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Is Customer-centricity Dead?

Mike Boysen | Dec 3, 2016 136 views 12 Comments

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Over the past 20 years or more, the term customer-centricity term has died and risen numerous times. Each time it rises from its own ashes like the phoenix, it takes on a completely new meaning. In fact, the meaning has never changed; but the solutions designed to address it have — and they have done so with a complete lack of understanding.

It is not even in the spell-checker by default

Generally, we hear about customer-centricity through the various approaches that emerge that attempt to address it. Here are a few examples:

  • 360 degree View
  • Voice of the Customer
  • Engagement
  • Big Data
  • Customer Experience
  • Customer Success
  • Social Listening / Selling

They each fail to address the underlying problem: customers are trying to get something done; not interact with a brand. Voice of the customer advocates will tell you that customers have needs, and they are important — however, they can’t articulate their needs. There is no agreement amongst this crowd on what a customer need is; so it’s no wonder they think this way.

Customer Success has also been used as a proxy for customer-centricity. On it’s surface, companies will invest time and resources to engage the customer with free consulting services in order to lock-in that next sale, or subscription payment. But they are always asking How are We Doing?” and not the more appropriate question, How are You Doing? And even if they were, again, there is no common agreement around the definition of a customer need.

The emergence of social got everyone excited by the belief that finally, we can peer into the needs of our customers and prospects. But again, this new focal point — along with its big brother, big data — looks back into a sea of unstructured data; with not agreed upon method for sorting into meaningful information. Even worse, it is most often viewed in the context of a specific product or service offering — which is clearly product-centric.

Customer-centricty has one chance

As I’ve evolved as a consultant, it’s become obvious to me that we have all been getting this wrong. CRM implementations are inevitably re-done (or dis-used) because either the wrong enabling technology was selected (no foresight), it improperly aligned to real, high-priority business problems, or the wrong problems were surfaced in the first place. At the end of the day, when no one can agree on what a need is, the highest-paid-person’s-opinion (HIPPO) prevails — which has the same success rate as founders and their start-ups.

The only path beyond this chaotic view of the customer is to understand what they are trying to accomplish in their lives, or businesses, in a clear step-by-step way. After all, we spend a lot of time transforming processes and measuring the the resulting activities. So, why wouldn’t you also want to understand the process a customer goes through to get something done?

…and I don’t mean a customer journey

Measuring the future is complementary to measuring the past. To do this, we need a common definition of customer need — one based on how customers measure success in accomplishing something — and a systematic means for understanding which needs are currently (and over time) unmet. This would allow us to design (and improve) the products and services of the future with consistent alignment to needs that customers want you to satisfy — even if they can’t articulate them.

This is what customer-centricity has always been about, and should to be about going forward.

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12 Responses to Is Customer-centricity Dead?

  1. Michael Lowenstein December 4, 2016 at 7:47 am (1296 comments) #

    From my perspective, there are multiple contradictions in this post. Chief among them – again from my perspective – is that customer-centricity is dead, nor is it dying. It’s evolving to something even more powerful for the enterprise: stakeholder-centricity. Happy to engage in dialogue, and present definitive proof, about this.

    The notion of customer (or stakeholder) need identification is generally on track, but would suggest broadening it to ‘perceived value’. And, perceived value does carry a pretty useful definition. Though not word-for-word, perceived value is about the individual’s receipt of emotional and rational (tangible, functional), and memorable, receipt of benefit through the transactional interaction or long-term experience with a vendor’s product and/or service.

    And, unless the customer journey can be readily translated into actionable marketing, communication, service, etc. of stakeholder-centric initiatives around the above definition of value delivery, then, yes, need and journey aren’t particularly aligned.

