Does your map correspond with ‘reality’?
We never live in the ‘real world’. Each of us lives on our own personal map of the real world; groups live in their map of the real word; and cultures are deeply enmeshed in their cultural map of the real world. To the extent that these maps are a good with the ‘real world’ then our actions produce intended results. If you twist this around then you will find that if you are doing stuff and not getting the intended results then it is highly likely that you are using a map that does not have an adequate correspondence with the world. Let’s take a look at how this applies to the world of customer-centricity, customer experience and CRM.
Many established businesses have an inadequate map of ‘customer-centricity’
Imagine the following scenario. My 11 man soccer team is on the pitch and it is divided into four groups: goalkeeper, defence, midfield, attack. I come to the realisation that my team is not delivering the intended results or that there is a risk that it is not likely to do so. So I have instructed the groups and the team to change and I may even have hired experts to help me bring this about. You come along and see the goal keeper is busy moving the goalposts to make them goal smaller. You see that the defence is busy being replaced with fewer and cheaper players who are on someone else’s payroll (‘outsourcing’). You see that the midfielders are busy learning a new method of passing the ball. You see that the attackers have been told to follow a new method and use new technology: high-tech boots that promise to help them run faster. And so forth.
Then you laugh out loud. Why? Because you see the absurdity of the situation. At one level, what I am doing / what my team is doing / what my hired experts are advising makes perfect sense. Yet, at another, more important level it is just absurd. Why? Because you get that the game has changed. You get that we (me, my team) should be on the rugby pitch playing rugby – a completely different game! You see something that I do not see. You see that I think I am playing rugby and I am not!
That is exactly what is happening in the business world when it comes to customer-centricity and customer experience – the same old companies continue to be an exception. Allow me to make this real by using just one example.
Lets take a look at ‘customer lifetime value’
Lets, consider customer lifetime value. Companies that have jumped on the customer focused bandwagon have spent considerable sums in developing ‘accurate’ customer lifetime value models. Those that have not are busy doing so or refusing to do so because it is not possible to come up with a lifetime value model. Take a good hard look: you will see that this is a transactional model at work. I will only invest in you, to treat you well, if I can figure out in advance that I will get more out of this then I have to put in. Dive deeper and you will find that the hidden assumption is that each customer has a fixed customer lifetime value that is attached to her – like her name is attached to her.
Now go and read ‘Reinventing The Wheel’ by Chris Zane and you will find that he continues to run his business on the principle that each and every customer has a lifetime value of $12,500. And it is everyone’s job to deliver a unique experience and realise that lifetime value. You see Chris Zane gets the philosophy (the game) of customer-centricity! Chris (and his team) is creating value for his customers by treating each and everyone has a $12,500 customer. He did not hire a customer insight team to do all the calculations. He sat down and estimated it based on what a customer would purchase if Chris managed to keep that customer for a lifetime. When you dig deeper you find that Chris chooses to trust and invest in his customers. And customers are paying him back. How many of these customers have become $12,500 customers because of the way that Chris and Zane’s Cycles treats them that way? Chris gets that the mission of creating that $12,500 in cusotmer lifetime value falls to Zane’s Cycles: yes it has to be created not just calculated! It is created by selling and delivering unique experiences (again and again) that customers value: trust, support and outstanding service is a core part of these unique experiences.
Conclusion and Recommendation
To sum up, established business have completely misunderstood the principle behind customer lifetime value because their mindset is old school: transactional – focussed on extracting value. Chris Zane gets the deeper game from which arises the principle of customer lifetime value and that is why he has made it work.
If you really want to grips with the customer-centricity game then read Chris Zane’s book: ‘Reinventing the Wheel’. It is gem of a book and I wholeheartedly recommend it.