Customer Centricity – Alive and Kicking?

Yesterday, I had a somewhat lengthy debate with someone on LinkedIn relating to an article they posted called “Is Customer-Centricity Already Irrelevant?”. The thread of the discussion can be viewed here.

By the end of the discussion, we had largely agreed on many of the points of the debate; however I still believe that there is a major difference of opinion about what Customer Centricity actually is. His argument was along these lines:

“Customer-centricity is a halfway point between win-lose favoring sellers and win-lose favoring buyers, with the latter being a place business absolutely doesn’t want to go. So in a sense, business (at least enlightened portions) created customer-centricity to stop customers from “crossing over to the dark side.” But a sizeable percentage of customers in developed economies have already pierced the customer-centric line of defense – and have crossed over. And a lot more are coming. 

The consequence? Companies have to be prepared to become “customer-reactive” and deal with customers who don’t give a rat’s a** about whether or not sellers survive. Very different business model than customer-centricity.”

My view of customer centricity…

…is fundamentally different. My response to his post was as follows:

I think that you’ve maybe got a different (or dare I be as bold as to say wrong) view of Customer Centricity.

I came into Customer Experience from a marketing background and many principles are relevant in both disciplines. First and foremost, you need to consider targeting the right customers. If the customers you are doing business with don’t give a rat’s ass about whether you survive or not, then you’re targeting the wrong customers.

At the end of the day, this type of consumer is simply dumb. If they screw their seller to such a degree that the seller goes out of business, then they can’t get their favourite product or service any more, which is pretty self-defeating. You could argue that the customer then just moves on to the next supplier; however if it is so easy for them to switch between suppliers; then you didn’t have enough to differentiate your product/ service from the competition in the first place.

Customer Centricity is all about how the organisation views the customer…and to a degree vice versa. Companies typically see themselves in the same way that you might draw an organisational chart/ organogram – split into functions (e.g. Sales, Marketing, Customer Service, etc.) and levels (e.g. entry level, junior management, middle management, etc.).

However the way the customer views the business is completely different. They see it cross-functionally. Their first encounter is with an advert (from Marketing), then with a sales person, then with a customer service person, etc. The customer views the organisation “across” the functions from a process-orientated (rather then functionally-orientated) perspective; and expects a consistent and joined-up experience irrespective of which part of the business they are dealing with.

The problem with the organisation taking the “organisational chart view” of itself is that it is highly unlikely to establish the consistent and joined-up experience expected by the customer across all its functions. This is where Customer Centricity comes in….

Customer Centricity is all about building your business around the customer view. Most companies that are focusing on Customer Centricity are doing so in order to try to create a better experience for the customer, not to (potentially) put themselves at a disadvantage, as your note above implies.

I don’t think we are dealing with an age of very difficult consumers, rather an age of increasingly frustrated consumers. People are not deliberately sabotaging business, rather their expectations are much higher (as a result of experiencing service from providers who are getting it right) and they are prepared to beat you over the head if your service doesn’t match up. This is perfectly reasonable. If the competition can get it right, then so can we.

Customer Centricity isn’t about “the Customer is King”, which is pretty much an outdated mantra. Nowadays the mantra has changed to be “the Customer is King…as long as the business can generate a profit over time”. This is where the principle of CLV (Customer Lifetime Value) is so important.

The CIM definition of Marketing has a very similar view on the whole matter:

“Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably””

A lengthy debate continued, at the end of which we had agreed to agree on a number of different fronts; however coming back to his initial post, I still disagree with the basic fundamentals of his argument. This is the first time I have ever seen the concept of customer centricity positioned as a means of maintaining the equilibrium between the ‘good’ of the company (ability to make a profit) and the ‘evil’ of the consumer (the desire to drive down price and put the company out of business). I believe this takes a very cynical view of the consumer.

There is no doubt that the arrival of the internet and phenomenon such as price comparison websites have, to a degree, driven increasingly price-orientated purchasing behaviour; however I see this being more to do with supply & demand principles than anything else. If you can buy identical products from two different sources, then you would typically buy from the source that offers the cheapest price overall. Why pay more for the same thing?

However, in practice, we know that this is not always the case. Often we are prepared to pay more for faster delivery, extended guarantees, gift-wrapping services, etc. Furthermore, there are certain companies that manage their supply chains and brand positioning so well, that even in an economy where the buyer holds all of the cards, the company is able to maintain a high price and still stimulate extremely high levels of demand. Apple’s launches of their iPhones & iPads are a perfect examples of this.

The vast majority of Apple fans simply don’t attempt to beat down Apple on price by threatening to buy a Samsung instead. The key to Apple’s success is successful positioning on the basis of clear differentiation between themselves and the competition. Apple consider the totality of the marketing mix (all 7Ps) in terms of establishing a clear, distinct and (in the view of most of their customers) better experience for their fans.

I still see Customer Centricity as a means of alleviating customer service/ experience frustrations by re-positioning an organisation around the customer’s view of their business.; not as a means of balancing the jing and jang of the relationship between the timid organisation and the ruthless customer!