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Annette Franz

Customer Care

Outside-In vs. Inside-Out Thinking

Is it all about you?

Published: Tuesday, August 18, 2015 - 09:56

In the world of customer experience, what’s the difference between outside-in and inside-out?

Inside-out thinking means your focus is on processes, systems, tools, and products that are designed and implemented based on internal thinking and intuition. The customer’s needs, jobs, and perspectives do not play a part in this type of thinking; they aren’t taken into consideration. You make decisions because you think it’s what’s best for the business—not for customers. Or you think you know what’s best for customers.

On the other hand, outside-in thinking means that you look at your business from the customer’s perspective and subsequently design processes, tools, and products and make decisions based on what’s best for the customer and what meets the customer’s needs. You make decisions because you know it’s what’s best for your customers. Why? Because you listen to them, and you understand them and the jobs they are trying to do.

It might be inside-out thinking when there’s a conscious decision to make process, policy, people, systems, or other changes that:
1. Don’t improve the customer experience at the same time
2. Are about maximizing shareholder returns, not about benefits for the customer
3. Improve internal efficiencies, but to the detriment of customer interactions
4. Are cost-cutting measures that also negatively affect the customer experience
5. Might be the wrong process, policy, people, or systems to change

By contrast, outside-in thinking flips each of those points on its head. There’s a conscious decision to make process, policy, people, systems, or other changes that:
1. Improve the customer experience at the same time
2. Are about maximizing benefits for the customer
3. Improve internal efficiencies known to be pain points when executing customer interactions
4. Are cost-cutting measures that significantly improve the customer experience
5. Are the right process, policy, people, or systems because you’ve listened to customer feedback and know how customers are affected

It’s clear that outside-in thinking is the way to go. It leads to a number of things, none of which you’ll get by making decisions that are not based on what’s best for your customers:
• Reduced complaints
• Increased satisfaction
• Increased referrals
• Increased repeat purchases
• Improved ease of doing business
• Fewer lost customers

These then translate to reduced costs and increased revenue for the business.

How can we ensure that we’re operating in an outside-in manner? Here are some tips:
Understand customers and what they are trying to do
• Use that understanding to develop products for customers that solve their problems and help them do what they are trying to do
• Listen to customers at all key touch points
Close the loop with customers on their feedback
• Act on what you hear
• Share the feedback and ensure it’s used throughout the organization to make decisions and to design the best experience for your customers
Do right by the customer; ask, “Is this decision what’s best for the customer?”
• Reduce customer effort rather than making the experience convoluted and confusing
• Save a seat in the room (à la Jeff Bezos’ empty chair) for the customer/customer’s voice
Map customer journeys and ensure that all employees—frontline and back office—have a clear line of sight into how they affect the customer experience
• Talk about customers and what they are saying

The customer’s voice needs to be incorporated into all decisions, design, and development. Weave the customer throughout your organization’s DNA and watch what happens.

“When you’re trying to make an important decision, and you’re sort of divided on the issue, ask yourself: If the customer were here, what would she say?”
—Dharmesh Shah, CTO of Hubspot

First published Aug. 11, 2015, on the CX Journey blog.

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About The Author

Annette Franz’s picture

Annette Franz

Annette Franz, CCXP is founder and CEO of CX Journey Inc. She’s got 25 years of experience in both helping companies understand their employees and customers and identifying what drives retention, satisfaction, engagement, and the overall experience – so that, together, we can design a better experience for all constituents. She's an author (she wrote the book on customer understanding!), a speaker, and a customer experience thought leader and influencer. She serves as Vice Chairwoman on the Board of Directors of the Customer Experience Professionals Association (CXPA), is an official member of the Forbes Coaches Council, and is an Advisory Board member for CX@Rutgers.