Skeptical musings on ‘treating different customers differently’ and the expertise of business gurus
Posted by Maz Iqbal
You may know that I value skepticism in the sense of questioning the taken for granted. In this post I question the central tenet of the customer business. And I question the insight and expertise of customer gurus and management consultants. Let’s start with the central tenet.
What is the right basis for treating different customers differently?
If there is a central tenet of the whole customer business (CRM, CXM, customer retention & loyalty) then it is this: treat different customers differently. How does that work in practice? There are two options: you can treat different customers differently based on their needs or based on their financial value. Which should take priority?
Imagine that you are in pain doubled up in the waiting room of a hospital emergency room. It is late at night during the new year holidays and there is a shortage of doctors. So there are some ten people there with you in the waiting room – each of whom is keen to get seen to quickly. What basis should be used to decide who gets access to the scarce/valuable ‘resource’ (the doctor) next? Should the basis be first come first served? Should it be the person who is in most need of urgent attention because his/her life is at risk? Should it be the person who is willing to pay the highest price – the one that represents the most financial value? What do you say?
What would the ‘customer guru’ say if he was to act consistently with his business philosophy? He would say that if the hospital is a business then the people in the waiting room should be divided up (segmented) first by their financial value (to the hospital) and then by their medical needs. Which means that the person who is going to make the most money for the hospital and who is most in need of urgent attention should be the next one to get to see the doctor.
What actually happened? I was that person in the waiting room doubled up with pain. And the lady next to me was in a lot of pain as well. We were talking and complaining about the shortage of doctors, how slow the process was, how long we had been waiting – over an hour. We both hoped that we would get seen to quickly – ideally next. Then a mother came in with a young child who was clearly in a lot of pain. What was our reaction? Both of us were adamant that the young child had to be seen next and seen immediately; we forgot our pain, we no longer thought about ourselves, our humanity reached out to that young child who was suffering so much! And I noticed that all the other adults in the waiting room forgot themselves and collectively we gave one big sigh of relief when that young child was taken to see the doctor after a couple of minutes. Clearly, the hospital got this because they were seeing us on the basis of our need – how serious our condition was. And that is what allowed us all to bear our pain and go with the system: the system occurred as fair, as just – as one that does justice to human dignity.
I hope that you get what I am getting at here. If you do not then let me spell it out for you. What the ‘customer gurus’ espouse contradicts certain ingrained values that go with being human. Most of us have a sense of ‘right’ and ‘wrong’ including that which contributes to our human dignity and that which takes away from our human dignity. Visibly treating different customer differently is a minefield because it brings out into the open the question of human dignity. It occurs to me that only people who are not called to by these values are economists, MBAs, business gurus and management consultants.
Why you should be skeptical about business gurus and management consultants
First and foremost, I say, you should be skeptical of any business guru and every management consultant. Why? Because business gurus and management consultancies are in the business of passing of philosophy as science, as scientific management, as truth, even if they are not aware that this is what they are doing. Put differently, when you take a thorough skeptical look then you find that the business gurus and management consultancies are like the king who was not wearing any clothes – it just took a child to see it and call it.
At his point, I wish to introduce you to Colin Shaw because has written a post that has generated high emotion. Colin is the CEO of Beyond Philosophy – a customer experience consultancy which makes a big point about the importance of tapping into the irrational side of customers and says it has a scientific proven method for doing so. On LinkedIn Colin describes himself as “Author 4 Customer Experience books | Consultant | Customer Retention & Customer Loyalty | Keynote Speaker”
His latest post hasn’t got the kind of reaction (comments) that he was expecting. I think it is fair to say he shows up as being totally surprised by the reaction as expressed through numerous comments many of which are not supportive of him and his point of view. Which occurs to me as interesting given that the heart of all things customer is a good grasp of the human condition. Colin starts off his latest post (Missed opportunities to identify high value Customers – Virgin Atlantic Case Study) with the following:
“I fly a lot. I have Diamond status on the Delta airlines loyalty scheme, the highest you can get. I really fly a lot! On my briefcase and all my bags I have the Delta Diamond tags. This is like wearing a beacon that says ‘this guy flies a lot’!
My question is, “When I fly with other airlines, do they ignore this display that says I am a high value Customer and could be one of your best customers?” It seems that my badge has the cloak of invisibility as everyone ignores it. Why?
Back in my past career, when I used to run call centers, I remember saying, “Wouldn’t it be great if we knew how much potential revenue the caller could spend with us”. The reality was if I knew someone could spend $1m dollars I would treat them differently to someone that could only spend $10. Airlines seem to ignore this in the choices they make when designing their Customer Experience. This is a lost opportunity.
Let me give you five examples from a recent experience with Virgin Atlantic on how they are missing these opportunities:”
What kind of reception did this post receive? An emotional one! A human one, that discloses reality as experienced by the ordinary airline customers: the lived experience rather than theory. Allow me to share some of the comments that showed up as particularly interesting:
1. “Welcome to the real world Mr. Shaw!”
2. “is this dude serious?”
