Digging into ‘customer-centricity’: what is the defining feature of a ‘customer-centric’ company?

My last post (a practical enquiry into service, customer experience and customer-centricity) generated some interesting conversations.  A particularly interesting conversation took place between Bob Thompson and me – you need to scroll towards the bottom and read the comments.  In this post I want to address the key question that Bob raised:

Customer-centricity is at least as vague a term as CRM and CEM. Is it a strategy? A state of mind? A loyal relationship?   Personally, I’ve defined “being customer-centric” as delivering value that customers care about. The end results should be more loyal customers.  But it’s not quite that simple. How do we explain the success of Ryanair, which offers a low-cost service, gets lots of travelers and makes money, but can hardly be said to have raving fans?

If you have looked into that conversation between Bob and myself you will see that I addressed the Ryanair issue.  So what I up for addressing is the question: what clues can you look for that helps you to distinguish a ‘customer-centric’ from a ‘not customer-centric’ company?

Is listening / responsiveness the distinguishing feature?

In this post Bob Thompson asserts that Starbuck is customer-centric because it listened to him.  Bob had an issues with his local Starbucks: “we started noticing that about 30 minutes before the store officially closed, employees brought the tables and chairs from outside and piled them up inside the store. Frankly, it made the store look like “we’re closing” and customers weren’t welcome.” So Bob wrote an email to Starbucks pointing out the issue, he got a response within 24 hours letting him know that the matter would be discussed with the store manager.  And then Starbucks acted on Bob’s email request: “Not only did Starbucks listen, they did something. Fast!  That evening, and all the evenings since then (I checked) the tables and chairs were left outside until closing. And what do you know, there were customers actually using them!

So my question is that if a company makes it easy for you to contact it, responds quickly to your contact and then sorts out your issue / gives you what you are asking for (like Starbucks did with Bob) does that make that company customer-centric?  From where I stand and view customer-centricity the answer is NO.  Why?

Think back to my last post and in particular the issue that arose between the customer and Joe the bartender. Joe acting in the best interests of the customer (including the customer’s wife and three children) refused to serve more alcohol to the customer.  The customer had an issue with this, he reached out to the company, the company gave Joe (the bartender) a telling off, fixed the issue and compensated the customer for his trouble by giving him two free drinks.  What was the end result?  The customer got heavily drunk, drove home, had a crash and died – taking three other people with him.

Purpose-Vision-Mission statements – do these help us distinguish a ‘customer-centric’ company from a ‘not customer-centric’ company?

When you read the following vision/mission statements I’d like you to be present to what emotions they evoke in you as well as what thoughts bubble up for you.   Let’s start:

Ryanair:  “Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service. Ryanair aims to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-containment and operating efficiencies.”

Yahoo!:  “Yahoo!’s mission is to be the most essential global Internet service for consumers and businesses.”

Microsoft:  “Microsoft’s mission is to enable people and businesses throughout the world to realize their full potential.”

Dell:  “Dell’s mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve.”

OK, now lets move on to a second set of companies.  As you read these mission statements please be present to how these land for you – what feelings and thoughts do these evoke for you?

Chick-fil-A:  “Chick -fil-A’s corporate purpose statement reveals the heart of our company: “To glorify God by being a faithful steward of all that is entrusted to us and to have a positive influence on all who come in contact with Chick-fil-A.” Chick-fil-A’s mission statement reveals our commitment to service: “To be American’s best quick-service restaurant.”

Southwest Airlines:  “The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.”

Amazon: “Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.”

USAA: “To facilitate the financial security of its members, associates and their families through provision of a full range of highly competitive financial products and services; in so doing, USAA seeks to be the provider of choice for the military community.”

Starbucks:  “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time.”

Virgin Atlantic: “At Virgin Atlantic, our mission statement is simple…To grow a profitable airline…Where people love to fly…And where people love to work.”

Did you notice the key differences?

Customer-centric companies are in a totally different league when it comes to the game that they are playing.  Did you notice that their mission statements:

1.  start with / draw attention to customers, what jobs they will do for their customers, what value they will create, how they will treat their customers?

2.  speak words that speak to human beings in terms of their ‘concerns’ as human beings: ‘glorify’,’ faithful’, ‘positive influence’, ‘service’, ‘warmth’, ‘friendliness’, ‘pride’, ‘spirit’, ‘dedication’, ‘member’s, ‘worthwhile satisfying employment’,’discover’, ‘financial security’, ‘competitive products’, ‘families’, ‘nurture’, ‘human spirit’, ‘love’, ‘people’..?

