The NDIS: Why 'Customer-Centricity' Counts
10 July 2018 at 3:21 pm
The NDIS is presenting a huge change to the disability services ecosystem. So significant is it that the struggle to adapt and deliver at NDIS price points is pushing many organisations to decide whether they can continue to provide the same services, writes Diana Ferner, a consulting team principal with Social Ventures Australia.
Some have taken the difficult decision to close services, while others are choosing to deliver at a monetary loss, subsidising through other operations or fundraising.
In this difficult environment, taking a customer-centric approach to redesigning your operating model may help organisations not only survive the challenging transition to NDIS, but also to embed a sustainable operating model that will enable their clients to thrive.
Examples in the corporate sector show by focusing on the right customers and taking a customer-centric lens, revenue can increase by as much as 20-25 per cent and profit margins by 10-15 per cent.
Social Ventures Australia (SVA) Consulting’s own work has helped disability service providers identify new paths to sustainability, all while renewing and reinvigorating a focus on customers.
Drawing on this experience, we have distilled a process for building a customer-centric operating model.
We share an introduction to this framework here in the hope it will help organisations throughout the disability services ecosystem – and the social sector more broadly – think clearly about the options available to them and their clients.
A more detailed explanation of this framework with example case studies can be found in the SVA Quarterly.
So what do we mean by customer-centricity?
Customer-centricity – an overview
In our view, building a customer-centric organisation requires taking the customer perspective into the very architecture of an organisation. This includes structure, processes, and embedding a loop of continuous feedback and improvement.
It’s about shifting an organisation’s primary lens from what services it provides (e.g. assistance with daily living tasks) to who its target customers are and what they are trying to solve for (e.g. young adults looking to live on their own and become more independent).
While the concept may sound simple, the implications are profound.
Why does customer-centricity matter?
Many disability providers are redesigning their services to ensure they can deliver within the NDIS price guides. However, without considering who their target customer is and what they need from services, organisations risk spending time, money, and resources making changes that are not fit-for-purpose or fit-for-future.
Potential risks of designing a generic service without a target customer in mind include trying to be everything to everyone (and thus being compelling to no one); or targeting a segment for which financial sustainability depends on scale, despite limited growth potential.
Building a customer-centric operating model
There are six key steps to building a customer-centric operating model:
1. Define your target customer segment
Just as leisure travellers look for different experiences when they travel, so customers of disability services are starting to look for different experiences from their providers. Already, we have seen the emergence of new providers and services targeting specific segments of the market.
No organisation can be everything to everyone and do it well. So, the first step is to get clear on your target customers. Only then is it possible to assess and improve how your organisation engages with and delivers services to them.
Reflect honestly on what your organisation is uniquely good at. Who is your organisation positioned to solve for a real need for better than anyone else?
2. Map the current customer journey
Once a target customer segment has been identified, the next step is to understand their end-to-end customer journey. You must engage customers directly as they are the best source of information, though front-line staff will also offer a useful perspective.
Below is an example of a high-level customer journey.
3. Identify key highlights and frustrations
The next step is to identify key highlights and frustrations. From the perspective of your customer, distinguish highlights to preserve and identify frustrations that need to be solved.
Consider what matters most to your target customer segment. For example, if your target customer segment is people with a disability who know what they want and just want it provided, a lengthy on-boarding process is likely to frustrate them and be financially unsustainable for you.
4. Problem-solve for frustrations
We encourage you to bring together subject matter expertise from across the business – including representatives from HR, finance, IT, marketing, and other areas – to consider your entire operating model and solve for customer frustrations.
It is typically not an organisation’s intention to frustrate its customers, but rather the organic result of decisions that made sense from an organisation’s perspective but when taken collectively, are frustrating for customers.
5. Refine target segment if needed
It is worth pausing and reflecting at this point. Is your organisation uniquely able to deliver value for your target customers as you initially thought? Is that segment still financially attractive in the new operating model? If not, you may need to revisit your target customer segment to ensure you do find one that is well-suited to your organisation.
6. Build capabilities for continuous feedback and improvement
It is not enough to do this exercise once. As the market for disability services matures, customers will become more sophisticated about what they want, and customer segments and journeys will evolve. You will need to regularly review your target customer segment and monitor, manage, and optimise the health of the customer journey, and build capabilities to do so.
To survive, disability service providers must become more customer-centric. Doing so not only supports long-term financial sustainability, but also creates real choice and control for people with disability.
About the author: Diana Ferner is a principal on the consulting team at Social Ventures Australia (SVA). A more detailed explanation of this framework with example case studies was recently published in the SVA Quarterly.