Customer Centricity is MORE than Customer Experience

16
671 views

Share on LinkedIn

Recently, I’ve been talking with clients about a critical, albeit subtle distinction – so I thought I would share it with you.

Frequently, you’ll hear these two phrases used rather interchangeably. The first is customer-centricity, and the other is customer experience. From my vantage point, the latter phrase (customer experience) is a subset of the former (customer-centricity).

I think of it like this. Customer-centricity is a commitment or a strategy to assure the success of your customer. Whereas, customer experience is a set of customer perceptions forged across all their interactions with your brand.

Leaders at brands committed to customer-centric outcomes typically seek to demonstrate that commitment by interacting with the customer in ways that favorably affect their customers’ perceptions. That said, many customer-centric actions happen outside the view of customers and, as such, may not even reach the awareness of the customer.

Customer-Centric Even If Customers Don’t Know

It’s been said that “Integrity is what you do when no one is watching.” Similarly, customer-centricity reflects all the things you do whether or not the customer notices. I remember a discussion early on with a Starbucks financial officer. We talked about a seemingly minor decision that had a substantial cost impact on the brand but had only a subtle impact on a subset of customer perceptions. That decision involved toilet paper!

To understand the significance of Starbucks’ toilet paper decision, please indulge me to outline Starbucks customer-centric strategy and unfortunately offer a bit of bathroom banter. Leaders at Starbucks, in part, define customer success as offering affordable luxury to customers wherever the customer finds the brand (online, voice, mobile, and in-store). This objective is based on the reality that not everyone can treat themselves to a spa day at the Ritz-Carlton. But most people can nurture themselves by swinging into a Starbucks to sit in a comfortable chair and savor their favorite non-alcoholic beverage. In-store customer success occurs, in part, when a Starbucks customer leaves feeling affordably nurtured.

Many things go into achieving that customer-centric outcome (training, lighting, products, store design, etc.). Some of the decisions involved in this customer-centric strategy are extremely obvious to customers and others are not. Truly customer-centric brands make decisions that drive customer success even if the impact of those decisions are imperceptible or faintly perceived by the customer during their journey with the brand. Two-ply vs. single-ply toilet paper is one such decision that is in keeping with Starbucks customer-centric focus although only mildly perceptible to a segment of Starbucks consumers.

Taking Short Cuts

Forgive me for this mini-refresher on toilet paper, but it’s needed for context. As the description implies, single-ply toilet paper is a single layer of paper while double-ply is made from two layers of paper. People who research such things suggest that people do not compensate with single-ply paper by using twice as much of it. In fact, a Reddit researcher suggests single-ply is at least 22% more efficient and yes cheaper than double-ply!

If you multiply the cost efficiency of single-ply toilet paper times annual toilet paper consumption across every Starbucks around the world, you could generate big savings with likely minimal impact on customer perceptions of the touchpoint. To minimize that impact further, you can subtract out a lot of customers who never use toilet paper in a Starbucks and make the case that “single-ply” is the future! Financial officers at less customer-centric brands might say, “Let’s go with single-ply. The toilet paper touchpoint is a small part of the customer journey.” A customer-centric brand like Starbucks says let’s stay with double-ply.

On a More Serious Note

While Starbucks toilet paper is my somewhat light-hearted example of customer-centricity in action, recent choices made by another client should bring home the distinction far more powerfully. This example demonstrating customer centricity involves doing the right thing for your customer even if that potentially means short-term consequences for your sales.

This month is a huge month for Godiva chocolates. Valentine’s Day is a pinnacle sales driver for the brand. Yet, in Japan Godiva purchased an advertisement discouraging chocolate gifting for Valentine’s Day. As you may know, Japan has a tradition of women being expected to give “obligation chocolate” to male co-workers on Valentine’s Day. There is a reciprocal tradition of men giving chocolate to female colleagues about a month later. In the advertisement, the head of Godiva Japan essentially said “chocolate is for pleasure” and shouldn’t be a pressured expectation. WOW, customer-centric strategy without attempting to positively improve the customer experience online or instore, except to possibly reduce a stress driver for purchase!

Taking a Stand for the Customer

Customer centricity is the willingness to stand-up for what is best for your customer. Often but not always, that commitment is realized in perceptual contact points during the customer’s journey with your brand (the customer experience).

How are you defining customer success?

What decisions are you making in keeping with a customer-centric commitment to help your customers achieve that success even if those decisions have short-term consequences on you or fall outside the perceptual experience of your customers?

16 COMMENTS

  1. Perhaps a broader landscape way of thinking about enterprise customer-centricity is that it encompasses culture, processes and people (employees and suppliers), with the collective goal of optimizing customer experience and value delivery. Because customer and employee behavior are so closely linked, my recommendation is to take enterprise culture and processes up a notch, to stakeholder-centricity, focused on optimized EX and CX.

