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?
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.
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.
I must agree with your premise that Customer centricity (and I might add Customer Value) are more than Customer Experience,
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.
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.
Michael, as always you add to the conversation. I often talk about human centric which feels like a variation from your insightful stakeholder-centric contribution!
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!
Chip, thank for “compelling values lived every day.” By the way congrats on the success of your latest book!
Gautam – customer value is at the heart of it all isn’t it? Thanks for adding that distinction.
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).
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/).
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.
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.
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.
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.
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.
I have been asked what my definition of customer centricity is.
I have thought about this again and again and still have no clue until I read yours: “Customer-centricity is a commitment or a strategy to assure the success of your customer.” The Starbucks’ double-ply toilet paper is a simple and convincing example to define customer centricity. Isn’t it?
However, “two-ply toilet paper” perfectly fits companies whose brand promises are about ‘service’, like Ritz Carlton and Virgin Atlantic. But how about companies who compete merely on pricing like Ryanair?
I trust that Ryanair would definitely go for “single-ply toilet paper”. This act (i.e. the lean and mean polices to save every penny) matches their brand promise, drives success for customers since they’re looking for the cheapest airfares, and creates mutual values for customers and Ryanair. Isn’t it customer centricity?
Albeit you may say that because Ryanair induces service pain points to customers. Yet Starbucks’ prices is also a severe customer pain point (see “Are Starbucks’ Prices Too High?” http://customerthink.com/are_starbucks_prices_too_high/).
Service is a value; service can be a pain point. Similarly, price is a value; price can be a pain point too. Do we only appreciate the ‘value of service’ and address the ‘service pain points’, but discriminate the ‘value of pricing’ and ignore the ‘price pain points’?
I have never heard of anyone says or agrees that Ryanair, or any brand who competes purely on ‘pricing’, is a customer-centric company.
Literally, is customer centricity – like conventional CX – is just service-in-disguise? Shall we call it “service centricity” instead?
I would love to hear your thoughts.
Customer centricity is NOT service centricity
Value is both the benefits and the price or benefits/price
Ryanair provides benefits. It flies point to point to various locations. Generally on time. They are affordable to many. With their low price they provide value. That is why people travel with them. If they got no value they would not fly them, as many who prefer other airlines. So where does CX and service fit in? Value is what makes people buy. If CX made people buy, no one would travel Ryanair
chiming in here with some thoughts.
To me customer experience is a result, customer centricity (or process centricity, which is what Ryan Air is closer to) is a strategy. Customer centricity in this context would be the strategy of ensuring (own) success by putting customer interests at the center of any (or at least most) decisions, based on the idea that what is good for the customer is good for the company. Process centricity would be the selection of one or few KPIs (could also be customer objectives) which are used as a base for decision making. In the Ryan Air example this would be the fare as the single most important one.
Thomas, to me customer centricity is a strategy, a thought process and a mind set. CX is one part of being customer centric
Based on what you said, if I understand correctly, Ryanair is process-centric not customer-centric.
In your opinion, is there any chance for a brand competes only on pricing can be a customer-centric company?
If the answer is NO, shall we conclude that there is no place for any brands compete only on pricing in the customer centricity world?
The fact is that Ryanair has customers. Customers come to them because they perceive value over competing alternatives. For these customers, RyanAir is creating value and so they are customer-centric
You said, “Customer centricity is NOT service centricity” and “Ryanair provides benefits….”
Your comments in another post “Ryanair: Low Prices + Unhappy Customers = CX Success Story?” (http://customerthink.com/ryanair-can-low-prices-plus-unhappy-customers-equal-cx-success-story/) argued that Ryanair is practicing good CX.
Are you saying that Ryanair is both customer-centric and practicing good CX?
If I misunderstood you – Ryanair isn’t customer-centric; they are only practicing good CX – are you suggesting that it’s possible for a brand to deliver good CX but NOT customer-centric?
Sanpson, I am saying RyanAir is customer-centric for its business segment of customers and creating value for them, and delivering expected or better CX for that segment
Good! Ryanair is both customer-centric and practicing good CX (for its target customers).
The general offers of customer centricity include (the terminologies might differ, but their meanings are similar): culture transformation; emotional engagement; employee engagement; and service improvements.
