Why your organisation is not customer-centric even if it is customer-centric


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This is a long post and a philosophic one so you might be better off doing something else unless you have an avid interest in customer-centricity and getting to grips with it. Furthermore, you might not like what I share here. It may disturb you and you find yourself annoyed even angry at the nonsense I am speaking. You are warned, now let’s begin.

Cutting through the confusion/tiresome debate around customer-centricity

There is much speaking/writing/debating on customer-centricity. Listening/reading/taking part in this ‘conversation’ it occurs to me that there is so much confusion about customer-centricity and the term has either become discredited or will be if we carry on as we are carrying on. So I write this post to bring clarity and workability to customer-centricity.

It occurs to me that the confusion around customer-centricity arises as a result of two distinct ways of talking about/making sense of customer-centricity being collapsed into each other. It is because of these two distinctions that it is possible for an organisation to be customer-centric and ‘not customer-centric’ at the one and the same time. There are subtle nuances around these distinctions which provide more distinctions. For the sake of brevity I am only going to explore/share the two big distinctions and ‘uncollapse’ them.

Customer-centricity as means (vehicle to get you to your end destination)

As I understand it, the marketing literature that brought ‘customer-centricity’ into the mainstream is concerned with customer-centricity as a means – as a vehicle for attaining marketing objectives. The business literature followed so that when ‘business strategists’ talk about customer-centricity they are talking means of accomplishing business objectives. When these marketers, these strategists, talk about customer-centricity then they talk about the course of action that the business takes (strategy). And they talk about organisational design – the way that the business should be organised (structure, roles, KPIs, management information etc) around customer segments rather than products.

In a product-centric company management is concerned with finding ways of selling more products to whoever can be made to buy the products. And the measure of success at playing this game is market share. Furthermore, in a product centric company the company will be organised around products. Business unit A will focus on one category of products from manufacturing/sourcing through to selling/servicing. Business Unit B will focus on a different category of product. When it comes to information you will find that it easy to get hold of information on/around products. For example, you will be able, easily, to find out how much of a particular product was sold; you will not be able, without considerable effort, to find out which products a customer bought across the entire product range supplied by the company as a whole. Then there is understanding / insight: you are likely to find that there is a lot of understanding of products but understanding/insight regarding customers (the context of their lives, what matters to them, how they buy etc) will be shallow.

According to the theorists and consultants the management of a customer-centric company should be concerned with ‘share of wallet’ not market share. The organisation should be organised around customer segments. And the strategy should be concerned with generating deep insight into customers and using this insight to come up with products, services, solutions even experiences that get customers to buy more from the organisation whilst costing less to serve. This may mean sourcing/creating new products to meet newly identified unmet needs. Or it could mean coming up with better value propositions: re-jigging how and what you communicate so that these customers buy more from you. The theory goes that if you do this then your organisation will keep more of your customers and they will ‘recruit’ new customers for you through word of mouth marketing.

So this school of customer-centricity, customer-centricity as means to, is concerned with changing organisations from being product centric to customer-centric. Or from an ‘inside out’ orientation to an ‘outside in’ orientation. So the talk deals with formulating customer-centric strategies, changing/transforming the organisation, putting in CRM systems…….

Notice that when taking about customer-centricity as means there are no moral questions, no moral considerations. In this clearing one grapples with formulating the right strategy, the right organisational design, picking the right CRM systems and bring about the desired change.

Customer-centricity as ends (‘for the sake of which’)

This is where it gets interesting. It is possible and some people do talk about customer-centricity in terms of ends/purpose. You see it is possible and necessary to ask the question: why, for what purpose, are we going to all this effort to move from being product-centric to customer-centric, from ‘inside-out’ to ‘outside-in’? Heidegger came up with the distinction ‘ for the sake of which’, which I want to use. All this effort to be customer-centric (as means) what is it for the sake of?

Read the literature that is used to by theorists, consultants and technology vendors and you find your answer: for the sake of the profit motive, for the sake of making higher profits. So the fundamental centre of the game of business has not changed at all. The be all and end all of the game of business continues to be the profit motive: making the numbers to enrich shareholders. Just the means has changed. That is fine. And consistent with customer-centricity as means.

