Is this the real state of ‘customer-centric’ business?

Last week I was fortunate enough to attend/participate in a informal gathering (in London) hosted by Bob Thompson (of CustomerThink.com).  At this gathering we touched upon a number of topics and in this post I wish to share with you what left an impression upon me.

1. No consensus on what constitutes a ‘customer-centric’ business

Amongst the 10 – 12 gathering (of noted gurus, authors, speakers, consultants) I noted that we did not share a common understanding/definition of what constitutes a ‘customer-centric’ business.  I am not sure that  I found any strong agreement for my point of view that the defining being of a ‘customer-centric’ business is that of authentic care:

“when you are confronted by the choice of doing what is right for you at the expense of the customer or doing what is right for the customer even if it costs you, then are customer-centric if and only if you do what is right for the customer and take the hit.”

If you want to drill deeper into  the defining characteristics of a ‘customer-centric’ business then read the following:  The Three Pillars of Customer-Centricity

Bob Thompson shared the results of research he had been involved in some years ago.  When customers were asked what constituted ‘customer-centricity’ they came up with:  product quality/fitness for purpose; customer service excellence; being treated fairly; and price.  Bob made a big play, as do others, about price only being fourth on the list.  I will be writing a post on the price myth soon.

2.  Only a handful of companies  can be pointed at as being models of the ‘customer-centric’ orientation

Whilst we could not agree upon what singles out a ‘customer-centric’ business from one that is ‘not customer-centric’ we were able to agree that there are only a handful of companies that get pointed out as being ‘customer-centric’: Zappos, Amazon, SouthWest Airlines, USAA, Zane’s Cycles…….

3. The transition to ‘customer-centric’ business requires a transformation and that is not likely

What is holding back the transition from ‘business as usual’ to authentic ‘customer-centric’ business?  There was a genuine agreement that this requires a transformation in mindset, leadership, culture, business model, organisational structure, performance measurement systems….. What is the likelihood of this transformation taking place voluntarily?  Again there was general agreement that is highly unlikely if not impossible.  There was mention of how the life of big companies is becoming shorter and shorter.  The point being made was that companies get taken over, disassembled, die – as opposed to voluntarily transform themselves.

So any transition to ‘customer-centric’ business will be led by/driven by new entrants who are not encumbered by legacy thinking, legacy organisations, legacy business models, legacy cultures…… And by customers who take up arms and force chang.

4.  Is there any real substance behind all the ‘customer-centric’ talk?

No. The gurus, the consultants and the company insiders agreed that – in their experience companies that make a big fuss/play  on the customer experience and ‘customer-centricity’ are mostly indulging in either ‘self-delusion’ or PR/’messaging’.  Who wants to say that they are not ‘customer-centric’ when it is fashionable to be ‘customer-centric’?  We could only think of Michael O’Leary the CEO of Ryanair.

5.  Why does pretty much anything to do with Customer end up in a technology discussion?

It was interesting to note that the whole Customer field (CRM, Customer Experience, Social Media, Social CRM, Customer Service…) inevitably ends up in a technology discussion.  Why is that?  That is the question that Bob asked  I believe that the consensus was that this is the route of least resistance.  This is what organisations are comfortable in discussing and doing.  The technology as a silver bullet is a powerful myth.  It reassures the Tops and Middles that they can continue doing what they are doing, not have to make any changes, not look at themselves, not confront leadership and management style, nor the business model……..   And of course the technology vendors are great at coming up with new silver bullets and selling them effectively.

Author: Maz Iqbal

Experienced management consultant working at the intersection of strategy, customer, and technology. Combine a tendency to think strategically with a penchant for getting my hands dirty at the coalface of implementation.

6 thoughts on “Is this the real state of ‘customer-centric’ business?”

  1. Maz

    I think your conclusions are sad but true. As a technology vendor dealing in software that helps ensure customer satisfaction, we often have people say to us “I had this bad experience – they should be using your software”. My response is always the same – the bad experience, and the attitudes behind it, mean that the company concerned would never *want* to use our software.

