The Never-Ending Quest For Customer Value

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Our family is in the process of getting ready to move to a new home. One of my key assignments is de-cluttering our current abode. As part of this, every day I’m required by my wife to prepare and toss a plastic trash bag of printed content, accumulated from many years of customer and employee experience consulting, research and training.

Recently, during one of my daily clean-out sessions, I came across an interesting printed 2002 presentation deck by Dr. Jagdish Sheth of Emory University The title of the presentation was “Quest for Customer Value.” The material was from a major customer experience conference where we were both speakers, which was probably why I’d held onto it for so long.

Thinking about what has transpired in the CX world during the intervening 17 years, it was striking to see how prophetic Professor Sheth has been. In many areas impacting customer value his forecasts have been either exactly on target or very, very close. Here are just some of the highlights (and remember, this is from a 2002 CX conference) from Dr. Sheth:

– Marketing practice and philosophy is continuing to evolve from product-centric and competition-centric to customer-centric. Companies that are merely good at value provision fail largely because their marketing cultures are ‘prisoners of past paradigms’
– Customers can be defined as ‘users’ who want performance value; in b2b markets, this user role can be separate and specialized, but can be blurred in b2c markets (because the user may not be the actual consumer or purchaser)
– Value creation is process-driven, not program-driven, making it more difficult to imitate
– Value creation is a process obsession, is continuous, and is cross-functional
– Performance value can be represented by factors like differentiation, innovation, mass customization, exemplary/unique services, superior frontline information systems, employee empowerment and competence, and one-stop accountability

Dr. Sheth understood that leading companies were now engaged in relationship marketing with their customers, defining it as follows: “It is the understanding, explanation and management of ongoing collaborative relationships that customers are willing and able to engage in with their preferred suppliers.”

Relationship marketing foundations, he went on to say, come from the fact that customers need and want to reduce market choices, i.e. their brand consideration set, and the risk, time, and uncertainty of outcomes inherent in market choices. He compared transactional and relational market/customer behavior models, recognizing that transactional behavior was characterized by low customer investment and high outcome uncertainty.

The role of marketing, he concluded, is to follow practices that produce investment and certainty value for customers; with the understanding that doing so will encourage relational market behavior. Where this movement away trom transaction-centric marketing has clearly brought winners is leaving antecedent approaches like customer satisfaction (the what) and ad hoc programs (the how) behind. In sharp contrast, relationship-centric marketing, and the enterprise value it represents, is built on continuous and strategic business processes and customer commitment (which we express as advocacy).

Finally, Dr. Sheth, in this role of customer experience and value Nostradamus, forecast the repositioning of customer relationship managers. This function, as he saw it in 2002, would move from sales-driven to solution-driven, and from an account executive to a trusted advisor. We’ve seen this morphing play out particularly in the b2b world.

Organizationally, he saw relationship marketing evolving from functional silos in a traditional top-down enterprise structure, to an integrated, collaborative, and highly connected model with intense customer focus. This, he believed, would be marked by the emergence of e-business, customer relationship management, and especially the evolving need for a Chief Customer Officer. And, without specifically identifying the increased emphasis on employee experience, the relationship marketing model he laid out actively depended on a more robust role for everyone in the enterprise, irrespective of function and level (which we call commitment and ambassadorship).

In sum, there was a great deal of predictive reality and accuracy represented by this presentation. At minimum, it reinforced that the quest for enterprise customer value optimization, as I’m sure Professor Sheth would agree, is never-ending.

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