How could these offers apply to companies like Ryanair who compete purely on pricing?
Gautam, there will be some sort of CX, regardless of whether a company is pursuing a customer centric strategy or any other strategy. The focus is just different, as is the culture, mind set and thought process. I wouldn’t say that Ryanair is customer centric as they are just focusing on one single key outcome that their customers have: They want to get there at the minimum price point. Everything else is subordinate and/or irrelevant (with the exception of legal frameworks that apply). Your reply to Sampson basically says that every company that manages to stay in business is customer centric as there apparently is a notion of value creation. Or else they would be out of business soon.
Ryanair as well as a whole raft of discount brands are ‘creating value’ on exactly one scale: price. If that makes for a good CX then you are right. To me the outcome ‘good CX’ entails more than just that.
good questions. I wouldn’t name Ryanair or the bunch of German discount stores customer centric.
If the only measure is price then I would say that a brand, indeed, cannot be customer centric. Now, if they put some constraints into the price politics that support further aspects of experience (and getting the minimum price is an experience, too) then we are coming into a grey zone. So, in theory process centricity and customer centricity are mutually exclusive but then these strategies are on two different places of a strategy continuum. There very rarely are pure play strategies.
In answer to your question: If a brand is a price policy pure play then in my opinion it is not customer centric. Customer centricity requires outside-in thinking. Optimizing processes for minimum cost overall is inside-out.
Thanks. So, there is no place for any brands compete only on pricing in the customer centricity world.
How about companies compete merely on product? Let me quote my favorite example: Sukiyabashi Jiro sushi restaurant.
Jiro generates numerous valleys: accept no walk-ins, reservations have to be made months in advance, located in the basement of an office building, with a modest wooden counter and only 10 tables in the entire establishment, no choice for menu, very limited time for meal, steep prices and bad service. Jiro focuses all their resources to make the world’s best sushi (product) for their diners.
Yet Jiro has the highest Michelin ranking and his restaurant is always full. The place is so famous that U.S. President Barack Obama asked to dine there during his visit to Japan in 2014. (For details, see https://www.linkedin.com/pulse/secret-eliminating-imitators-preventing-your-blue-ocean-sampson-lee/)
Jiro has delivered their brand promises, created significant values for customers, and achieved the business results that might make all of their competitors envious. Their Branded Peak – the world’s best sushi – is strikingly apparent.
Based on your above rationale, Jiro is process-centric not customer centric.
Literally, shall we conclude that there is no place for any brands compete purely on product in the customer centricity world?
well, it is the same argument. However, I do not think that there is a competition purely on product. Not knowing the restaurant you use as an example I would not be surprised if the long wait list and the refusal to accept walk-ins correlate and are part of a scarcitiy policy that shall make the restaurant more exclusive. I wouldn’t be surprised if prices are high, too. The basement and the modest counter might be part of the history/folclore of the restaurant, and therefore be part of the experience. Both also seem to offer minimal distraction from the main thing: Good food.
I wouldn’t be surprised if the staff exhibits considerable pride in the restaurant. How is the culture/attitude of the staff?
Can it be that they are actually offering a kind of lifestyle celebration and not just food?
I know a few restaurants that offer a set menu only and they tend to belong to a high quality group.
PS: On a side not Jiro does not seem to follow the prevailing growth attitude as well if I get your article on LinkedIn right
There’re various perspectives to explain the success of Jiro. What you mentioned “scarcity policy” is one of them. I’d use “psychological immune system” suggested by psychologist Daniel Gilbert.
Simply put, it’s about: significant pain causes us to rationalize our suffering and assume we are suffering for something great. It may explain why Jiro’s sushi is perceived as the world’s best sushi.
The big mouth of Michael O’Leary irritates customers. It’s a free advertising to say, “don’t come to us, we offer bad service (but cheapest airfares).” Except for saving costs, their extremely lean and mean policies echoes with their CEO’s speeches. They trigger the psychological immune system of customers to perceive that Ryanair is offering the lowest airfares.
And you’re right, in a broad sense, there is no competition purely on product. When a customer perceives an experience, there’re attributes and sub-processes other than product. This is also true for pricing. Customers won’t just experience pricing in any experience. Therefore, in a board sense, there is no competition purely on pricing.
