Customer-Centricity the EBay Way

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Ginger Conlon over at Think Customer: The 1to1 Blog has an interesting post about customer centricity at eBay.

Kip Knight, VP of Marketing for eBay North America presented ‘7 Habits of Highly Effective Customer-Centric Companies’ along the lines of Stephen Covey.

The Seven Habits are:

Time
Employees are genuinely excited about spending time with customers.

Management Focus
Top management is committed to customer-centricity.

Organizational Alignment
The entire organisation has to understand and invest in gathering and acting on customer feedback.

Internal Sharing and Communication
Departments share feedback and other customer information.

Minimal Internal Corporate Politics
Knowing and acting on customer feedback must come before executives’ internal agendas.

Well-defined Consumer Target
The company has clear, data-based customer segments, and knows which customers it cares about most and why.

Well-defined Processes
A formal strategy for collecting and acting on customer feedback.

Hardly anyone would argue with the list. It’s just plain common sense. So how do you go about putting the items on the list into practice? Do some items need to be done first and others to follow? How long will it take to put them into practice? And how do you measure your success in developing the Seven Habits? Unfortunately, neither Kip nor Ginger provide any answers to these questions.

A brief look at what we know about each of the Seven Habits shows that each is driven by many factors, that many of the factors are systematically interlinked with each other and that they all take time to develop. For example, we know that employee customer-orientation is driven by the organisation having a ‘service climate’, employees being highly motivated and employees being committed to the organisation. We also know that each of these three factors is driven by organisational socialisation (and many other factors too). So, just to increase employee customer-orientation we have to go to the heart of what makes the organisation, any organisation, a great one to work for. And that’s just the first factor!

Therein lies the problem with this list and all others like it. They are just oil on the water of the churning business sea. They look seductively simple on the surface; how difficult can it be to implement a short list?. In reality, they are fiendishly complex and putting them into practice takes a lot of time, effort and money. But nobody wants to read about hard stuff. Do they? So we get meaningless short lists instead, and without the detailed Users’ Fieldguide that should accompany every one.

What do you think? Is customer-centricity just a matter of checking off boxes on a list? Or is it more like the search for the Holy Grail?

Add a comment and get the conversation going.

Graham Hill
Independent CRM Consultant
Interim CRM Manager

5 COMMENTS

  1. I know people who have worked at eBay, and they tell me it’s a grinder. They expect long hours devoted to the company. I know someone who interviewed for an editing job at eBay, and they warn you that they have a “start-up mentality,” meaning they expect you to be getting in early and staying late.

    Perhaps employees can still do that and like the customers, too, but I hear more that they burn out quickly. It’s all well and good to have a list, but I’m not sure high employee churn is good for customer-centricity.

    Gwynne Young, Managing Editor, CustomerThink

  2. Gwynne

    I have to say that I had heard something similar. A start-up mentality doesn’t have to lead to being too burned-out to be customer-centric, but it can do so very easily in large organisations like eBay.

    Perhaps Seth Godin was right after all.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  3. Graham, you’ve argued elsewhere that sometimes commonsense approaches that make logical sense, aren’t necessarily correct.

    Where is the proof, academic or otherwise, that this list of habits will actually lead to a successful customer-centric business?

    Without that, aren’t we extrapolating from a single data point?

    No disrespect to eBay, but perhaps it’s premature to rush into “implementing” their 7 Habits, and run the fate of those who thought TQM, BPR, etc. all made sense too, but failed to adapt the concepts to their business.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  4. Everyone,

    If we look at customer centricity as something to implement that can be done independent from the main strategy then companies will look at it as a checklist or as a search for the Holy Grail. If it’s treated like TQM, BPR, etc. was, programs implemented without guiding principles focused on overall enterprise goals, then it will suffer a similar fate. Customer centric benefits and activities must be integrated with the other benefits and activities that are designed and developed to make the overall strategy work, creating the “system” Graham talks about. This combined set of benefits and activities really define the company’s value proposition(s).

    I always thought that customer centricity was a “sub-strategy,” guided by a set of principles derived from the main strategy a company developed to define its uniqueness in the marketplace. Companies don’t implement customer centricity just be customer centric; they implement it to make their strategy(ies) work. “Checklists” and other “practices” that EBay et. al. develop are useful as input to an overall set of principles that can used as help in defining the customer centric set of guidelines and principles that companies “pick and choose” from to help them develop the “right” level of centricity for their goals. How well these strategies work depend on how well they are defined and executed.

    If EBay followed this path, then they may be successful in implementing their “list.” But another company can’t just use the list as their “sub-strategy” customer centricity elements with the same implementation process (see Jim Barnes recent blog entry on “Best Practices”). In other words, proof that they work for one company doesn’t mean they won’t work for another, nor will lack of proof mean they won’t work for the company that “invented” the list. Also, there usually isn’t any proof that new, complex strategies will work.

    Any comments to this short answer to a complex question? Where am I off base?

    Jonathan Narducci

    CornerStone Cubed
    Building Customer Powered Value

  5. Bob

    You are right. Commonsense is not always common, nor always sensible.

    The whole point of my post was to suggest that even if the 7 Habits contribute towards customer-centricity, that they must be systematically implemented with the relationships between each other (and other factors) in mind, not mindlessly implemented like a best-practice checklist.

    There is a great deal of evidence that all the individual factors contribute in one way or another towards customer-centricity: The Marketing Science Institute’s study into Market-Orientation (of which customer-centricity is a large, but not the only part) shows clearly that individual employee customer-orientation, management customer-orientation, information-sharing and inter-organisational collaboration all contrbute to profitable customer centricity. Werner Reinartz’s work on customer profitability shows clearly that value-based segmentation contributes to profitable customer centricity. And Thomas Daveport’s work on fact-based business intelligence shows clearly that customer intelligence also contributes to profitable customer centricity.

    As Jonathan points out in his response, the challenge isn’t so much knowing what to do (anybody who has access to the internet and can read can find out for themselves today) but in knowing how to do it.

    Bruce Kogut’s earlier work on capabilities as real options suggests that customer-centric business capabilities (unique combinations of processes, information flows, enabling systems, work routines, motivated staff and other assets & resources that in combination allow a company to create value) exist in capability families that need implementing together to be effective. If you just implement an all singing, all dancing CRM system without upgrading all the other bits at the same time, then you will increase your costs, but you won’t increase value creation.

    Although the capabilities view of customer-centricity is now fairly wide-spread amongst serious CRM practitioners (indeed, I would go as far as to say that any CRM practitioner who doesn’t take a capabilities view is not serious), the identification of related families of capabilities, their implementation sequencing and their managed implementation is still largely work in progress.

    And as Jonathan also points out, the choice as to whether to become a customer-centric company is primarily a strategic matter. Customer-centricity is not always the best strategy, nor the only one available to companies.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

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