President Global CEM
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What are the three limitations of customer-centricity - and which companies confirm them?

25th Feb 2019
President Global CEM
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Customer-centricity is elusive, exclusive and unachievable for many. But, Sampson Lee notes, it's also "invincible". 

In my opinion, customer-centricity has three limitations:

  1. It is exclusive to service-focused/related brands.
  2. It has too many definitions.
  3. It is unachievable for most enterprises.

The two-ply toilet paper of Starbucks

I’ve been asked how I define customer-centricity and had no clue until I discovered the definition given by Joseph Michelli, chief experience officer of The Michelli Experience, “Customer-centricity is a commitment or a strategy to assure the success of your customer.” Michelli elaborated his idea with an illustration of Starbucks.

“Leaders at Starbucks, in part, define customer success as offering affordable luxury to customers wherever the customer finds the brand (online, voice, mobile, and in-store)…. In-store customer success occurs, in part, when a Starbucks customer leaves feeling affordably nurtured.”

In alignment with the objective of offering affordable luxury, Starbucks’ financial officer made a decision to provide double-ply toilet paper at all their stores around the globe, even though deploying single-ply toilet paper can save substantial costs and not every customer will use the toilet paper with likely minimal impact on customer perceptions. Customer-centricity is reflected in all the things you do whether or not the customer notices.

Ryanair achieves customer success but is not customer-centric

“The Starbucks’ two-ply toilet paper” is a simple yet convincing example to demonstrate what customer-centricity is, isn’t it?

“Two-ply toilet paper” impeccably fits companies whose brand promises are about ‘service’, such as Ritz Carlton. How about companies who compete merely on ‘pricing’ like Ryanair?

I trust that Ryanair would definitely go for “one-ply toilet paper”. This act resonates with their lean and mean policies and practices which support their brand promise, drive success for customers who are looking for the cheapest airfares, and create mutual values for the customer and Ryanair. Isn’t that customer-centricity?

Optimising processes for minimum cost is by and large inside-out. Customer-driven companies should have an outside-in view and build themselves around the customer and not the other way around.

In truth, I have rarely heard of any customer experience (CX) expert saying or agreeing that Ryanair is customer-centric. In the eyes of conventional CX experts, Ryanair and other price-focused companies are process-centric. Optimising processes for minimum cost is by and large inside-out. Customer-driven companies should have an outside-in view and build themselves around the customer and not the other way around.

Therefore, price-focused companies without an outside-in perspective are excluded from the customer-centricity world. How about product-focused brands?

Louis Vuitton obtains customer success yet isn’t customer-centric

Apple’s products are mostly great. They are innovative, user-friendly, stylish and cool (during Steve Jobs’ era). Nevertheless, it isn’t enough. It takes the entire value chain of the organisation to be customer-centric. Apple is a customer-obsessed company not just for the reason that they create highly popular products, but also due to their outstanding after-sale service, pre-eminent in-store service experience, and more.

According to global research, the number one factor driving customers to buy from Louis Vuitton again is ‘exclusive feel from wearing/owning LV products’; ‘service’ is a major pain point during the shopping experience. Although its products (or product image to be exact) are adored by a lot of consumers, Louis Vuitton is unlikely to be viewed as customer-centric because of its poor in-store service.

Based on the logic of CX experts, “serve customers well” is the resultant behaviour of customer-driven brands who build themselves around the customer with an outside-in perspective. The mandatory condition for product-focused companies to associate with customer-centricity is always about ‘service’. In the absence of ‘service’, Apple would likely not be labeled a customer-centric brand.

Customer-centricity isn’t for price-focused or product-focused brands

Notwithstanding that Ryanair and Louis Vuitton achieve customer success by offering the cheapest airfares and creating an unparalleled level of prestige feeling respectively, they aren’t considered as customer-centric largely because they don’t “serve customers well”.

Obviously, there is no place for any brand who competes purely on pricing or product in the customer-centricity world. As a result, only the service-focused brands (such as Starbucks, Virgin Atlantic and Zappos) and service-related brands (for instance, Apple, Southwest Airlines and Amazon) are eligible to stay in this world.

Undoubtedly, customer-centricity is not for all companies.

Customer-centricity is different things to different people

What is customer-centricity? The standard answer is, “Putting the customer at the centre of everything the business does”. But what exactly does it mean?

Recently I had an online discussion with a few CX experts on this subject. Albeit a small group, our perspectives are hugely divergent. A similar thing happens when I google “what is customer-centricity”, the search results show vastly different interpretations.  

Bob Thompson, CEO of CustomerThink Corp., commented,“Customer-centricity is a set of behaviours (in other words, culture)…. There’s not a standard definition. Some use the term to mean focusing on or targeting customers (Peppers and Rogers), sometimes called CRM.”

Customer-centricity can hardly be implemented effectively

In short, customer-centricity could mean anything from as wide as a ‘culture’ to as narrow as a ‘tactic’. When even industry experts cannot provide a concrete and agreeable definition, imagine how frustrating it must be for someone who would seriously like to put customer-centricity into practice.

Regardless of the perplexing definitions, some CX expert suggested to predominately take a “Just do it!” attitude to kick-start customer-centricity initiatives. Despite being a potential boost of adrenaline, it would be naïve to expect that propaganda alone would drive successful outcomes. I am not sure anyone could effectively implement anything without clearly defining what they’re trying to execute and achieve.

