Is this the real state of ‘customer-centric’ business?

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Last week I was fortunate enough to attend/participate in a informal gathering (in London) hosted by Bob Thompson (of CustomerThink.com). At this gathering we touched upon a number of topics and in this post I wish to share with you what left an impression upon me.

1. No consensus on what constitutes a ‘customer-centric’ business

Amongst the 10 – 12 gathering (of noted gurus, authors, speakers, consultants) I noted that we did not share a common understanding/definition of what constitutes a ‘customer-centric’ business. I am not sure that I found any strong agreement for my point of view that the defining being of a ‘customer-centric’ business is that of authentic care:

“when you are confronted by the choice of doing what is right for you at the expense of the customer or doing what is right for the customer even if it costs you, then are customer-centric if and only if you do what is right for the customer and take the hit.”

If you want to drill deeper into the defining characteristics of a ‘customer-centric’ business then read the following: The Three Pillars of Customer-Centricity

Bob Thompson shared the results of research he had been involved in some years ago. When customers were asked what constituted ‘customer-centricity’ they came up with: product quality/fitness for purpose; customer service excellence; being treated fairly; and price. Bob made a big play, as do others, about price only being fourth on the list. I will be writing a post on the price myth soon.

2. Only a handful of companies can be pointed at as being models of the ‘customer-centric’ orientation

Whilst we could not agree upon what singles out a ‘customer-centric’ business from one that is ‘not customer-centric’ we were able to agree that there are only a handful of companies that get pointed out as being ‘customer-centric’: Zappos, Amazon, SouthWest Airlines, USAA, Zane’s Cycles…….

3. The transition to ‘customer-centric’ business requires a transformation and that is not likely

What is holding back the transition from ‘business as usual’ to authentic ‘customer-centric’ business? There was a genuine agreement that this requires a transformation in mindset, leadership, culture, business model, organisational structure, performance measurement systems….. What is the likelihood of this transformation taking place voluntarily? Again there was general agreement that is highly unlikely if not impossible. There was mention of how the life of big companies is becoming shorter and shorter. The point being made was that companies get taken over, disassembled, die – as opposed to voluntarily transform themselves.

So any transition to ‘customer-centric’ business will be led by/driven by new entrants who are not encumbered by legacy thinking, legacy organisations, legacy business models, legacy cultures…… And by customers who take up arms and force chang.

4. Is there any real substance behind all the ‘customer-centric’ talk?

No. The gurus, the consultants and the company insiders agreed that – in their experience companies that make a big fuss/play on the customer experience and ‘customer-centricity’ are mostly indulging in either ‘self-delusion’ or PR/’messaging’. Who wants to say that they are not ‘customer-centric’ when it is fashionable to be ‘customer-centric’? We could only think of Michael O’Leary the CEO of Ryanair.

5. Why does pretty much anything to do with Customer end up in a technology discussion?

It was interesting to note that the whole Customer field (CRM, Customer Experience, Social Media, Social CRM, Customer Service…) inevitably ends up in a technology discussion. Why is that? That is the question that Bob asked I believe that the consensus was that this is the route of least resistance. This is what organisations are comfortable in discussing and doing. The technology as a silver bullet is a powerful myth. It reassures the Tops and Middles that they can continue doing what they are doing, not have to make any changes, not look at themselves, not confront leadership and management style, nor the business model…….. And of course the technology vendors are great at coming up with new silver bullets and selling them effectively.

5 COMMENTS

  1. Maz,

    Thanks for summing very nicely some great discussion in London!

    Yes, I think “customer-centricity” is a vague term that means something different to everyone. Customers have one view, based on whether a company meets/exceeds their expecations. Most companies play lip service, and look at customers as means to the end (profit).

    And yet, I’m not discouraged. Because any opportunity to really stand out is supposed to be difficult. Otherwise, everyone would be doing it!

    There are many ways to make money. Customer-centricity is one path, and there are enough examples to inspire me, and hopefully others to choose this approach.

    Let’s keep sharing examples. I think that’s the best way to show the many dimensions of customer-centricity.

  2. Maz,
    It was good to meet you and the others in London. Customer Centricity for me doesn’t mean you give the Customer everything they want. We have always thought Customer centricity is about how you are ‘orientated. For example if your boss asks you to work late, if you are family orientated you would say ‘no I need to get home and see the family’. If you are career orientated you would say ‘you are happy to work late’. Therefore with the same set of circumstances, dependent on your orientation, you make a different decision. The same thus applies with decisions that affect a Customer. Thus Customer centricity is a state of mind…
    I agree the transition to customer centric company is tough and not many organizations are capable of doing it. In a recent article I outlined five key insights on how to build a Customer Centric organization which may be of interest. http://www.customerthink.com/article/five_insights_on_how_to_build_a_customer_centric_organization

  3. For me being customer-centric means being organised around your customer rather than production, sales, shareholders etc. However, it has to be a very clearly defined target customer.

    There is a huge difference between being customer-driven and customer-centric. The former is a knee jerk reaction to whatever customers ask for whereby you end up trying to be all things to all people. The latter is a carefully chosen strategy to serve a target segment/s even if that means choosing to let some customers go.

    One of the most customer-centric organisations in my view is First Direct bank. They embarked on a highly publicised and controversial policy a few years ago of charging non-core customers for using their services and as a result some of these customers went to competitors. In my book that is a rare example of being truly customer-centric.

    Bob, thanks again for a stimulating debate.

  4. Maz,

    You are right that technology does pop up more often than not. And yes post implementation blues is also more common than not. So why are we addicted to making the same mistakes over and over?

    Most know that an effective strategy comprises a number of interwoven strands of which technology is but one. But the thing is, it comes shrink wrapped. Fully described in terms of function and feature.

    That is much easier to respond to than a set of ill defined people competencies or a modified customer journey that required brainpower and cross functional consensus.

    In other words technology tempts us to become lazy.

    It also tempts us to lie about the true cost of making something new and better happen. Business cases seldom look viable when the fully loaded cost of people and process are added in. So we pretend that flicking the switch is all we need. Maybe some custom integration at most.

    This is equally true about the real cost of leveraging skills investment if we start from that side of the transformation. Training starts but can never cement new behaviour. But again the true cost of change can be frightening and so we make do with the short term benefit of ‘event’ based learning which inevitably wears off over time.

    How many well intended interventions have truely lasted over time? Not many.

    Getting to grips with that might result in more organisations ‘doing the customer thing’ right.

  5. Hi Maz,

    Thank you for the summary of the meeting that we attended. I share your frustration that whenever there is a discussion about ‘customer’ then it tends to get dominated by talk of technology. I had the pleasure of interviewing Karl Chapman of Riverview Law the other day (http://www.adrianswinscoe.com/blog/reinventing-customer-experience-in-the-legal-sector-interview-with-karl-chapman-of-riverview-law/). They have established a new law form that has been built from the customer up and not from the partner down. However, one of the interesting things that Karl said was that whilst technology is important in helping forms deliver on their customer promises and deliver a better experience it is secondary to the people dimension. He emphasised (and I agree with him) that everything starts and ends with a person. Many forms forget that or, conveniently, put it to one side. Why? Perhaps because it does require real change, courage, it takes time, deals with many intangible things like how we are with each other other, how we treat each other both inside and outside our organisations and how much we care. Maybe also because it’s also harder represent ‘people’ initiatives on a balance sheet. Perhaps, that’s where the real challenge lies….getting to a point where our investment in people is reflected on a balance sheet?

    Adrian

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