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When speaking about Customer Journey Management, Outside-In and Inside-Out views are often mentioned. But what do these views mean and should you use one of them or can you combine them?

What does Inside-Out mean?

The traditional Inside-Out-view on processes, strategies and communications means that you will decide from your company’s perspective. The basis is that all the skills and the information necessary for success are within your company (mainly: your employees and your business intelligence). All systems, processes and products are aligned to the Inside-Out-approach. The company comes first. This also means that the needs of the company come first (what is best for the company?). Inside-Out develops products and services first and only then tries to find out how to make them attractive for customers. Advantages:
  • Strengths within the company get recognized and can be used for profit.
  • All internal resources will be used efficiently.
  • Costs are being continuously optimized.
Disadvantages:
  • Market changes will be recognized too seldom and too late.
  • Cost savings can result in negative customer experiences.
  • Products and services do not represent customer needs.

What does Outside-In mean?

Outside-In puts the focus on the customers and their well-being which always comes first. This means, that all processes, strategies and systems have to be aligned to the well-being of the customer. Companies with Outside-In-views measure their success by understanding and taking into account customers’ needs. The customer view is being prioritized and it is used to make strategic decisions (what is best for the customers?). Outside-In bases product and service ideas on the market. Development and production are closely tied to existing customer needs. Advantages:
  • Products and services are directly tied to customer needs.
  • Customer communication is specifically developed for the customer’s interests.
  • Companies can position themselves on the market long-term, since they are always prepared for changes in their customer behavior’s and demands.
Disadvantages:
  • Implementing customer centricity within a company can be costly and resource-intensive.
  • Outside-In also needs a cultural change within the company.
  • Since Outside-In is a long-term solution for success, it can take time in certain areas to show.

What’s best for a company?

Generally, both views have a reason. It’s not detrimental to believe in your company and your employees and to base decisions on the well-being of your company. However, Inside-Out can result in short-term results that bring long-term disadvantages. If you ignore your customers’ needs  and don’t look “outside” at trends and requirements, you will risk market-instability.

Inside-Out can ruin customer experiences

If a company optimizes processes and distributes resources only according to Inside-Out, those changes are most likely to reduce cost and gain efficiency. However, from a customer-centric view, this can also mean that processes will get worse. If you “save” money by removing a contact option for your customer support, you will limit your customer’s ability to choose. If you exchange a good-looking product packing with a cheaper, blander look, it might reflect negatively on you and makes you seem “cheap”. Inside-Out can therefore reduce the quality of your products, services and the quality of your customer support which in turn diminishes the quality of your customer journeys.

It takes Two

A company that is customer-centric doesn’t need to fully let-go of an Inside-Out-view. It might even be of use to include both perspectives when it comes to decision making. However, for this combination, most companies most likely need to implement customer centricity in the first place. Outside-In requires companies to measure customer requirements and trends to anticipate market changes. It is necessary to take a broader look outside of your own company walls. The digital transformation is changing the speed at which changes on the market occur. Customers don’t just interact with one company. Every day, they interact with numerous digital and analog offers. They see what is possible by using innovative, individual and easy services and processes. They get used to a customer experience that puts their needs first. It is all the more difficult, to survive on a market as a company that rather puts itself first. In short: you lose the connection to your customers. How customer-centric are companies and what can they do to implement Customer Journey Management and put their customer’s needs first? Find out in our market study.
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