3.  are concrete, meaningful and even inspiring to customers (and employees) whereas the mission statements of the ‘not customer-centric’ companies are vague, amorphous, general and generally meaningless and uninspiring?

Customer-Centricity: being of service, enriching lives and contributing to a better world

From where I stand I am clear that the key characteristic that characterise and distinguish a ‘customer-centric’ company from a ‘not customer-centric company’ is that the ‘customer-centric’ company is playing a totally difference game.

The ‘not customer-centric’ companies (including those that espouse customer-centric rhetoric) see customers as tools, as instruments, as means for enriching the Tops and the the people who represent the shareholders. And within that context there is no consideration of the longer term, stewardship of the world that we live in, the dignity of our fellow human beings.  Anything goes as long as ‘rent’ is extracted from customers to line the pockets of the Tops and shareholders.

Under the rhetoric of ‘customer focus, customer experience, customer-centricity, customer obsession’ is the urgency to sell, sell, sell the products that the companies has to sell.  The customer rhetoric is there only because it has become hard to sell because customers are more demanding, more discriminating and their is a high level of competition. The whole edifice is built on fear, greed and the “I-It” orientation towards customers, employees, suppliers, partners, communities in which these companies operate.  In short, this is business as usual – the standard economic/industrial/organisation model that is in place today and accepted as best practice, the smart way to do business.

The ‘customer-centric’ companies are primarily coming from a context of being of service, of contributing to our fellow humans, of making a genuine and worthwhile difference to the lives of the people who touch and are touched by the company- customer-centric companies live a “I-Thou” orientation.   The Tops who founded and/or are running these companies get the importance of making profits.  Yet, that is not the purpose nor the mission of these companies.  To ‘customer-centric’ companies profits are like the air that we breathe necessary to survive and profits are the reward that customers/employees bestow on the company for the service that the company has rendered.  Profits are marker of the level of contribution they make.  And profits are the grain that can be stored today for when the ‘seven years of famine’ strike.

A warning or two

First warning: ‘customer-centricity’ does not necessarily guarantee financial success.  Customer-centric businesses can and do go out of business – all that is needed is a disruptive innovation.

Second warning:  you actually have to live up to the ‘customer-centric’ mission statement to be viewed as being ‘customer-centric’ by your employees and customers.  Starbucks espoused the mission but took all manner of actions that did not fit in with the mission to grow revenues and profits to meet shareholder expectations.  It got into a mess and the man who had formulated, fought for and lived the mission statement (Howard Schultz) had to come back, take over and turn around Starbucks – get the people in the business connected with and living the mission wholeheartedly.  Today, Tesco is where Starbucks was at.  It espouses a fine mission – “Our core purpose is, ‘To create value for customers to earn their lifetime loyalty’. We deliver this through our values, ‘No-one tries harder for customers’, and ‘Treat people how we like to be treated” – and it failed to live up to it for several years and is now paying the price.

Why culture is the ‘Achilles Heel’ of your customer experience efforts (Part II)

This post concludes the train of thought that I shared in an earlier post – Why culture is the Achilles Heel of your customer experience efforts (Part I). – I encourage you to read it to get the most out of this post.

Let’s forget morality and focus on ‘workability’.  By ‘workability’ I am addressing the pragmatic dimension.  For example if you want to fly a 747 from London to New York you simply need an airworthy aeroplane, the right fuel, experienced pilots, the right staff etc – these are the conditions of workability for the flight.  If you do not have these in place then your plane may get off the ground but it is highly likely to make it to New York.  So what are the conditions of workability for a customer-centric orientation that builds customer loyalty?

The foundation of customer loyalty is earning and cultivating trust

In a world full of suppliers who offer pretty much the same goods who would you choose to do business with?  If you are like most of humanity then you will instinctively do business with the one that you trust the most. Don Peppers & Martha Rogers have taken a good look at the whole trust thing in their book ‘Rules to Break & Laws to Follow’.  So allow me to share their wisdom with you.  Here are the laws that they recommend that you follow:

1. Earn and keep the trust of your customers

The key point I want to stress here is the word ‘earn’.  Yes, you need to earn it by doing the right thing (honest, fairness, integrity) as well as doing things right (competence, ease, access, efficiency…).  It means paying as much attention to the social and moral aspects as it does the economic aspect. Are you a fit and proper person/organisation?  Which is another way of asking: can you be trusted to act honorably/ethically?

2. Really taking your customer’s point of view means treating each customer with the fairness you would want if you were the customer.

