Reading the mountain of ink that has been written on all things Customer (strategy, insight, experience, service, CRM) one would be forgiven for concluding that it is a difficult if not impossible task for a large organisation to become customer centred. You have to come up with a great strategy, to segment your customer base, to work out LTV, to build propensity models, to implement complex CRM systems, re-engineer processes, overhaul the call centre and employ an army of change specialists to get the culture change you want.
Commenting on the disbanding of the Consumer Focus (the body that sought to persuade organisations to put consumers at the heart of they do) she states that a great way to gain a competitive edge is for marketers to challenge category norms. She says, get the team together and really get to grips with the following question: “How is our category currently letting people down?”.
What does she mean? She illustrates by using example from three industries:
- budget airlines force customers to ‘uncheck’ the insurance option twice. Why? Because it makes more money for the budget airlines.
- mobile network operators deliberately make their pricing plan complex so that it is difficult for customers to compare apples with apples and also because the operators make more money as customers typically end up on more expensive plans.
- supermarkets who deliberately put the milk and eggs at the back of the store so as to force to walk past tempting goods and thus make impulse purchases that they never intended to make when they first came in the store.
She goes on to mention that the Virgin brand claims to put this approach at the heart of its business model: it strives to seek out practices that are self-serving and customers find unfair within a category and sets about changing them in a way that creates value for consumers and the Virgin brand.
So there it is. To become customer centric an organisation simply has to give up self-serving category practices that exploit the customer rather than build goodwill with the customer. It does not involve business process re-engineering, lean, customer service offshoring, multi-million pound investment in CRM systems and so forth.
The question within each category is which organisation is willing to go first? The organisation that is best placed is the category leader and yet the category leader is the one organisation that is least likely to do so. And the category laggards often do not think that they have the luxury of sacrificing the short term for the longer term. That is why category disrupton falls to the likes of Virgin, Apple, Amazon, Charles Schwab and so forth – organisations that are not invested in the existing way of doing things.
I once did some customer experience consulting with a category leader who had thousands of pricing plans which caused a big headache in the billing systems. The case for simplifying the price plans was compelling from many angles. Yet the Tops (people at the top of the organisation) vetoed the change every time the idea was suggested – it had been suggested many times over the course of many years: the company was making substantial revenue and profit from customers that were on out of date, expense price plans!