Now throw into the mix a very different bunch of people. People who have a different understanding and speaking of customer-centricity. These people say that for a company to count as customer-centric, it has to be run ‘for the sake of contributing to / enriching the lives of customers’. These people are not naive, they get that for a company to survive it has to be profitable and it has be concerned with making profit. And they argue that the key difference is that the profit motive is secondary: a requirement to play/stay in the game rather than the raison d’etre of being in and playing the game.

Look, you and I have to be concerned with food/eating yet that is not the reason we choose to live, that is not what our lives are about. Or consider Steve Jobs. Jobs claimed that he never did it for the money. He claimed that he was driven, obsessed with, creating products that he loved to use, his family friends loved to use, products that he could be proud. Yet, Jobs was enough of a pragmatist to know that Apple needed to be profitable. When he came back and took the helm at a bloated and almost bankrupt Apple, Job was ruthless in making tough decisions including cutting product lines, distribution channels and firing employees that did not meet the standards/requirements set by Jobs.

Where did it customer-centric as ‘for the sake of contributing to / enriching lives of customers’ originate? As far as I can tell there are two sources – the Scandinavian school of relationship marketing and the Services school coming out of the USA. I am thinking of the likes of Gronroos, Berry, Parasuraman, Heskett, Sasser, Zeithaml and Bitner. Read through this literature and you will come across moral values and considerations, including customers as ends in themselves and not just simply means, even if they are well disguised. Why disguised? I say because these guys were seeking to get traction and influence the powerful ‘hard’ types in business.

Why it is that your organisation is not customer-centric even if it is customer centric and how it explains the lack of authentic customer loyalty

By now you should get why it is that one person can say that an organisation is customer-centric and another person can say that this very same organisation is not customer-centric. And they can both be right, be speaking ‘truthfully’: one is talking about/pointing at customer-centricity as means and the other is speaking about /pointing at customer-centric as ends where the ends is for the sake of contributing to / enriching the lives of customers.

According to surveys, executives consider their companies to be customer-centric and yet few customers consider companies to be customer-centric. The executives are standing in the clearing customer-centricity as means and customers are standing in the clearing customer-centricity ‘for the sake of contributing to / enriching customer lives’. So is it any surprise that standing in two different spots they see very different views and come up with different answers?

I say that vast sums have been spent in the name of customer-centricity and they have not delivered the promised land. Why? because companies have continued to play the same game (the profit motive) and simply changed the means: customer-centricity as means. They are not at fault. They have been encouraged in following this path by legions of marketing theorists, business strategists, consultants and technology vendors. Yet, this path can never lead to the promised land. Why?

Because when the customer talks about a company being customer-centric he is talking about and pointing at a company that shows up for her as being in business ‘for the sake of contributing to / enriching the lives of customers’. And so few companies are playing this game.

Let me tell you a story

An angel disobeyed God (so goes a story by Tolstoy) and is punished – thrust naked into world, a churchyard of a small Russian village. A poor cobbler passing by, ignorant of the angels divine origin, saves him from freezing to death; gives him clothing, food and shelter; and keeps him on as an apprentice. Several years pass.

Then one day this fallen angel smiles in such a way that his face radiates an extraordinarily dazzling light. The cobbler begins to wonder about his guests origins and asks him why such a radiant light shines about him. The angel then reveals himself for what he is, explaining that the only way he will be able to go back to Heaven is to learn what people live by.

He says that his understanding had begun when – having turned into a man – he was rescued from freezing in the churchyard. Now, continues the angel, he has finally realised that human beings cannot live each for himself, that they are necessary to one another, and that love is what they live by.

And finally

As customers we may not want relationships with companies, with businesses. Yet we can tell when we are loved. When it occurs to us that a company, an organisation, loves us then we cannot help but form a bond, an attachment with that company. When I think of such bonds of attachment I think of USAA. It occurs to me that this company does exist for the sake of contributing to and enriching the lives of its customers – military personnel and their loved ones. Clearly customers ‘feel the love’ and reward USAA with their loyalty. Which may explain why USAA is the leader/the exemplar of customer loyalty in the categories it operates.

Do you love your customers? Do you love your customers like USAA does? Or do you love the profit motive and fake love for your customers?

Republished with author's permission from original post.

Maz Iqbal
Experienced management consultant and customer strategist who has been grappling with 'customer-centric business' since early 1999.


  1. Maz, I really enjoyed your post. Customer-centricity is not an easy term to pin down. I think every organization needs to define it individually, because it seems unlikely that there will be a consensus from all of us “experts” !

