Digging into ‘customer-centricity': what is the defining feature of a ‘customer-centric’ company?

My last post (a practical enquiry into service, customer experience and customer-centricity) generated some interesting conversations.  A particularly interesting conversation took place between Bob Thompson and me – you need to scroll towards the bottom and read the comments.  In this post I want to address the key question that Bob raised:

Customer-centricity is at least as vague a term as CRM and CEM. Is it a strategy? A state of mind? A loyal relationship?   Personally, I’ve defined “being customer-centric” as delivering value that customers care about. The end results should be more loyal customers.  But it’s not quite that simple. How do we explain the success of Ryanair, which offers a low-cost service, gets lots of travelers and makes money, but can hardly be said to have raving fans?

If you have looked into that conversation between Bob and myself you will see that I addressed the Ryanair issue.  So what I up for addressing is the question: what clues can you look for that helps you to distinguish a ‘customer-centric’ from a ‘not customer-centric’ company?

Is listening / responsiveness the distinguishing feature?

In this post Bob Thompson asserts that Starbuck is customer-centric because it listened to him.  Bob had an issues with his local Starbucks: “we started noticing that about 30 minutes before the store officially closed, employees brought the tables and chairs from outside and piled them up inside the store. Frankly, it made the store look like “we’re closing” and customers weren’t welcome.” So Bob wrote an email to Starbucks pointing out the issue, he got a response within 24 hours letting him know that the matter would be discussed with the store manager.  And then Starbucks acted on Bob’s email request: “Not only did Starbucks listen, they did something. Fast!  That evening, and all the evenings since then (I checked) the tables and chairs were left outside until closing. And what do you know, there were customers actually using them!

So my question is that if a company makes it easy for you to contact it, responds quickly to your contact and then sorts out your issue / gives you what you are asking for (like Starbucks did with Bob) does that make that company customer-centric?  From where I stand and view customer-centricity the answer is NO.  Why?

Think back to my last post and in particular the issue that arose between the customer and Joe the bartender. Joe acting in the best interests of the customer (including the customer’s wife and three children) refused to serve more alcohol to the customer.  The customer had an issue with this, he reached out to the company, the company gave Joe (the bartender) a telling off, fixed the issue and compensated the customer for his trouble by giving him two free drinks.  What was the end result?  The customer got heavily drunk, drove home, had a crash and died – taking three other people with him.

Purpose-Vision-Mission statements – do these help us distinguish a ‘customer-centric’ company from a ‘not customer-centric’ company?

When you read the following vision/mission statements I’d like you to be present to what emotions they evoke in you as well as what thoughts bubble up for you.   Let’s start:

Ryanair:  “Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service. Ryanair aims to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-containment and operating efficiencies.”

Yahoo!:  “Yahoo!’s mission is to be the most essential global Internet service for consumers and businesses.”

Microsoft:  “Microsoft’s mission is to enable people and businesses throughout the world to realize their full potential.”

Dell:  “Dell’s mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve.”

OK, now lets move on to a second set of companies.  As you read these mission statements please be present to how these land for you – what feelings and thoughts do these evoke for you?

Chick-fil-A:  “Chick -fil-A’s corporate purpose statement reveals the heart of our company: “To glorify God by being a faithful steward of all that is entrusted to us and to have a positive influence on all who come in contact with Chick-fil-A.” Chick-fil-A’s mission statement reveals our commitment to service: “To be American’s best quick-service restaurant.”

Southwest Airlines:  “The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.”

Amazon: “Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.”

USAA: “To facilitate the financial security of its members, associates and their families through provision of a full range of highly competitive financial products and services; in so doing, USAA seeks to be the provider of choice for the military community.”

Starbucks:  “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time.”

Virgin Atlantic: “At Virgin Atlantic, our mission statement is simple…To grow a profitable airline…Where people love to fly…And where people love to work.”

Did you notice the key differences?

Customer-centric companies are in a totally different league when it comes to the game that they are playing.  Did you notice that their mission statements:

1.  start with / draw attention to customers, what jobs they will do for their customers, what value they will create, how they will treat their customers?

