Who says you have to be customer centric to thrive?
Is it feasible that companies are not customer centred because it is possible to thrive without being customer centric? Before you dismiss this out of hand consider the following examples.
Mary Portas: Secret Shopper – last nights episode on the furniture industry
On Wednesday I watched the tv program Mary Portas: Secret Shopper which took a look at the furniture retailing category and found that it was anything but customer centric.
The marketing across the category is either misleading or downright deceptive. There is one kind of sale or another on almost around the year. The discounted prices on the furniture are nothing of the kind. And the price guarantees are absolutely worthless because the retailers know that it is simply not possible for the customer to buy the same product from another retailer.
The focus of the sales staff is selling irrespective of whether the furniture meets the needs of the customers. The sales folks even convinced themselves that they were customer centric when it was blatantly clear that they simply did not get what it means to be customer centric: to put yourself in the shoes of the customer and thus help the customer to make smart purchasing choices that they will be happy with – no buyers remorse when they got home. In fact it can be argued that the sales folks were doing rather well by not being customer centric: one of them claimed to have earned £57,000 in commission just through standard selling.
Management simply wrote off the people who felt aggrieved about poor quality of the furniture and the poor customer service. Yet despite the negative reviews on the internet on CSL (the furniture retailer featured on Mary Portas: Secret Shopper) I do not see it closing down because customers are running to its competitors. Why is that?
Because all the furniture retailers are at it. They are all misleading customers with their marketing and price promises. They are all getting customers to buy whatever makes the most commission for the sales folks. And they are all offering poor customer service. I believe that I wrote about how easy it is to become customer centric by disrupting category practices
comes 8th in the latest Which? customer satisfaction survey
Tesco is the UKs most successful supermarket brand. You might then assume that it would rank highly in any customer satisfaction survey. Well Which? polled 12,000 consumers and placed Tesco 8th with a customer satisfaction rating of 48%. Aldi scored 65%, Lidl scored 64%, Morrisons scored 59%. You can find the full details here.
Does this mean that you can thrive without being customer centric? Or does it mean that there is little or no correlation between customer satisfaction and financial success? Perhaps it means that the Which? survey is flawed. You decide.
BSkyB goes from strength to strength
As far as I am aware BSkyB is not a brand that is loved by consumers. My own experience of dealing with BSkyB was less than positive. And yet BSkyB keeps going from strength to strength. Recently it announced that at the end of 2010 it had over 10m customers (thus hitting one of the key targets) and half-year profits were up 26% on last year.
Is it possible that BSkyB is thriving because it has an effective monopoly on pay tv? So if you want what Sky has then you have to go and buy it from Sky. That is to say that BSkyB owns strategic assets that allow it to deliver less than great customer service. I believe I wrote a post on the value of strategic assets.
Is it because it has branched into adjacent areas: telephony and broadband? Is it because it offers bundles (pay tv, telephony, broadband) that other players find hard to match?
Or am I wrong and BSkyB is a great example of a customer centric organisation?
TalkTalk continues to be the second largest broadband provider.
TalkTalk is the UKs second largest broadband provider. The negative reviews posted on this company by customers are legion. It is a company that was investigated twice by Ofcom (the industry regulator) last year as a result of customer complaints. And Ofcom found it guilty of breaching telecoms regulations when it charged customers for cancelled services.
If customers are so dissatisfied then why is it that TalkTalk has not collapsed? Or at least shrivelled significantly?
Is it because they are locked into existing contracts? Or is it because far too many customers simply are not willing to go through the inconvenience of switching broadband suppliers because they consider them to be pretty much the same. Does this remind you of the furniture retailing example that I started this post with?
Posted on January 28, 2011, in Case Studies, Marketing, Sales and tagged Aldi, broadband, BSyB, CLS, CLS sofas, customer satisfaction, customer-centric, furniture, Lidl, Mary Portas: Secret Shopper, monopoly, Morrisons, strategic assets, supermarkets, TalkTalk, Tesco, Which?. Bookmark the permalink. 5 Comments.