I have been thinking that the term ‘customer centricity’ is totally meaningless. Like strategy there is no shared agreement nor definition nor theoretical foundation for ‘strategy’. So the coin of strategy has become debased – people in business use it whenever they want something to sound important. I believe the same applies to customer centricity.
Thinking further I can distinguish various flavours of ‘customer centricity’:
Website personalisation (usually through a platform like ATG)
- In this instance, customer centric means that we push content to you that either you have declared that you are interested in (preferences) and/or we believe that you are likely to find interesting. The Amazon website is a great example of this.
Direct marketing on steriods
- Within this school, the emphasis is on collecting as much data as possible on customers (demographic, psychographic, behavioural, transactional…) turning this data into targeting list – those customers most likely to buy the product that I am interested in selling – using data mining techniques to build predictive models.
Customer lifecycle marketing
- Here customer centric means pushing out the right flavour of communication to the right customers at the right time. And it involves taking a time perspective: where is the customer in his journey and what communication makes most sense. This flavour also relies on collecting lots of data on customers. And it more likely to be practiced where an organisation has a broad range of products that can be sold to the customer. It is also more likely to be practiced where the customer has to be kept ‘warm’ because of a relatively long interval between purchases.
Prroduct development / user experience design
- Here the emphasis is actually on spending time with customers (or the people who we want as customers) to really get these people. How they think, how they behave, what outcomes they are after, what gets in the way etc to design better products and better interactions between the customer/user and the product – in some cases the product is the website / virtual store.
- As customer service is viewed as a cost by many organisations, here customer centricity can mean “How do we recoup some of these costs by using inbound interactions to sell stuff to customers?” Or it can mean how can we get the most value from our contact centre agents by having them make outbound sales centred calls when they are not busy
dealing with inbound contacts. Often it means how can we reduce costs by getting the customers to do the work of agents: drive them to the website or the IVR.
- The organisations that push the envelope here – very few - view customer centricity as learning what drives calls to the contact centre and using this insight to effect change in the business operations that are failing the customer and thus driving demand into the contact centre. They get this is win-win proposition: the company has a great opportunity to cut costs and improve the customer experience if business operations are redesigned.
- This flavour has not yet crystallised. Nonetheless, customer centricity here tends to mean a focus on interaction design in the form of ‘moments of truth’ and ‘experience as theatre / entertainment / engagement’.
I am sure that there are more flavours. What I find interesting and which I wish to point out is that it can be argued that none of these flavours constitute ‘customer centric’.
It can be argued an organisation that is customer-centric is an organisation that is hell-bent on creating superior value (economic, interactional, emotional, social) for its customers. It is an organisation that is willing to sacrifice short term gain if it is at the expense of customers (‘bad profit’) to create long term sustainable gain (‘good profits’).
Do you know of an organisation that is practicing this last form of customer centricity? If you do then please share with me.
If you take the time to read the articles that gave rise to the “Relationship Marketing”, “CRM” and “Customer Experience” movements there are a number of principles that lie at the core:
- Work relentlessly to create superior value for your customers;
- Treat different customers differently because different customers have different needs;
- Treat different customers differently because you cannot afford to spend the same amount of money on ‘Economy’ customers as you can on ‘First Class’ customers – to use an airline metaphor;
- Treating different customers differently includes adjusting your actions towards the customers on an ongoing basis as you learn more and more about them – some called this customisation, websites call it personalisation, others understanding it as tailoring your actions to suit the person in front of you; and
- If you do this consistently and better than your competitors, your customers will continue to do business with you even when they are offered ‘incentives’ (usually in the form of price discounts) to switch to your competitors.
The interesting thing about human beings is that we cherry pick – we take what we like and completely discard the rest. It is as if you are given a recipe for a great dish and you select some of the ingredients and just throw the others away because they disturb you in some way. As a result of this, too many companies – but not all, have come to understand “relationship” in a totally self-serving way. If they were being truthful they would write a letter along the following lines:
Welcome to Big Corporate, we are delighted to have you on board. We are not like Apple. We don’t disrupt industries; we do not even come out with must have products; our service levels are also pretty ordinary as we do the minimum we can get by with to keep a lid on costs. The reality is that we are pretty much like everyone else who competes for customers in our category.
Over the last ten years or so our world has turned upside down. And it is all down to the Internet – it has given you shoppers the upper hand. Not only can you compare prices easily, you can also share your voice with millions around the world and listen to your fellow shoppers instead of our corporate speech: our advertising and PR.
So we listened to the Relationship Marketing and CRM folks. We have bought into this in a big way and invested many millions in the software that will enable us to build a relationship with you. Why is that important you ask? Well if we build a relationship with you then we get to make more money, more profit!
