of Amperity, who wrote the foreword to House of the Customer, that “figuring out what the customer wants is hard, and organizing a company to be dynamic and responsive to that demand is even harder.” Like these other books, House of the Customer emphasizes the need to generate insights that support continuous improvement across the enterprise, not just in marketing, to realize your North Star vision.

One addition I’d like to suggest you make to your house to make your North Star vision even stronger is to pay special attention to unconscious thought and emotion, in addition to building a data-driven approach and culture of experimentation. This is a central theme for the Reimagining Insights blog series I’m collaborating on with Lou Carbone, author of Clued In, another book in my top ten series, and another strategic partner for JourneySpark Consulting. Uncovering the deep metaphors that customers’ use in their mental models for how they interact with your brand, together with prioritizing the emotions you’d like to reinforce along the customer journey, allows you to develop a more powerful North Star vision to guide your CX investments. It also allows you to track congruence of the actual customer experience with your vision, leveraging AI-driven approaches to mine the volumes of unstructured data along the customer journey to see if you are evoking the emotions you prioritized in the “emotional motif” linked to your North Star vision.

In part 2 of the book, where he gives a tour of the house, Greg starts off focused on the importance of leadership experience in the section on Customer-Centric culture. He lays out how organizations that have a “Customer-First, Employee-Driven” mindset are best positioned to realize their North Star visions. Greg discusses how important the way you train and empower your employees is so that they can make better decisions themselves and fuel a continuous improvement cycle, while delivering exceptional service to your customers. He calls out how “great leaders understand this and go beyond the perfunctory first few weeks of work where employees are bombarded with videos and training, then left to sink or swim.” This was the central thesis in my article in strategy + business, ROX^3, Boosting Returns on Leadership, Customer and Employee Experience. It’s also a key theme in my Reimagining Insights series with Lou, where we write about how you can engage your leaders, managers, and frontline employees to be more “clue conscious” as a way to reinforce a more customer-driven culture.

Greg goes into great depth in part 2 of the book on what it takes to create a more data-driven approach to CX. He explains key enablers to gather first party data and put in place a more agile approach to optimizing not only your paid media but all the content-based experiences along the customer journey. He puts Serving the Customer as the central pillar in the house. In his words, “when we serve the customer effectively, we are achieving the goal of providing the right content or action, at the right time, on the right channel, to a customer that is ready and willing to engage with it… The ideal scenario is more than a reactive, trigger-based marketing messaging strategy; it’s a proactive, next-best action approach. This means we have a more strategic, customer-journey mindset focused on growing loyalty rather than tactical short-term marketing automation.” For more on these concepts, I highly suggest subscribing to Greg’s podcast, The Agile Brand.

The final section of the book reinforces the importance of paying attention to how you build the house, addressing People, Processes, and Platforms in turn. The People section focuses on key principles of change management and how you can apply them. This is something that Greg and I also address in the third part of our blog series, Are we Really Ready for an AI-Driven Customer Experience (you can also find a set of video discussions about these blogs here). In the chapter on Process, Greg focuses on the importance of agility for your content creation and omnichannel personalization investments. Finally, in the Platforms chapter, Greg covers how technology can enable the data collection, CX use cases, and measurement that power your CX. He discusses the trade-offs for build vs. buy decisions, and how a hybrid, “composable” approach that fits between larger monolithic platforms and a build-it-yourself approach often makes the most sense.

I trust you’ll agree that the house metaphor works well to bring together so many powerful themes in one book. There are so many rich layers to this metaphor that Greg uses. By welcoming customers into our house, we are building a shared community around the brand and reinforcing a stronger emotional bond with the customer. Just like a house, the brand should be built to withstand future shocks, though we should be open to continuously looking to make changes. The house needs all the right rooms that are individually well designed while also fitting together harmoniously. 

I’m looking forward to your own thoughts about this book. Please add them to the comments or DM me if you’d like to set up time to chat with me and Greg about whatever most sparks your interest!

Stay tuned for my next book review of The Catalyst by Jonah Berger, which will dive deeper into change management, both for how you engage your customers and your organization.