The Connection Between Business Strategy, Customer-Centricity and Customer Experience
Whenever I struggled with a Physics problem my professor (a wise man) instructed me to go back to the fundamentals: the fundamental principles of Physics. This post is written in that spirit.
A little about the value and limits of frameworks
So you want to lead your organisation to competitive success. Great. Without a framework – a point of view that you CREATE and IMPOSE on the messiness of reality – how are you going to get there?
Here is the framework that I use based on everything I have learned about business and customer-centricty – looking through the lens of the strategist rather than an expert in operational effectiveness/efficiency. Before you read what I write, I am compelled to point out that everything that I share with you is NOT the truth. It can NEVER be the TRUTH. Why? When you dive into it, really dive into depths, you will see for yourself that ultimately life is a mystery.
Frameworks are simply models. Models are not an accurate depiction/representation of reality (what is so). Models are useful because they simplify reality and thus allow us to act on it. Frameworks are filters – they filter out that which is unnecessary. The issue is that we can never know what is unnecessary. The hidden manifests that which is visible. If that is too esoteric, too zen for you then think about the fundamental finding of chaos theory: a infinitesimal change somewhere in the system (far far away in space-time) can have catastrophic impact over here now. The popular version for this is the “butterfly flapping its wings in South America yesterday can change the weather over here in the USA/Europe today”. OK, with the context set let me share with you that which I promised to share with you.
This is everything that I have learned about business, customer-centricity and customer experience – as a strategist
- He who does the best job of creating AND communicating the most value for the customer (through the customer’s eyes) wins;
- A distinctive Value Proposition (that speaks to the target market) is at the heart of creating value for the customer – notice I used the term DISTINCTIVE, not better and not simply different;
- That distinctive Value Proposition allows you to offer and get away with a ‘not so great customer experience’. Yes it does! Think about IKEA. Think about Ryanair/Easyjet. Think about early adopters of any new technology who put up with all kinds of ‘hassle’ simply to access and benefit from the Value Proposition.
- If you do NOT have a distinctive Value Proposition you can focus on excelling at the Customer Experience and that excellence can become your Value Proposition.
- Even if you have a distinctive Value Proposition you must continually improve the Customer Experience such that it AMPLIFIES your Value Proposition.
- A distinctive Value Proposition and the appropriate Customer Experience - both pinned by the Value Chain and a continuous improvement culture - will allow you to dominate your industry and make bumper profits.
To create and deliver that Value Proposition and the associated Customer Experience you have to get your hands dirty designing, monitoring, changing, tuning the Value Chain - what you do not do (e.g. Zappos does not outsource Customer Service) matters as much as what you do.
Create a context where you and your people are open to generating and using insights (wherever they arise) to improve your Value Chain, the Customer Experience – think twice before you make any significant change to the Value Proposition.
Communication (listening, talking, discussing, imagining, sharing, debating) matters profoundly so communicate, communicate, communicate - if a tree falls down in the forest and there is no-one to record and share that falling then that tree did not fall, in fact it never existed!
One day a butterfly will flap its wings, change the ‘environment and the rules of the game’ rendering your Value Proposition irrelevant. When that happens your customer-centricity, your Customer Experience – no matter how great – will not save you. If you are ‘lucky’ you may end up reinventing yourself – like Apple, like IBM, like Starbucks did. The more likely scenario is that you will die a slow death like Kodak. No need to despair, the game goes on, just the player/s at the centre of the stage change. Comfort yourself, know that we are all like guests in hotel rooms – temporary occupants in the game of business and life, the game goes on with and without us. Ultimately it is all about the game itself – we come on the stage, play our part and then leave. That applies to all of us – no exceptions. That is our shared humanity.
Maz is a customer focussed business strategist and a management consultant. He specialises in customer strategy, customer experience and relationship marketing. Maz has a deep interest in people, relationships and business. He has over 20+ years of experience that spans marketing, sales, service, logistics, finance, HR and IT.
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Once again Maz you have hit the nail on the head. There is a risk with CEM professionals that we see customer experience as the only way to differentiate. This is compounded by the prevailing narrow definition - how customers interact with the company, typically the sales or customer service teams. What this ignores is that the majority of interactions customers have are with the product (or service) the company supplies (not with the sales or service teams). For that reason I think it is more useful to take into account the value proposition which encompasses the product/service offering (so implicitly the experience of using that) and pricing as well as the interactions a customer has with the company. And each of those three offer a means for differentiation. Delivering a great experience (like Zappos or Amazon) is an incredibly powerful differentiator, mainly because it is so difficult to do (for reasons you described in your economics post last year). But it is not the only dimension. That said I also agree with you about the need to continually improve the experience being delivered because the bar is always rising - as it is with expectations of product service elements. And getting the supply chain right is critical - you can't deliver a great customer experience until you get the basics right.