  2. Although I am not one to advocate for “potty talk” I have to say that I love the toilet paper example!! I agree completely that it demonstrates the true integrity of the organizational commitment to the customers experience throughout their interactions with the brand. Someone once said too that, the devil is in the details, and this is a detail when not correctly attended to could very well compromise the integrity of Starbucks commitment to affordable luxury. One example from my company that aligns more closely with your Godiva chocolates example is, that when prospects contact our leasing offices in search of a new apartment home, our Associates are trained to actually HELP them progress in their search for information. What I mean is that sometimes prospects are attracted to our apartment communities because of the beautiful styling of the buildings or the amenities but after learning the price, are unable to afford the rent. When this happens, our Associates are trained to make a referral to another location, likely not affiliated with JC Hart, that would accommodate their needs based one what they have already learned from the prospect. This strategy, although not yielding us a new lease (customer), is the right thing to do and helps that person feel good about their experience with our brand because we still helped them move toward their end goal of finding a new apartment home.

  3. This is great, Joseph! And, a perfect example of customer centricity at its finest! I also liked the Godiva example because it represents more of an integrity issue, not just a functional one like toilet paper. As you have written in all your best-selling books, great companies like Starbucks, Baptist Hospital, Ritz-Carlton, Mercedes-Benz, etc. capture the advocacy of their customers by being an advocate for their customers, even through the subtle decisions and actions customers may never notice. Great companies have brands that represent a bundle of compelling values lived everyday, not just a bunch of fancy words on the employee break room wall. Keep up the thoughtful and captivating manner you communicate important concepts.

  4. Making the distinction between customer-centeredness and customer experience is, indeed, important. Unfortunately, this article doesn’t go far enough to address the difference.

    Simply put, customer experience is transactional; customer-centeredness is cultural. To be transactional means we focus on what happens when the customer encounters and uses a specific product. That product could be a cup of coffee or sheets of toilet paper. The Starbucks “strategy” briefly described in the article is a classic case of treating transactional relationships as if they represent a cultural framework for all behavior and its attendant assumptions, priorities, and measures of success.

    As I discuss in my fourth book, Mastering Excellence, there are several simple tests of whether or not an organization is customer-centered, including the following:
    • Are customers unambiguously identified? The vast majority of organizations focus only on customers external to it. Aren’t employees recipients of products produced by others within the enterprise? If so, they are customers of specific products they receive. The customer-centered organization has articulated practices for uncovering, translating, measuring, delivering and improving products produced and received by its employees. The leader of one HR organization decided to model this behavior. She and her team identified over 170 products produced by their department, used defined criteria to prioritize them, identified who the end-users were for the most important products, then began to systematically improve and innovate. One discovery that shocked them was that several products were not wanted and were not useful to any users. They were stopped being produced. That customer-centered disease then spread to every other department organically. Winning the away games is improved when we demonstrate we can win the home games.
    • Are customers differentiated by the roles they play with the product? There are three roles a customer can play: end-user, broker and fixer. Organizations commonly confuse brokers with end-users. This empowers those who merely transfer the product to the end-user, weakening the power of and focus on end-users. To illustrate with the toilet paper example, it is more likely the buyers of it have more sway on whether or not it is one-sided or two-sided than the end-users. The automakers in Detroit have historically colluded with dealers to the disadvantage of drivers and passengers. There is plenty of evidence, including the fact they have lobbied Michigan legislators to prohibitprospective buyers of Tesla vehicles from buying those EVs directly from Tesla. Sad for them, they don’t seem to recognize folks are easily able to cross state lines and get what they want. The end-user generally wins in the long run.
    • Does the enterprise have a written customer satisfaction policy? It probably has policies for a myriad of other things. If customer satisfaction is a priority, as it is for a truly customer-centered organization, there should be a policy to deploy that core value. Sadly, such a policy is more often than not a missing plank in the bridge to excellence.

    For anyone wanting to know what leadership can do to transform their current culture into one with stronger customer-centeredness, it may be helpful to explore the six change levers discussed in chapter six of the above book.

  5. Gabrielle, thanks for getting the “tongue in cheek” reference to potty talk! Zappos also has a refer to competitor process (when the customer’s product is not in inventory). I write about it in my book The Zappos Experience. Most important, Gabrielle thank you for thoughtfully adding to this thread!

  6. Robin your book trove and thoughtful comments about culture over transaction are essential expansions on the concept of centricity. It is in keeping with CXPA’s core competencies of customer experience organizations (but then again even the organization name focuses on the experience).

  7. Great discussion. Customer centricity/experience/loyalty/relationship/value are all fuzzy terms that can be defined as broadly — or narrowly — as people want.

    Many in the CX world define the term so broadly that it’s essentially the same as customer-centricity. But the same could be said of CRM which, depending on who you talk to, is either technology to install or a customer-centric business strategy.