    I think you’re right that the vast majority of companies see customer-centricity (or customer focus) is a means to an end. It’s in effect a way of “managing” customer relationships to achieve the company’s goal.

    Some approach it in a data/process improvement way, and try to optimize customer value to the company (CRM). Others focus on customer interactions (CEM). But the goal is more revenue and profit, either short term or long.

    But even if these approaches to customer-centricity “pay off” it’s far from clear that customers will recognize the company as customer-centric. In my view, the company’s actions must create genuinely loyal customers for this to happen.

    Conventional CRM initiatives generally don’t impact loyalty very much, so this leads to a likely gap: company thinks it’s being customer centric, but the customer doesn’t.

    CEM initiatives are more likely to have a loyalty impact, provided they’re really done “outside-in” with the intent of improving CX, and not just a renamed CRM project designed to optimize touchpoints. But still, there’s usually big gap between company intention and customer perception.

    The “moral” approach you have advocated is practiced by a rare few companies like USAA. But what is the moral obligation of a company like Amazon.com which just sells stuff online? Founder/CEO defined customer-centricity simply: “Listen to the customer + invent for the customer,” according to Bill Price, former global VP of Customer Service in the early days of Amazon.com.

    Watch this video where Bezos outlines his approach:

    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 wont 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”

    Does Bezos love customers? I don’t really know, but I think he leads Amazon.com to deliver products and experiences that cause customers to love Amazon.

  2. Hello Bob

    For me the central question is this: customer-centricity for the sake of the short term profit motive (to make the numbers) for customer-centricity for the sake of customers and long term competitive success.

    Listening to Bezos, I am clear that irrespective of whether or not Bezos loves his customers, Bezos is going about running Amazon in a fashion which allows Amazon to show up as customer-centric in the lived experience of Amazon customers. That matters because it is the customers whose perception and voice on customer-centricity counts due to internet as soapbox for anyone/everyone.

    The points that grabbed my attention were:

    Inventing on behalf of customers. Notice the ‘on behalf of’. That is like me arranging my weekend on ‘behalf of my wife and children’ so that I am there to help them with that which matters to them.

    Put customers first and think long term for payback to the shareholders. That is exactly what I do when it comes to my children. I put them first and expect that the payback is the quality of our relationship over the longer term. That is what I do with my clients. I put their needs first and hope that they will reciprocate:most do, some don’t.

    Finally, my experience with Amazon shows that Amazon does care about me. I have found it easy to return stuff. And the one time I really needed Amazon to help me out – the travel books had not arrived – Amazon helped me out. The call centre employee did not dispute with me. HE did not quote policy. He listened to my situation. And the promised me that I would have the missing books the next day. The next day they were there.

    Put differently, Amazon is like the cobbler in the story seen through Amazon’s actions (as opposed to beliefs, sentiments). The cobbler clothed the fallen angel, provided shelter, clothes, job. Amazon does the same: is there through multiple device, has huge range of products, makes it easy for me to buy, allows me to buy for suppliers who are cheaper than Amazon, tells me when the products will be delivered, delivers them before that date, allows me to track the status of my orders, cancel orders easily, return goods…..

    As always it is great to hear your views. And I thank you for sharing that link to Bezos.

  3. Great post and comments, thanks! However, some question mignt be still open. This ‘love’ to customers, – it looks like something being deeply inherent. So, does it mean that an ‘average’ company that does not have such inherent feeling is not able to be really ‘customer-centric’? And if you do not accept the term ‘customer’-centricity’ what do you propose instead of it?

  4. Hello Alexandre

    When the management of an organisation care about customers and creating genuine value for customers then this caring is contagious. It infects the whole organisation. That caring oozes out at every interaction, every touch point. Where there dips failure to care there is genuine remorse and action to make things right. I call this kind of caring love. And rare is the organisation that practices it. Hence, what passes for loyalty is simply familiarity, convenience and the flight from fear to safety of big brands, established names.

    If you live for / act for the sake of making the numbers then you are short term profit centric. Why? To please the financial analysts that determine he share price. Why. To safeguard your job, your position/status and increase your wealth. So you can call this short-term-profit-centricity. You can call it shareholder-centric. For you can call it business as usual.

    What term do I propose? Business as usual disguised as customer-centricity. Or profit-centricity through smarter customer management.

    All the best


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