  2. Gautam Mahajan December 4, 2016 at 8:31 pm (175 comments) #

    Customer -centricity is a company’s approach to the customer. Are they very customer-centri; marginally customer-centric? I suspect most companies are marginally customer-centric and not completely customer centric. Yes, the customer is important but…..and so they start processes to become more efficient (and cost reductive) in facing the customer. But for these companies, the customer does not come first.
    Customer-centricity is not dead…it does not exist as it should in companies
    Consultants have helped confuse companies with all sorts of customer words, including CRM, CX, CJ, CS etc. They are all part of customer-centricity. A customer-centric company works towards zero complaints and no unnecessary customer time and effort.

  3. Sam Klaidman December 5, 2016 at 7:55 am (61 comments) #

    Mike – Customer-centricity is neither dead nor dying.

    I think that customer-centricity is a euphemism for “creating customer value”. As you said in the second paragraph, “customers are trying to get something done”. Customer value creation means helping the customer make progress on getting something done. The way a business does this is by focusing all its’ resources on this task. As they have successes their stakeholders and employees will also reap benefits.

    The troubles arise when the customer does not believe that the business is putting them first in internal decision making. That is why Jeff Bezos famously brings an empty chair into a meeting and reminds people that the chair represents their customers and she had better be satisfied with the decisions that will be taken at the meeting.

    And I know that C-C is not dead because businesses are still making money – people do not buy from a business unless the use of the product of service provides more benefits per unit of money than any other alternative. I also know that many businesses are less than effective because they are going bankrupt, laying off lots of employees, and/or moving to a lower cost area to manufacturer their products. So, I think your fundamental premise that businesses must focus more on creating customer value hits the bullseye.

    Thanks

  4. Andrew Rudin December 5, 2016 at 7:05 pm (223 comments) #

    Hi Michael: words don’t cleanly enter and exit our lexicon, so I don’t subscribe to the idea that customer centricity has died and risen. And it’s commonplace for words to adopt new meanings. Cool, awesome, and snap didn’t begin life as exclamations. Similarly, if customer centricity includes concepts, ideas, and definitions that were not part of its original use, that seems normal and expected.

    I struggle with the idea that people buy things to “get something done.” Possibly yes, if the object of the purchase is a quarter-inch drill bit. But the concept seems coldly utilitarian to me, and doesn’t adequately explain why people buy luxury goods, take vacation trips, become fans of a musician or sports team, or even purchase a particular article of clothing in several colors. In the case of music, it would seem odd to say, “he bought a ticket because he needed something to do on Saturday between 8:30 pm and and 11:30 pm.”

    In many instances, what customers really want to achieve seems more layered.

  5. Gautam Mahajan December 5, 2016 at 8:20 pm (175 comments) #

    Sam, you have created a master definition of Customer-Centricity:
    customer-centricity is a euphemism for “creating customer value”

    I love this definition, and we should all use this

  6. Andrew Rudin December 6, 2016 at 3:53 am (223 comments) #

    Gautam: the definition of euphemism is “a mild or indirect word or expression substituted for one considered to be too harsh or blunt when referring to something unpleasant or embarrassing.” Modern examples are correctional facility in place of jail, or collateral damage in place of accidental deaths.

    I don’t see customer centricity qualifying as a euphemism for creating customer value, unless you think that creating customer value is somehow harsh or blunt. I think that such misappropriations add to the difficulty that practitioners have in using this term, as Mike alludes to in this article.

  7. Mike Boysen December 6, 2016 at 6:04 am (84 comments) #

    Michael Lowestein –

    I don’t embed the entire framework in each blog post each time I write because it begins to get old, but using outcome-driven innovation as the basis, there is a very systematic (and proven) method for measuring what I call perceived value. I call it that because those perceptions change over time as new solutions (and messaging) arise.

    It’s a completely integrated approach, aligning all internal stakeholders to deliver what the customer wants.

    I don’t believe customer-centricity is dead; but I DO believe that very few companies (or consultants) know what it means. Just my take after many years of observation

  8. Mike Boysen December 6, 2016 at 6:09 am (84 comments) #

    Sam Klaidman –

    There is a certain level of inertia in the market(s) around tablestakes that allows companies to make money. However, there is solid research that shows that 90%+ of companies cannot sustain growth. This tells me that they are not tuned into customers as new solutions emerge and customers begin to switch (and the incumbents continue to add costly features).

