Why Organisations are Failing to Build Customer Centricity


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For an organisation to be deemed  ‘customer centric’ it will have developed the capability to design and to deliver a unique customer experience – a principle that is the blend between the product, communication and/or service and very importantly, the emotions evoked across all moments of contact – an experience that profitably and positively impacts the customer acquisition initiatives, the customer retention initiatives and  the cross-sell and up-sell initiatives. However, in order to profitably and positively impact these three extremely important value drivers, the business needs the insight to optimally allocate resources to profitable customers. Importantly, ‘profitable customers’ doesn’t only mean those whom are profitable today. It includes those whom will be profitable in the future through normal commercial engagement and through equally important and sometimes intangible value contributions such as positive ‘word of mouth marketing’ and referral  value.

So……….when we read those lofty mission statements that paint the picture of a ‘customer 1st’ business, gawk with wonder at those ‘organisational values’ that promise the world, stare with amazement at press articles and web-entries that freely use self proclaimed descriptors such as ‘customer centric’ and ‘world class service’ we have the right to be cynical. Not many organisations get it right.

Our global customer management capability benchmark (CMAT™) indicates that customer management capability, in general, remains fairly static year on year. This indicates that although many organisations have recognised the need to become customer centric (and in fact have done something about it by having their capabilities professionally assessed through a methodology such as CMAT™) they are failing to execute in a meaningful and  sustainable way. They are failing to re-orient the organisation around a true customer centric mindset. In so many cases there is confusion about what customer centricity means and a distinct lack of enlightened leadership that recognises that economic and market changes are calling for a different way of doing things. Increasing competition, more insightful and educated customers, evolving customer needs, diminishing levels of loyalty and trust are all ‘alarm bells’ that are being ignored.

Not only are the ‘organisation’ systems broken but so too are the ‘market’ systems. The obsession with shareholder value has boosted market capitalisation but has led to financial meltdown.  Increasing pressures from investors require short term results. Corporate boards are challenged by the analyst community to report against aggregated metrics that are deemed to be indicators of business success and sustainability. These are often so aggregated and short term driven that they have little bearing on sustained longer term results. These realities force executives to focus on raising expectations about future performance and then to drive hard to meet those expectations in whatever way possible. In too many cases the decisions made are not in long term interest and are more focussed on ‘puffing up’ short term income statements than building sustainability.

With this as a backdrop it’s no wonder that organisations are failing to live up to their customer centric aspirations. We can confidently predict that the future will look different from the world we inhabit today. How quickly or how slowly that landscape changes remains highly uncertain but we all know how quickly change happens. Amongst other realities the future promises:

  • New technologies that will better enable organisations to both ‘sense and deliver’ what consumers want
  • Interactive dialogue and 2-way conversations that provide free flowing information exchanges in both directions
  • Younger generations who have different buying patterns from those of older generations
  • Multichannel options for buying, interacting, problem solving and communicating
  • Evolving organisational design that is more dynamic and more team based than the traditional hierarchical structures

When we add these few realities  to the mix we recognise that the future is going to consist of increasing  levels of complexity, particularly for those organisations chasing the ‘customer centric’ differentiator. In this rapidly evolving world there is increasingly less tolerance from the consumer for mediocrity and false promises.  We already have significant lower levels of belief and trust in organisations and brands that have, in the past, stood for stability and consistency.

Quite simply, if businesses that believe their own rhetoric about customer centricity being their competitive advantage don’t really start to ‘practice what they preach,’ they need to move away from their perceived point of differentiation and channel their energies elsewhere. They need to find some point of differentiation that is meaningful and relevant to their customer base. At least then they may be perceived as more authentic, even if less customer centric

Republished with author's permission from original post.

Doug Leather
Doug is a leading expert in Customer Management working globally with large blue-chip organisations. He is best described as a Customer Management Evangelist/Activist as a result of his broad multi-industry and multi-country insights into customer management capability understanding, best practice application, customer experience, business models and business performance improvement. He is a Wharton Business School Alumnus.


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