To facilitate our ongoing discussion, I will use price-focused and product-focused brands to replace companies compete purely on pricing and product.
Since we have concluded that there is no place for any price-focused or product-focused brands in the customer centricity world. Subsequently, only the following brands are eligible to stay in this world:
1. Customer-focused brands, e.g. Zappos
2. Customer-focused plus price-focused brands, e.g. Amazon
3. Customer-focused plus product-focused brands, e.g. Lexus
Be aware that all these three types of brands are service-related.
Thus, if we still want to use the definition of Joseph, “Customer-centricity is a commitment or a strategy to assure the success of your customer”, we have to add a remark that “The success doesn’t include the values generated by those companies who are price-focused or product-focused” or “The success only includes the values generated by those companies who are service-focused or related”.
By excluding the price-focused and product-focused companies from the customer centricity world, I become more and more believe that customer centricity is actually, service centricity.
I agree. But Ryanair is following its customer strategy. And it (Ryanair and its strategy) is successful in its segment
success and customer centricity are two different things. Success can come from many sources, a customer centric strategy being one of them. Ryanair (mostly) delivers on its Aldi promise. There is nothing wrong with this. It is just not customer centric as it concentrates on only one single aspect. Or else we would need to agree that every business is customer centric.
Thomas, Your assumption is customer centricity must be defined as complete customer centricity. Or there is no customer centricity. Companies are customer centric in different degrees, and it depends on their strategy.
I did not say success comes from customer centricity, but on creating value better than your competitor in that segment
I actually do think that the ‘pain psychology’ does not apply to pricing centered organizations. When choosing Ryanair or Aldi I do not suffer for something great but because I cannot or do not want to pay more. Also my expectations are totally different. Actually, I am willing to suffer more(!) when choosing a low cost provider because of missing experience (comfort, speed of service, service at all, …). I am, however, not suffering for something great. Looking at a world class restaurant I would judge differently and rationalise away the pain.
Adding another example to your list: Would you judge Apple as being customer centric? After all, their combination of products and services is making life for customers much easier – as long they stick with Apple. There is an aspect of ‘product in use’ related to customer centricity, too.
Service seems to be an important aspect of customer centricity, but then the best service does not help if the product that I purchase doesn’t fulfil my needs. So, customer centricity needs to permeate the whole value chain of the company.
What we could apply here is my simplified ‘Maslov’ pyramid of customer expectations. Fulfil the base needs only, you are not customer centric. The more of the higher needs you fulfil, the more likely you are to be customer centric.
So, in summary, I would deny that a (low) price focused strategy can be customer centric. Product focused strategies can be customer centric. Service is an important aspect of customer centricity.
The key aspect seems to be that customer centric companies have an outside-in view and build themselves around the customer and not the other way round.
And yes, from here on the argument can start to become cyclic 😉
Thomas, you nailed it with this statement:
“The key aspect seems to be that customer centric companies have an outside-in view and build themselves around the customer and not the other way round.”
Customer-centricity is a set of behaviors (in other words, culture), not a focus on product, price, or service. And it’s also not just listening to customers and doing whatever they ask. Southwest is customer-centric, but doesn’t give seat assignments, for example.
There’s not a standard definition. Some use the term to mean focusing on or targeting customers (Peppers and Rogers), sometimes called CRM. But customers don’t think you’re customer-centric just because you sent them a targeted offer.
The CX movement has captured the “outside-in” idea that is core to customer-centricity, but generally lacks focus on innovation and co-creation that is also part of customer-centricity for more advanced brands.
Sampson, you’ve said before that customer-centricity is the problem, not the solution. Amazon seems to be doing pretty well considering it defines its entire approach as “Earth’s Most Customer-Centric Company.” According to Bezos, from a 2011 video (https://www.youtube.com/watch?v=-hxX_Q5CnaA&feature=youtu.be), customer-centricity means:
1. Obsess over customers. “If you’re truly obsessed about your customers” Bezos says, “it will cover a lot of your other mistakes.”
2. Invent. “You need to listen to customers, they won’t tell you everything. You need to invent on their behalf. Kindle, EC2 would not have been developed if we did not have an inventive culture.”