2.  speak words that speak to human beings in terms of their ‘concerns’ as human beings: ‘glorify’,’ faithful’, ‘positive influence’, ‘service’, ‘warmth’, ‘friendliness’, ‘pride’, ‘spirit’, ‘dedication’, ‘member’s, ‘worthwhile satisfying employment’,’discover’, ‘financial security’, ‘competitive products’, ‘families’, ‘nurture’, ‘human spirit’, ‘love’, ‘people’..?

3.  are concrete, meaningful and even inspiring to customers (and employees) whereas the mission statements of the ‘not customer-centric’ companies are vague, amorphous, general and generally meaningless and uninspiring?

Customer-Centricity: being of service, enriching lives and contributing to a better world

From where I stand I am clear that the key characteristic that characterise and distinguish a ‘customer-centric’ company from a ‘not customer-centric company’ is that the ‘customer-centric’ company is playing a totally difference game.

The ‘not customer-centric’ companies (including those that espouse customer-centric rhetoric) see customers as tools, as instruments, as means for enriching the Tops and the the people who represent the shareholders. And within that context there is no consideration of the longer term, stewardship of the world that we live in, the dignity of our fellow human beings.  Anything goes as long as ‘rent’ is extracted from customers to line the pockets of the Tops and shareholders.

Under the rhetoric of ‘customer focus, customer experience, customer-centricity, customer obsession’ is the urgency to sell, sell, sell the products that the companies has to sell.  The customer rhetoric is there only because it has become hard to sell because customers are more demanding, more discriminating and their is a high level of competition. The whole edifice is built on fear, greed and the “I-It” orientation towards customers, employees, suppliers, partners, communities in which these companies operate.  In short, this is business as usual – the standard economic/industrial/organisation model that is in place today and accepted as best practice, the smart way to do business.

The ‘customer-centric’ companies are primarily coming from a context of being of service, of contributing to our fellow humans, of making a genuine and worthwhile difference to the lives of the people who touch and are touched by the company- customer-centric companies live a “I-Thou” orientation.   The Tops who founded and/or are running these companies get the importance of making profits.  Yet, that is not the purpose nor the mission of these companies.  To ‘customer-centric’ companies profits are like the air that we breathe necessary to survive and profits are the reward that customers/employees bestow on the company for the service that the company has rendered.  Profits are marker of the level of contribution they make.  And profits are the grain that can be stored today for when the ‘seven years of famine’ strike.

A warning or two

First warning: ‘customer-centricity’ does not necessarily guarantee financial success.  Customer-centric businesses can and do go out of business – all that is needed is a disruptive innovation.

Second warning:  you actually have to live up to the ‘customer-centric’ mission statement to be viewed as being ‘customer-centric’ by your employees and customers.  Starbucks espoused the mission but took all manner of actions that did not fit in with the mission to grow revenues and profits to meet shareholder expectations.  It got into a mess and the man who had formulated, fought for and lived the mission statement (Howard Schultz) had to come back, take over and turn around Starbucks – get the people in the business connected with and living the mission wholeheartedly.  Today, Tesco is where Starbucks was at.  It espouses a fine mission – “Our core purpose is, ‘To create value for customers to earn their lifetime loyalty’. We deliver this through our values, ‘No-one tries harder for customers’, and ‘Treat people how we like to be treated” - and it failed to live up to it for several years and is now paying the price.

Posted on April 16, 2012, in Case Studies, Customer Experience, Customer Philosophy, Customer Service, Customer Strategy, Leadership / Change / Transformation and tagged , , , , , , , , , , , , . Bookmark the permalink. 4 Comments.

  1. Maz, I see and understand the point you make about Mission statements, and I also agree whole heartedly that what you say and what you do are not necessarily the same thing. But I am still not entirely sure who you would regard as truly customer centric.

    Who is? And what is it they do? Is it definable?

    And does it matter? Do these companies out compete? If they don’t why should their managers bother?