At a philosophical level you can look at this either through John Rawls veil of ignorance or refer to some of the oldest philosophies used to guide human relations.  Using the lens of the ‘veil of ignorance’ ask yourself how would I design the system (roles, rules, interactions….) if I did not know if I would end up playing the role of the customer or the enterprise?  I used to use this with my two children when they would quarrel over cake: one of them got to cut the cake into two pieces and then the other one got to choose (first) which slice he wanted.  This system ensured fairness.

If we turn towards the world’s great religions then with Christianity you have the Golden Rule.  Rabbi Hillel when asked about the Torah replied “Do not do unto others that which is hateful to you, the rest is merely commentary.” Confucius stated “What you do not wish upon yourself, extend not  to others.”  Mohammed said “None of your truly believe until he loves for his brother what he loves for himself.” And in the holy book (Mahabharata) of the oldest religion (Hinduism) you have “This is the sum of duty: do naught unto others what you would not have them do unto you.”

At a practical level it means taking off your shoes and walking the shoes of your customers.  It means experiencing how it feels to pick a mobile phone plan when there are so many to choose from, so many conditions, so many variables?  It means experiencing what it is like to set-up and use the product with instructions that occurs as being useless?  It means experiencing what it is like not to be able to get hold of  helpful human being when you have an urgent need and having to navigate a ‘hard to make sense of’ IVR and so forth.  Not reading a report about it – actually experiencing it by doing it for real.

Don and Martha say it best when they write:

  • Honestly taking the customer’s perspective is really at the heart of understanding the customer’s experience with your brand or product.”
  • “…the very concept of being trustworthy that the company will not be acting solely in it’s own short-term interests.  On one level, this might involve simply giving a customer a fairer deal than she would otherwise have know about.  Or it could mean providing the information to allow her to compare competing offers directly – your competitors best offers included. It might mean being completely open with the customer when talking to her about the merits of buying a product or service….”

3. To earn your customers’ trust, first earn your employees trust.

Your employees can be the source of customer insight, competitor intelligence, ideas, creativity, innovation and judgement.  They are also the source of flexibility: they can judge the situation and respond appropriately.  And there is world of difference between giving the minimum and put our ‘heart and soul’ into your work.  The difference is called ‘discretionary effort’.  Tapping into it is like tapping into an inexhaustible gold mine.  Still not convinced?  Name one technology, one artifact, that has not been ultimately created by a person or persons working as a group.

If you want your employers to treat your customers well you have to model that behaviour: you have to treat your employees well.  In services heavy industries (such as retail, telecommunications, hotels & leisure…) your employees are absolutely critical to any form of service excellence.  To earn the trust of customers you absolutely have to earn the trust of your employees.  You do that by treating them well:  the ‘veil of ignorance’ and the Golden rule applies just as much to your employees as it does to your customers.

You would be wise if you were to apply this ethic to your suppliers and your partners.  I have been a supplier of professional services for most of my working life and my teams have given our all to those clients who have practiced the golden rule.  The rest – we stuck to the contract and did the minimum we had to do.  When disaster strikes your suppliers/partners can be your saviours or the source of your ultimate destruction: more than one company has experienced this.  When disaster struck Toyota survived because it’s suppliers did the right thing because Toyota had a history of doing the right thing by suppliers. In the UK I once heard the CEO of the best known Indian food company share (emotionally) how his suppliers pitched in to save his business when his only manufacturing facility burnt down overnight. Why?  Because he had treated them honorably.

4. If being fair to customers conflicts with your company’s financial goals, then fix your business model or get a new one.

To cultivate customer trust you must put in place a culture that calls everyone in the company – each and everyone – to genuinely consider your customers perspective and well being in each and every decision that your company makes.   Here is how Don and Martha put it: “Whenever your employees are solving a problem or undertaking an initiative, at some point they should ask themselves the question: What’s in the customer’s interest here?” And you have to act on that interest.

If we are truthful then it is highly unlikely that you have this culture today.  Your challenge is to create that culture; your biggest obstacle is likely to be the Tops, your business model and short-termism.  If you company does not create that kind of culture then you are leaving the field wide open for new entrants who build a business model around treating your customers fairly, cultivating their loyalty and reaping the benefits: think Netflix v Blockbuster (late fees) or Google v Yahoo! or Zane’s cycles v other bike sellers.

Final words

Archimedes said “Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.”

Culture is the lever and the CEO (as leader) is the fulcrum:  if you have do not have the right leader and the right culture then despite your best efforts you will not succeed in cultivating customer loyalty and harvesting the benefits. At best you will win minor battles like reducing customer service costs or improving the ROI of your marketing campaigns. And in the process of seeking ‘customer gold’ you will simply make the pick axe and shovel sellers rich.