Let me explain what we mean by “relationship”. We are thinking along the following lines:
- We will get as much data on you as possible – anything we can get away with legally;
- We will use that data to figure out what we can sell you and then we are going to send you letters and emails to encourage you to buy what we think you are up for buying;
- If you do not respond the first time then we will give it another go and then another go;
- We will offer you these products at a higher price than the price that we are offering people who currently do not do business with us;
- If your existing product, policy or subscription comes to an end then we will send you a renewal reminder that is some 30% higher than you could get if you were to sign up as a new customer through our website;
- We want you to fit in with the way that we work, the way we do business;
- We are expecting you to do more of the work yourself so it would be great if you were to go to our website and help yourself and if you do manage to call our Customer Service line then we expect that you will use our IVR to help yourself;
- If you do manage to get through to one of our agents then we cannot guarantee that we will be able to sort out your issues there and then. If we cannot sort out your issue then we expect you to ring back on another day as our agents are not allowed to ring you back at a time that suits you;
- We really do not like complaints as we believe that we are doing the best that we can so we are going to make it as hard as we can for you to complain including insisting that you put your complaint in writing and send it via the post;
- Even though we are in the digital age we are not going to allow you a click to chat facility for when you are having problems on our website and need our help;
- Nor are we going to allow you to use an instant messaging system to get through to our agents;
- Whilst we do allow you to send email don’t expect the kind of response that you get at work. No, please allow at least two-day – usually more.
Now that I have explained what we mean by relationship we are really hopeful that you will be so satisfied that you will tell all your friends and family to become our customers!”
Here is the ridiculous part: no company would ever consider sending this kind of communication to a new customer yet that is what the customer will experience because that is how many companies operate!
The problem with Customer Experience is that the vast majority of people who are working in this area lack understanding and expertise in human centred design. As these people are often operate from an economic and engineering view of the world too often the customer experiences they design only meet functional needs – the neocortex.
What is rarely designed for is the emotional ( the way you make them feel) and spiritual (what you stand for in life) aspects. The stuff that really matters.
I had an example of that just today. I rang Customer Services, a young lady picked up the phone after a minute or so and then dealt efficiently with my request. All done – functional needs met. Yet, I left the call feeling the clinical coldness / efficiency of the encounter. In fact I did not feel that there had actually been an encounter at all: no human warmth, no sense of fun, no spontaneity. It reminded me of hospital: when I am in a hospital I simply want to get out as soon as I can as hospitals lack human warmth.
I believe that there is a movie that illustrates what I am talking about – it stars William Hurt and is called The Doctor. A customer experience designer can learn a lot from watching this film.
In pursuit of the sizzle too many companies especially those that are marketing communications driven forget the steak – the product/service the customer will actually experience.
Over 10 years ago I co-developed (with my fellow consultants) a customer relationship strategy for an established telco. This was a brand that regularly was perceived as having a poor quality network and this was in part due to weaknesses at the retail stores (taking on customers in areas that had a poor quality signal) and in the customer services function – this information came directly from the customer base.
If this was not enough spur to action there was information that showed that the customers of a MVNO (mobile virtual network operator) rated this MVNO very highly in terms of quality of network and in terms of customer service. Given that the MVNO was piggy backing on the infrastructure built and operated by the established telco, this finding should have been a wake up call to get the basics right: only sign up the right customers and then provide excellent service when customers rung Customer Services for help.
Instead of focussing on the basics, senior management were focussed on all things internet. Why? At the time the Internet was sexy and any company that had an internet strategy increased its share price, usually dramatically, overnight. Meanwhile, what really mattered to new and existing customers continued to take a back seat. And the smarter competitors continued to pull ahead and take market share.
In 2010, the situation has not changed much. Many companies continue to do the same: ignore the basics and focus on the latest in-thing. In the latest email that I have received from Drayton Bird (a direct marketing legend)., he shares the following story:
“Recently, after scrupulous research over many months, my partner Marta decided to buy a new flat screen TV, which she did through Amazon. They use Parcelforce – “proud winners of Business in The Community’s Healthy Workplaces Award 2006″, who also seem rather excited because “Hitwise have recognised our online developments this year”.
It’s good to know they’re all slaving away in such a splendid environment and such hot stuff on-line, though I wonder what exactly “on-line developments” are. It was their touching attention to things that don’t really matter to their customers that prompted my heading. Because if you want to talk to them there is even a text phone number for the Deaf and Hard of Hearing.
But what if, like Marta, you want to get a TV set delivered?