    Even if everyone had access to a formula for C-C, I’m sure this would not change because there can only be so many winners. However, all of the experiments and “words” that have emerged (not the least of which is the silly fail-fast notion) have done nothing to show me that C-C can be measured in a complete and systematic way. Even ODI – which I talk about a lot via Jobs-to-be-Done – has work to do to make it consumable by the masses; and it’s the closest I’ve seen to C-C

  9. Mike Boysen December 6, 2016 at 6:13 am (84 comments) #

    Andrew –

    ” struggle with the idea that people buy things to “get something done.” Possibly yes, if the object of the purchase is a quarter-inch drill bit. But the concept seems coldly utilitarian to me,”

    Analyzing processes is also cold and utilitarian. You have a point when we are talking about perfume where there are more emotional/social factors that functional. However, by-and-large we need to eat, we need transportation, we need be comfortable, we need to communicate. These are functional areas where most businesses live.

    Maybe this utilitarian view is a bigger problem for consultants, who have to differentiate themselves, and often do so by words, graphics and/or personality (I live in this world). The reality may be far simple (and more disruptive to consultants), that systems are the foundation for everything we experience.

  10. Mike Boysen December 6, 2016 at 6:15 am (84 comments) #

    Gautam –
    “am, you have created a master definition of Customer-Centricity:
    customer-centricity is a euphemism for “creating customer value””

    Interesting because an academic thesis which used outcome-driven innovation as a basis for creating a Customer Value Model for the lighting industry would agree.

    https://trello-attachments.s3.amazonaws.com/57efead6a94d2b70a5394890/57fa2eee928e9a666253c26f/7315afe70601f81707caca1b74403974/MOT_MBA_2012_Nonie_Dalton.pdf

  11. Bob Thompson December 6, 2016 at 11:11 am (223 comments) #

    15-20 years ago, I ran around giving speeches that CRM was about a mutual exchange of value. And I have the PowerPoints to prove it!

    But it wasn’t a new idea then, or now. Just a new term. A term that, sadly, was eventually defined by the software industry to mean automating “front office” processes (sales, service, marketing).

    That said, the core idea (that I was trying to promote, anyway) was simply that delivering what customer perceive as value increases their loyalty which (if properly focused and managed) can drive business value (profitable growth).

    You can call that customer loyalty management, CRM, CXM, CVM, or JTBD, it doesn’t change the underlying idea. In the end, what these terms mean, including customer-centricity, is the mind of leader/adopter. So they can all be alive or dead depending on the skill of the practitioner.

    I’ve done some research on what business people perceive customer-centricity to mean.

    There is a strong consensus that creating loyal customers is a core idea, and that it should also create shareholder value.
    * 98% agree that customer-centricity means “a business strategy for creating loyal customer relationships”
    * 92% agree that customer-centricity means “serving customers in a way that also creates company value”

    Oh, and if customer-centricity is “dead” then please tell that to the 62% of companies that think customer-centricity has improved business performance.

    The hot term these days in customer experience management (CEM or CXM) which is the term most commonly applied to being customer-centric. That doesn’t make customer-centricity dead, either.

    Terms come and go. The fundamentals of ‘how’ to make this “loyalty thing” work is far more important.

    Based on research I boiled it down into 5 sets of practices (Listen, Think, Empower, Create, and Delight) that correlated with business success. It’s not any one thing, but a system of well-executed practices that determine whether customer-centricity will pay off.

  12. Mike Boysen December 6, 2016 at 12:28 pm (84 comments) #

    I don’t remember saying it was dead, only asked the question. I did, however, say that it has died and risen a few times. I still get push back from people when I use the term.

    As for asking companies how they define it, I’ll bet it was the marketing departments that responded. In my view, it must be a corporate-wide / integrated and consistent definition that shows a common approach to understanding customer needs – well beyond the engagements and touchpoints companies want to talk about.

    Maybe we should ask the customers how it should be defined.

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