    Our customers are universally those who really do care about their customers, in line with your definition of ‘caring’. That leads to them looking for technology that can help.

    I’ve been in the technology industry for 30 years and I have long since learnt that technology only ever helps when people get their think straight first.

    I look forward to your post on pricing – the financial implications of customer satisfaction certainly merit more thoughtful coverage!

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    1. Hello Guy
      Great to hear your voice again on The Customer Blog – it occurs to me that you always have and say something shrewd borne of experience rather than theory. Once again I find myself in agreement with you: technology does have a role to play and it comes after the thinking is done, the heart/culture/practices are in place and then technology provides the toolset.

      Pricing – I am looking forward to writing that one, I suspect that one is going to upset some folks. Then my commitment is to speak what shows up as my truth.

      All the best, I hope business is great for you!
      Maz

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  2. Hi Maz,

    Thank you for the summary of the meeting that we attended. I share your frustration that whenever there is a discussion about ‘customer’ then it tends to get dominated by talk of technology. I had the pleasure of interviewing Karl Chapman of Riverview Law the other day (http://www.adrianswinscoe.com/blog/reinventing-customer-experience-in-the-legal-sector-interview-with-karl-chapman-of-riverview-law/). They have established a new law form that has been built from the customer up and not from the partner down. However, one of the interesting things that Karl said was that whilst technology is important in helping forms deliver on their customer promises and deliver a better experience it is secondary to the people dimension. He emphasised (and I agree with him) that everything starts and ends with a person. Many forms forget that or, conveniently, put it to one side. Why? Perhaps because it does require real change, courage, it takes time, deals with many intangible things like how we are with each other other, how we treat each other both inside and outside our organisations and how much we care. Maybe also because it’s also harder represent ‘people’ initiatives on a balance sheet. Perhaps, that’s where the real challenge lies….getting to a point where our investment in people is reflected on a balance sheet?

    Adrian

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  3. Hello Adrian

    The design of the modern organisation is to make as much money as possible by producing as much as possible at the lowest cost. That means getting as much out of people whilst paying them the minimum possible and keeping them as dependant as possible on the organisation. That is Anglo-Saxon capital though few will admit.

    Look when Tops announce that they will cut 1,000 jobs the investors rejoice and the share price tends to go up. That is how much value is placed, in reality, on the people in the business. Why do you think technology is loved so much and sells? Technology promises to reduce costs by reducing the number of people that need to be employed. That is the real driver behind the growth/adoption of technology.

    What is the perfect business? Where customers buy in droves, are insensitive to price and quality and where all the work is automated so that no employees are necessary. Look deeply and you will notice that pretty much all business moves are made in this direction. Even expert systems were developed so as to avoid the need to hire expensive people – to replace them with unskilled low paid labour.

    Look at what is happening regarding labour laws right now. The recession is a great excuse for the powers to be to do with labour laws that provide any kind of security/protection to the labourer. The more insecure the labourer the harder he will work for lower pay and under worse conditions.

    All the best
    Maz

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    1. Hi Maz,
      Sad but true. I, for one, do not accept that this is the only way and will look for and champion examples of firms that tread a different path. There are many examples, forms and sizes of firms doing this. You talk about many of them on this blog.

      I will remain restless,

      Adrian

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  4. Hello Adrian

    Clearly it is not the only way. Zappos is doing well by treating employees as a community even a family. So, as you say many different avenues are possible. And yes, I do talk about them and I am up for the same as you.

    And I am committed to see reality as reality whilst working for the possibility that I see and which inspires me. What is that possibility? Human centred businesses, the treat people well, that inspire-allow-call people to be great and use that greatness to create value for all: the customers, the employees, the value chain partners, the suppliers, the community at large. You could argue that is my fundamental motivation/reason for writing this blog.

    All the best to you, friend.
    Maz

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