What if they’re so useless they can’t tell you even vaguely when it is likely to arrive – just any time between 8:00 am and 6 p.m. on a certain day?
And what if they couldn’t even get the day right – so you spend 10 hours waiting – and it still hasn’t arrived?
Then, what if the much-praised on-line developments tell you it’s just arrived at 7:34 pm – which you know is a lie because you and two other people are looking out of the window?
And what if after you (eventually) get a reply from somebody on the phone – during a call you’re paying for – which confirms that they do indeed only deliver – or in this case fail to deliver – between 8 and 6?
Well, you hang around the next morning till it does arrive.
Then you get an e-mail saying “Thank you for using our website” – with an apology, kind regards and of course details of the deaf phone number I mentioned, signed by an “Internet Advisor”.
Hey, guess what, Parcelforce? I don’t want internet advice. There are plenty of people like BT Broadband screwing me around on-line already, and they need no help from you.
I want you to deliver things. That’s all you have to do. That’s why Amazon (mistakenly, it seems) use you……”
To paraphrase one of my favourite characters (Richard Feynman): Reality must take precedence over public relations, for customers cannot be fooled.
I have often wondered about the folly of companies pursuing the new stuff (Relationship Marketing, CRM, Customer Experience, Social Media….) whilst neglecting to provide good service. Why? Because I know that my social circle uses service as the key dimension to choose between one supplier and another.
At the weekend I read my weekly copy of Marketing magazine and came upon a piece that talks to this point. Marketing teamed up with Lightspeed Research and Promise to undertake quantitative and qualitative research to figure out which brands customers are to recommend and which fail the grade.
The key point that this article makes is this “Brands spending millions on the above-the-line marketing are failing at the first hurdle when it comes to customer satisfaction”.
One of the paragraphs that jumped out to me because I have experienced this as a truth and so have many others is as follows: “The research reveals that even for product-driven companies, consumers comments are almost always focused on service. This means that the more inferior the service a brand offers, the lower the satisfaction score they are likely to get.”
The research found that the top 10 brands customers are likely to recommend in the future are: Virgin Atlantic, BMW, Mercedes, Samsung, Boots, Sainsburys, Eurostar, M+S, Toyota and VW.
The brands that ended up towards the bottom of the recommendation table are from the following sectors: utilities (Npower, British Gas, EDT, E.ON), telecoms (BT, T-Mobile, Talk-Talk) and financial services (Egg, HSBC, Barcalys, Lloyds TSB, NatWest, Virgin Money). Ryanair was second to last – and that is to be expected.
Here is another paragraph that struck me as worth sharing: “Promise recommends that all brands – regardless of sector – think of customers as human beings to interact with, rather than as an amorphous mass to be sold to.” That sentence says it all: companies need to balance out their obsession with selling (the direct route to the customer wallet) with good customer service (the indirect route to long term relationships, higher revenues and higher profits). I still find it amazing that after ten years+ of relationship marketing and CRM that the point needs to be made that customers are human beings and should be treated as such. I believe I wrote a post on that some weeks ago, here it is: Blind to the Obvious Part III
Another finding that is worth sharing is that “While many marketers have increased their focus on social media …..word of mouth remains by far the most important channel for peer-to-peer recommendations. Two-thirds (66%) of consumers make recommendations this way. In comparison, just 15% of recommendations are made via social networking sites.”
Promise, as a result of qualitative research, has put forward a list of 6 things that brands need to work on to deliver high customer satisfaction:
1. Be customer centred – that is to say look at the situation from the customer point of view and work on the assumption that customers are reasonable human beings. For example fit service around customers: “know what I said and calling me back when I have got the time. That would show me I’m really valued”.
2. Have superstar staff - apparently spending millions on TV advertising is not that smart if the brand’s staff don’t know and can’t advice customers on the basics of the product.
3. Delight the customer – exceed the post-purchase expectations: “when my flowers from Interflora arrived at my wife’s doorstep wilted, I phoned them and they sent me £50 vouchers. It was really good of them.”
4. Keep your promises – “I was on hold with my insurance company and then an automated message tells me it will call me back in 10 minutes – and you know what, they actually did.”
5. Sort out service recovery – my post on The Suites Hotel in Knowsley talks to this very point;
6. Build a relationship – being handed from one agent to another and having to start from the beginning each time is a real hassle for customers: “With BT you can never trace who you have spoken to and which country they’re in. There’s no relationship at all, it’s confusing.”
My take on this: I continue to be amazed at how the obvious (what we all know) has to be restated again and again in one form or another. Time and time again the critical importance of good service is highlighted. Time and time again this insight is ignored by many organisations as if this insight is too painful and has to be repressed.