    I would tend to agree with Joseph that as CX is currently practiced, customer-centricity gets to the organizational culture. I’ve found that 5 “habits” (routine, engrained practices) differentiate better performing firms: Listen, Think, Empower, Create, and Delight.

    Joseph said it more succinctly: “Customer-centricity is a commitment or a strategy to assure the success of your customer. ”

    Yes! The point is to deliver what customers value. Actually, I’m beginning to like the term “customer success management” because it gets to the heart of what customer-centric companies strive to do.

    What I would add is that if an organization is truly committed to a strategy, then that commitment must be evident in the ACTIONS (behaviors) of the people, from CEO to frontline. Many if not most employees don’t directly impact customers or their perceptions, but their actions still matter.

    All that said, what matters is what companies do, not what they call it. CX is the trendy term now, but it’s being applied to just about any initiative that has a whiff of customers, which is one reason I’m finding low success rates with “CX” initiatives (see http://customerthink.com/an-inconvenient-truth-93-of-customer-experience-initiatives-are-failing/).

  8. Why are we so afraid of making customer value and value creation a key area for success and customer centricity?
    Customer success association states the goal of Customer success is to build more proven value for your customer and your company….isn;t this customer value
    Look at CXPA’s website for member benefits, and of the ten reasons for becoming a m, not one says you will get a great experience. Is great member experience not a reason for joining CXPA?
    Let’s get back to fundamentals if we want to be customer-centric.

  9. Bob, excellent points and your link and its summary of Hagen’s findings are highly relevant. However, I think the language we use requires much closer scrutiny for how it can help or hurt our efforts; it absolutely matters. There are two illustrations that can help understand the language-execution connection.

    When our founding fathers said “all men are created equal” they didn’t mean what we interpret it as meaning today. Ambiguity is one of the biggest barriers to excellence faced by leaders. In this case, clarification required some constitutional amendments to add clarity, including women, non-property owners and non-whites as “men” in the most generic and inclusive form possible. Did that issue of “what they call it” matter? You bet. And we are still fighting the battle on how to execute on the stated founding fathers’ intent many decades later.

    The quality management field is currently struggling to address the issue of language and culture. The American Society for Quality has conducted research for several years, revealing several discoveries relevant to this discussion. One of them in that there is little consensus on what “quality” or “customer” means within many organizations. How can we improve something that does not have an agreed upon definition? In my own work in healthcare, I have found that only a tiny percent of leaders have a written definition for “good health”, though this is the top desired outcome wanted by healthcare customers. In the absence of an unambiguous definition, how likely is it that we measure it? That we have numerical goals for improvement? Not likely.

    In the quality field, it is not uncommon to find that the ROI on initiatives is poorly measured. Whether we would get more buy-in from senior leaders if we did that is a hotly contested matter of opinion. Some would agree quality, customer satisfaction and employee engagement are worth improving, even when not measured. In my 30-year career, I have found all connections made to ROI are a big plus. They encourage deployment and maintenance of core values.

    So I would argue that language matters. Reducing ambiguity increases the likelihood we will formulate effective strategies and measure the success of their deployment.

  10. Bob I am in London today consulting in the B-B-B space. I am working with the middle B. All we talked about was delivering value for their business customer and working with the OEM (the first B) to help them do that. Customer success is customer value delivery. I talk about innovation as systemic listening and solution creation to deliver value. That is, and should be, the business of all.

    BTW, Bob thank you for this forum where value creation in community discussion reigns supreme.

  11. Joseph, thanks for your comment and for your post which stimulated a helpful discussion. I founded CustomerThink 20 years ago to help business people figure this stuff out. Content with discussions like this help us deliver on that mission.

    Robin, I think you’re right that ambiguity is the wrench in the gears of customer centricity, customer experience, and more.

    Unfortunately, when a term becomes “hot” the proponents can’t resist defining it as vaguely and broadly as possible. This leads to a “theory of everything” problem and inevitably a backlash when reality sets in. (See http://customerthink.com/has-cxm-jumped-the-shark-trying-to-be-the-theory-of-everything/.)

    Then, on to the next buzzword!

    I have little hope that the CX industry will rein itself in, but what IS possible is for business executives to precisely define what they are doing within their OWN companies. Answering simple questions like:
    1. How will this add value to the customer?
    2. How will this customer value drive company value?
    3. How will we measure progress and success?
    4. Will this give us a competitive edge?

    Companies that decide to “be more customer-centric” or “improve customer experiences” or even “increase customer value” have little chance of success if they don’t clearly define what they mean.

  12. Robin, brilliant points about the needed language precision. Also, I have frequently dealt with the challenges of defining that simple word “customer” – particularly in examples where business partners are integral to end user/consumer success.

LEAVE A REPLY

Please enter your comment!
Please enter your name here