Customer-Centricity: Movement or Myth?

This is the second of several articles focusing on findings in Customers Say What Companies Don’t Want To Hear, a study by Dick Lee and David J. Mangen, Ph.D.

"Customer-centricity" is a serious contender for the most gummed-to-death business term of the new century. Everything is customer-centric these days. Even toilet seats. But what the hell does it mean … "customer-centricity?"

One good way to define this chewed-over term might be to define what it’s not. And what better source of insight about what’s not customer-centric than customers themselves? In our recent research study, Customers Say What Companies Don’t Want To Hear (May 2006), my research partner David J. Mangen, Ph.D., and I tacked on two questions at the end, asking participants to name the most and least customer-centric companies they knew—and to add some comments about each.

Reading through the verbatim remarks attached to the nominees for least customer-centric was really interesting—for a while. But then things got repetitive. The company names changed, but the negative behaviors remained the same. And these negatively perceived, shared behaviors were:

1. Lack of respect for customers
2. Ill-trained and indifferent employees
3. Un-empowered employees.

So, if we flip the coin and say that companies that are customer centric a) respect customers as part of company culture; b) thoroughly train and motivate employees; and c) empower customer-facing employees to fix stuff when it goes wrong, do we have a working definition of customer-centricity? I suspect we do. And checking this definition against how customers participating in our study define what motivates them to buy validates this definition—both in "high-touch" and in "lower-touch" industries.

By a significant margin, customers rate a group of "customer focus" behaviors by companies as their primary source of buying motivation, almost regardless of industry. In fact, "empowering employees" scored second highest in purchase influence among all individual seller behaviors, trailing only "providing quality products."

Movement or myth
With that in mind, let’s consider the question again: Is there a customer-centricity movement under way? Or is it a myth, with a whole lot of companies trying sneak up on customers to pick their pockets?

The answer is "yes."

Yes, we do have a customer-centric movement going on—among customers. As we describe in the study, irresistible global market forces are driving a gradual transition from past decades of sellers’ markets to future decades of buyers’ markets. As a result, customers are acting more empowered and emboldened and are continually upping their expectations of companies. More than just a "movement," this is a large rock rumbling downhill at increasing speed that imperils anything in its way.

And simultaneously, yes, we do have an increasing number of companies spreading more and more bovine waste matter about being "customer-centric," when all they want is a hand in every customer pocket, plus one in the purse. This charade is fooling fewer and fewer customers as time passes, but companies are as good as trapped in this mode, because the alternative—responding to customers, instead of trying to lead them to do companies’ bidding—is too odious to bear.

So yes, we have both movement and myth.

Obviously, we can’t reconcile these two sets of events. One or the other has to prevail, or we can expect to see rising tensions between buyers and sellers that, if allowed to reach the boiling point, will lead to diminishing customer loyalty and ruthless price pressure on business from customers who don’t give a damn whether companies can maintain high enough prices to maintain their business. We’ve already seen this in the airline industry, and it’s a scary prospect for business.

Getting back
The bottom line is that customers are unlikely to budge—and instead are likely to take punitive measures against customer-offending companies by taking their business elsewhere or, in some instances, through regulation, taxation or group actions such as boycotts. As we described in interpreting our study results, customers have already put some companies—particularly those such as Ford, GM and several airlines, where a significant percentage of customers appear prepared to forsake them as "beyond redemption"—at considerable risk.

So what are companies doing in response?

Unfortunately, the majority of companies are clueless when it comes to responding appropriately to empowered customers. But beyond that, the majority of the business community is still holding out for the change toward customer empowerment to reverse itself. Yah sure, global competition is about to end; the Baby Boomer generation is ready to start walking backward across the timeline; we’re about to turn our backs on productivity enhancements because they’re too damned disruptive; and we’re all going to put our head in the sand and pretend that the last 10 years never happened.

Fantasy land, but lots of companies are still living there.

More positively, some companies see the need to change with the times. Unfortunately, most are responding by providing customer self-help, developing 360-degree views of customers and cross-selling more aggressively—changes that customers are neutral to negative about—while they ignore the employee empowerment and honest and respectful communication that customers really want.

The good news is that a small but growing minority of companies have seen or are seeing the light, without being blinded by it. 3M Company and Nordstrom have been customer-centric forever. Southwest Airlines and Toyota caught on years ago. More recently, Boeing, GE, Hilton and Marriott are making customer-friendly noises. Not to mention young companies such as Amazon.com and Google that got it right from the start.

But are there enough of these companies to qualify as a momentum-building movement toward customer-centricity on the company side? I hope so, but I believe not. And that means customers will wind up dragging a bunch more, many of them kicking and screaming, over the threshold until the business community gets it.

Sure, buyer-seller tension will always exist. But within that framework, companies have to learn to do business the customers’ way. It’s just too bad that it’s likely to be more of a "forced march" than a self-sustaining movement. You betcha.