3. Think Long Term. “Most initiatives we undertake take 5 to 7 years before they pay any dividends for the company.”
I don’t necessarily agree that customer-centricity is more than customer experience. It really depends on how the ideas are adopted in practice. Customer-centricity can be “implemented” quite narrowly to mean targeted marketing, and for some brands customer experience can mean the entire value proposition.
But based on my recent study (see http://customerthink.com/customer-experience-at-a-crossroads/), the vast majority of CX initiatives are focused on outside-in process improvement. Not really about product improvement or innovation, and never about price (reduction) as the main focus.
We interpret the word “great value” differently. If you’ve read any of my articles, there’s always an Emotion Curve showing peaks and valleys. To me, great value means a significant pleasure peak. It could be the cheapest prices, best service, or excellent product. I hope this clarification helps.
If we use the definition of Joseph, “Customer-centricity is a commitment or a strategy to assure the success of your customer”, then Gautum is right: Ryanair is customer-centric. Your simplified ‘Maslov’ pyramid is irrelevant. As far as Ryanair is offering the cheapest airfares, customers don’t about care basic needs or higher needs. Ryanair has done a great job as customers achieve their success.
Of course, it’d be another story if we deploy your definition of customer centricity.
Based on what you said, product itself is not enough, it takes service or even the whole value chain to be customer-centric. Apple is customer-centric not just because its products are great, but also due to their excellent after-sale service, in-store service experience and more.
People buy from Louis Vuitton because of their product’s prestige feeling. However, they provide bad service. (For details, see “What Really Drives Customers to Buy From Louis Vuitton Again?” http://customerthink.com/what_drives_customers_buy_louis_vuitton/)
Therefore, LV is not customer-centric despite their product (or product image to be exact) is great.
The necessary condition for what you said “Product focused strategies CAN BE customer centric” is still about ‘service’. Without ‘service’, I don’t think you’d call Apple customer-centric.
Thus, product-focused companies without ‘service’ CAN’T BE regarded as customer-centric.
Literally, I will hold my point of view that customer centricity is service centricity, because only service-focused brands are included, price-focused or product-focused brands are excluded in the customer centricity world.
When I Google “What is customer centricity”, the answers extracted from the first page search results show vastly different definitions. Even a small group discussion like us, the perspectives of Thomas, Joseph, Gautum and I can be such divergent. Imagine how frustrated or confused when someone would like to implement customer centricity.
I’m not sure anyone can implement anything successfully without a clearly defined definition.
“Be Water, My Friend”, a famous quote of Bruce Lee, “Be formless, shapeless, like water. Now you put water into a cup, it becomes the cup. You put water into a bottle, it becomes the bottle. You put it in a teapot, it becomes the teapot.” You’d be invincible if you can possess the flexibility of water.
“Be Customer-Centric, My Friend.” No one can challenge or beat you. You can change to anything (definition) you like. Then you’d be undefeatable, like water.
And the word “customer-centric” itself is so politically correct; who dares to say anything against it? In particular when you said Customer Centricity is a culture. How can a symbolic thing be implemented? Without implementation, customer centricity will have NO chance to fail!
They’re the tempting reasons for maintaining the status-quo of customer centricity.
I do admire the courage of Joseph for trying to give a fresh, meaningful and definite definition.
Yes, it’s frustrating that the “experts” don’t agree on a concise definition of customer-centricity. But there’s more agreement than you may think among business managers about what customer-centricity is, and isn’t.
For example, based on CustomerThink research,
98% agree customer-centricity is a business strategy for creating loyal customer relationships
92% agree customer-centricity means serving customers in a way that also creates shareholder value
68% disagree customer-centricity is mainly about customer interactions, not products or pricing
72% disagree customer-centricity means selling more products to the same customers.
Business people attempting to implement the concepts eventually define what terms means, not experts. All we can do is get the ball rolling and have some influence.
CRM at one time was defined the same as customer centricity, and yet became mainly associated with technology. Despite how experts seem to agree on CX/CXM, in reality most CXM initiatives are focused on improving interactions and processes.
And customer-centricity? Time will tell. For now, maybe people should ignore the experts and follow the lead of Jeff Bezos. Listen to customers and invent for customers. Think long-term.
Call it whatever you want, just do it!