3. “Colin…here is part of the issue that people are having with your rant. I also fly quite a bit, but simply not enough to get this kind of status. When I go to the airport, I have to wait in a security line while people with “status” have their own priority line, and the airport decides that having the two lines converge on the same TSA agent is a good idea. This means that people without status feel that they are being held up because you have your fancy Delta tags. Then the boarding begins and they do the same thing…..put lines converging on a door where people with status move to the front and cause others to wait. Then there is me – a frequent flier who is in the airport enough to hate travel, and not enough flights to get the airlines to recognize how unpleasant it is to travel…..A significant part of that unpleasantness is the fact that I have to be put aside by a wave of people like yourself who have that level of status. Think about every other industry where status matters. Credit cards offer status to high value customers, but recipients of the cards do not inconvenience other card holders when they make a purchase, so no resentment exists. The backlash you are feeling is from people who have to witness and be inconvenienced by what we all know you deserve. Virgin should take care of you, but not at the expense of other travelers.
4. “Wait, it gets better. So now (in your clarification) you’re saying that Virgin could buy your loyalty back by putting you in a shorter check-in queue, and giving you a $48 rebate on your excess baggage, and accepting responsibility because you had lost your headphones? So, not only are you arrogant and self-important, you have no brand loyalty – Delta should value their relationship with you so highly that they treat you like a king, but you value YOUR relationship with Delta so little that after years of good service, upgrades, priority check-in, etc. you’d defect to Virgin for $48 and a check-in queue that is 3 minutes shorter. In other words, for you brand loyalty is a one-way street. As one of the previous comments asked, who exactly do you consult for? I bet they’d be interested to know your new views on asymmetric brand loyalty, and on exactly what can be bought for $48 and 3 minutes…… Then, in your next follow-up, you suggest that you should be treated better than other economy class passengers because you travel more often! So now you’re expecting Club Class treatment while flying economy! Amazing! I drive far more than average, should I have a booklet of “get off with speeding fines” vouchers, or my own special lane as a reward for being a frequent driver? With each post your position sounds more and more ridiculous. Please, stop digging, it’s becoming embarrassing.
5. “Over 700 million a year fly a year. What makes you any different? Are you military flying back and forth from deployments? No I didn’t think so. Those are the only people that deserve to be treated like royalty when flying. Though I’m sure you’ve given up your first class seat multiple times for a military member haven’t you. No, I didn’t think so. Should people that ride the bus to work on a daily basis be treated better than a person who only rides it occasionally? Did you once think why they have to limit carry on size? Maybe they have calculated the capacity of the overhead storage and this allows all customers to be able to store the same amount of carry on luggage. Its ok cause you fly so much everyone else should have to suffer so you can carry your oversize bags. I bet that $48 dollars will make you think twice before trying to carry on a small suit case next time. Then again if your so high value, I’m sure $48 is pennies to you People try to do this all the time, carry on large bags to avoid waiting at the luggage belts. I fly with Virgin anytime I fly home to the UK with no complaints. Then again I don’t expect to have my A#$ kissed everytime I fly. If thats what your looking for, maybe you should be looking at different services. 2 christmas ago I got stuck in London due to blizzard that hit the east coast of the U.S. While other airlines had their customers sleeping on air port floors, Virgin paid in advance for hotel for 3 nights and even paid 75% of my expenses. Its funny you pick Virgin to bash on when customer service is so terrible and a lot worse in so many other services. Have you tried to call your cable recently or tried making a large purchase at Best Buy during the holiday season? Try bashing them for not bowing down before you go after airlines.”
6. “”Try replacing the word airline with wife/husband/partner. I used to take her out to nice restaurants, go on romantic holidays, buy her presents. Then I left her for someone closer to work. The other week I thought I’d pop round to see her. With my new kids. Showed her pictures of us on holiday. And then (and this makes me really angry), she says she’s moved on!!”
7. “You seem to be a very important man. How disconnected from real life you must be…”
I say that if you want to excel at the game of Customer then cultivate the human. My experience is that to excel at the Customer game one has to have an intuitive feel for the human in the human being. How do you do that? By putting yourself into real, commonplace, human situations and being present to what shows up for you. By reading the right kind of literature – that means avoiding business and management books!
I say be skeptical about any advice coming from Tops, business gurus, management consultants, MBAs and economists. Why? They are disconnected from real life – the real world experienced by most of humanity, most of your customers. And, like all philosophers they fall so in love with their philosophy that he forget that it is just philosophy – at best a partial view of reality. I really do believe that Colin Shaw thinks that he is not doing philosophy and that is why he has called his business Beyond Philosophy.
Please note, I have only used Colin Shaw and Beyond Philosophy as an example to illustrate a point simply because this landed on my lap at the right time. Recently, there was the much publicised demise of The Monitor Group a strategic consultancy established by the king of strategy (Michael Porter). Which is my way of saying that I am talking about academics, consultants, gurus and not any one single person or organisation.
What do you say?
Posted on December 14, 2012, in Case Studies, CRM, Customer Experience, Customer Insight (inc VoC), Customer Loyalty, Customer Philosophy, Customer Service, Customer Strategy, Social and tagged Beyond Philosophy, business gurus, Colin Shaw, customer experience, customer experience gurus, customer loyalty, customer retention, customer service, customer strategy, Management consulting, the monitor group, Virgin Atlantic. Bookmark the permalink. 17 Comments.