    James

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  2. Hello James

    Great points. Let’s take your last point as it gets to the heart of the matter as I see it. As soon as you say “does it matter? Do these companies out compete? If they don’t why should their manager’s bother?” you point out everything that keeps companies exactly where they are when it comes to cultivating loyalty. That is why all the money spent on CRM has not increased customer loyalty.

    The question to really get to grips with is this one: are profits all that matters? If so then the truthful statement is to say that “we are profit centric”. Say it and get on with it. Stop wasting time in Orwellian speak: customer focus, customer-centricity, customer obsession.

    Greatness and the rewards of greatness do not result from a focus on profits and profitability. That is like say great cricket occurs as a result of a focus on the scoreboard. Great cricket occurs when you focus on the ‘that which creates / gives rise to great cricket’ – the people, the activities, the environment, the rules and fundamentally grappling with the question “What is the BIGGER PURPOSE of cricket? How does it contribute to the concerns of human beings? How does it lift up our fellow human beings? How does it contribute to be ‘good’ world?” Lets take a look at some examples:

    USAA: can sell more, make more revenue, make more profits by selling its customers insurance products that they do not need (upsell, xsell) and non-competitive products. USAA chooses not to do that because that course of action benefits the company at the expense of the customers. USAA does this because, given the context from which USAA operates, it is the right course of action. The customers may or may not reward the company through their loyalty. It just so happens that they do as reciprocity is built into human beings: one good turn deserves another.

    Starbucks: When Starbucks went against convention and increased its labour cost by doing the unheard of – paying part-time staff, the baristas, well and providing them with medical cover – it did so because Schultz/Behar believed it was the right thing to do. How/why? Because Behar convinced Schultz that Starbucks was/is in the people business not the coffee business. And if you operate from the context of being in the people business then you take care of people – taking care of people is the right thing. And yes, it does have a cost. Remember the Christians and the lions?

    Apple: do you think that Apple would have come out with revolutionary products if Jobs had been focussed on competitiveness and profitability? That is what his predecessors did and they drove the company into the ground. Jobs came back and focussed on insanely great products that he, his friends, his children, his family would be proud to own and delight in using. It just so happens that by doing this he created stuff that delighted us and so we reward Apple for that contribution.

    Do you need to define ‘customer-centricity’? I think there was a Judge who said he whilst he could not define pornography he knew it when he saw it. Robert Pirsig in his book Zen and the Art of Motorcyle Maintenance gets to grisp with ‘quality’ in a similar manner: defining it is fools errand. What matters is that in the normal process of living ‘quality’ shows up for us and that shows that ‘quality’ matters to us and that mostly it is absent.

    My point is that ‘customer-centricity’ does show up for people. It does. And the way that it shows up for ordinary people (customers, staff, suppliers, partners) has little or nothing to do with the way that the people working on ‘customer-centricity’ talk about it and act on it. You are perceived as ‘customer-centric’ when it comes out loud and clear that you are acting from the context of doing what is best for customers. And customers can accept that you are refusing to give them what they want, would like to have, if they get that this refusal is out of the concern, care for their best interests.

    James, lets not kid ourselves, you and I know what is and is not ‘customer-centric’. Do you have children? Then if you are truthful you know when you are being/doing from the context of what you honestly believe is in the best interest of your child. And you know when you are not. And you know when you are not yet pretending and claiming that you are acting in their best interests, Right?

    All the best
    maz

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    • Thanks for your reply

      Your point about my children (2 of the horrors) I think defines it.

      For me it is dis-ingenuity that is the problem. Say what you like about Michael O’Leary at least he never claims to be customer centric. You know exactly where he stands

      James

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  3. adrianswinscoe

    Hi Maz,
    Great post and discussion with Bob. Thank you also for the reminder of Pirsig’s pursuit of quality. It may be that pursuing a definition of what customer centricity is may be a fools errand as it may mean different things to different people in different contexts. Therefore, perhaps a more useful pursuit may be to define what it is not. That way we can pursue not just a fixed point or definition but more of a domain that we are working towards or are heading towards.

    Adrian

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