You have to be customer-centric to understand and create value which includes creating the requisite experience. You drive your actions based on your customer strategy and what the customer wants.
interpreting your words in the light of the discussion above, and coming from the business outcome, your argument chain is: I am successful and make money, hence I create value along with the requisite experience, hence I understand my customer, hence I am customer centric.
With that every company that stays afloat is customer centric. Failing ones are not.
Bob, maybe Bezos (and the business executives you quote) are the experts? 😉
Sampson, sorry for being late to the re-engagement on the post. I have not used Ryanair but I don’t think “low cost” implies a lack of experience. For example, I think Costco is a an experience brand in the US, They are in a warehouse setting and sell items in bulk. They create an outstanding employee experience and pay their people well (relative to their primary competitor). They use product sampling as one of their key experiential offerings and have white label products to which they have affixed their brand. I suspect they use single-ply toilet paper but can’t verify. My point is a branded customer experience is designed across the customer journey in keeping with the brands unique value proposition and considers what is “so Costco” or “so Ritz-Carlton”. It executes to deliver practical value (cogntively defined benefits) and emotional value (as described by Kahneman and Tversky and others. Thanks for re-igniting the discussion through your though leadership. Brilliant contributions, as always, followed from Bob, Thomas, and Gautam,
Glad to hear your voice and thanks for your nice words.
It’s such a coincidence that you mentioned branded customer experience. Perfect timing!
In the context of business strategy, I’m going to argue that “branded experience” is a good option to replace customer centricity. I’ll demonstrate my argument points after I’ve replied to Bob why following Amazon on the path of customer centricity is a bad choice.
For customer centricity, I don’t think that following Amazon is a right move. Because Amazon is NOT customer-centric, not to say the Earth’s most customer-centric company.
Two months ago, I forgot my Amazon login password and my primary credit card was expired. I contacted their CS. To make the long story short, their customer service agents were polite but diplomatic. Their priority’s to follow their standard procedure and didn’t listen. It took me 10 rounds of emails and 7 days to login again. It’s one of my worst service experiences in my life.
I thought I was unlucky until I read the post of Maz Iqbal. In “Customer Experience: Is Amazon Going Downhill?” (http://customerthink.com/customer-experience-is-amazon-going-downhill/), Maz shared his bad service experience and was echoed by the commenters of his post.
Shaun Belding commented, “I am seeing a rapidly increasing number of articles and posts indicating a growing disenchantment with Amazon…. there are very clear signs, as Maz points out, that they are obsessing over cost control.”
Echoed by Shaun’s article (http://customerthink.com/the-top-10-bad-customer-service-stories-of-2018/), Amazon is listed as one of “The Top 10 BAD Customer Service Stories of 2018”: “Imagine that you’ve ordered three cartons of toilet paper from Amazon. The cost: $88.77. Then imagine that you are charged $7,455 for the shipping costs…. It wasn’t until she (the customer) took the matter to a local television station and the story went viral for Amazon to take action. Two-and-a-half months later, she was finally reimbursed.”
Well, you may say the above evidence is not enough to conclude that Amazon isn’t customer-centric.
Look at this: “Amazon accused of treating UK warehouse staff like robots” (https://www.theguardian.com/business/2018/may/31/amazon-accused-of-treating-uk-warehouse-staff-like-robots)
“AMAZON WORKING CONDITIONS: URINATING IN TRASH CANS, SHAMED TO WORK INJURED, LIST OF EMPLOYEE COMPLAINTS” (https://www.newsweek.com/amazon-drivers-warehouse-conditions-workers-complains-jeff-bezos-bernie-1118849).
Many CX experts believe that one of the important and necessary components of customer centricity is employee engagement or employee experience. “Happy employees lead to happy customers.” What would you say about Amazon’s employee experience?
Don’t you think that Amazon is NOT customer-centric, not to say the Earth’s most customer-centric company anymore? I won’t regard following Amazon for customer centricity is a good suggestion.
I do not understand. To me customer-centric means focused on customers. I do not understand why some suggest this is not right.
Sampson, thanks for clearing this up. A company can’t be customer-centric if it has any unhappy customers or employees. Makes perfect sense. Please be sure to update Jeff Bezos ([email protected]) on his failed business strategy.
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