Can we call Amazon a ‘customer-centric’ company?

Given that field experts are unable to shed light on the path to customer-centricity, shall we simply follow the lead of Jeff Bezos?

Three months ago, I forgot my Amazon login password and my primary credit card was expired. I contacted their CS. To cut a long story short, their service agents are bureaucratic and don’t ‘listen’. Their priority is to follow their standard procedures but not to solve my problem. It took me 10 rounds of emails and seven days to log in again. It’s one of the worst service experiences in my life.

In short, customer-centricity could mean anything from as wide as a ‘culture’ to as narrow as a ‘tactic’.

I thought I was just unlucky, until I read the article of a management consultant, Maz Iqbal. In Customer Experience: Is Amazon Going Downhill?, Iqbal narrated his ‘ugly’ service experiences with Amazon.

Global customer service expert Shaun Belding responded, “I am seeing a rapidly increasing number of articles and posts indicating a growing disenchantment with Amazon…. there are very clear signs, as Maz points out, that they are obsessing over cost control.”

Amazon is also listed as one of The Top 10 BAD Customer Service Stories of 2018“Imagine that you’ve ordered three cartons of toilet paper from Amazon. The cost: $88.77. Then imagine that you are charged $7,455 for the shipping costs…. She (the customer) complained to Amazon six times. She wrote a letter to CEO Jeff Bezos…. It wasn’t until she took the matter to a local television station and the story went viral for Amazon to take action. Two-and-a-half months later, she was finally reimbursed.”

The above aren’t just rare occurrences. You can uncover many more of Amazon’s poor service experiences as shared by numerous customers on the web.

The terrible employee experience of Amazon

You may, nevertheless, argue that the above evidence is insufficient to deduce that Amazon isn’t customer-centric. Please take a good look at Amazon accused of treating UK warehouse staff like robots and Amazon Working Conditions: Urinating in Trash Cans, Shamed to Work Injured, List of Employee Complaints reported by The Guardian and Newsweek respectively.

One of the core components of customer-centricity is employee engagement or experience. Happy employees lead to happy customers. Makes perfect sense. What would you say about Amazon’s employee experience?

Don’t you think that Amazon is NOT customer-centric, not to say the earth’s most customer-centric company anymore? Emulating Amazon for its customer-centricity would not be a wise choice, I think.

DNA transformation is insanely difficult  

Beyond Amazon, Apple, Southwest Airlines, Starbucks, Virgin Atlantic and Zappos are the most frequently quoted legendary brands in customer-centricity, and they have one thing in common: either their founders are customer-obsessed or they have built a customer-centred culture since they were startups.    

Despite the discipline of customer-centricity being extensively promoted and practiced for decades, how many companies – who weren’t born with a ‘customer-obsessed’ gene – have successfully changed their DNA and developed into well-recognised customer-driven brands? You probably won’t be able to quote more than a few names.   

Really, it shouldn’t take much to realise that transforming the mindsets and behaviours of people and entire value chain of a well-established organisation to be customer-centric is unbelievably hard.

Customer-centricity is mission impossible to most enterprises   

In a 2011 video, Jeff Bezos manifested his belief that a customer-focused company should “Think Long Term”: “Most initiatives we undertake take 5 to 7 years before they pay any dividends for the company.”

Forrester’s research director Harley Manning remarked, “CX transformations are massive, take years, and cost millions.”

For all that customer experience practitioners and the consulting community have enthused about the need for customer centricity, the overall effect has been minimal - because very few organisations have become genuinely customer-centric.

Think of the number of companies that have the deep pocket of Amazon to wait for five to seven years for an initiative to pay dividends? Not too many. In light of the tremendous difficulties of DNA transformation, huge financial costs and super-long period of return on investment, customer-centricity is an unaffordable luxury to most enterprises.   

No wonder Jack Springman, head of consulting at Ctrl-Shift, stated in his thought-provoking article Six reasons why customer-centricity should NOT be an objective, “For all that customer experience practitioners and the consulting community have enthused about the need for customer centricity, the overall effect has been minimal. "THAT’S BECAUSE VERY FEW ORGANISATIONS HAVE BECOME GENUINELY CUSTOMER-CENTRIC," I hear you shouting. But that is my point – we have been selling an impossible dream.”

Customer-centricity is “invincible”

Be Water, My Friend“ in the words of the late, great Bruce Lee, “Be formless, shapeless, like water. Now you put water into a cup, it becomes the cup. You put water into a bottle, it becomes the bottle. You put it in a teapot, it becomes the teapot.”

“Be Customer-Centric, My Friend.” The meaning of customer-centricity can be shifted to any ‘form’ or ‘shape’ you want, like water. No one can challenge you – particularly when customer-centricity is defined as a ‘culture’. How can an implementation of something so abstract be measured? Without measurement, customer-centricity will have no chance to fail. And the word “customer-centric” itself is so politically correct; who would dare to say anything against it? 

These are the tempting reasons to keep waving the ‘customer-centricity’ flag.

Being customer-centric is not the only choice

However, for those who are dissatisfied with the confounding definitions and impracticality of customer-centricity, I have a replacement offer in the context of business strategy. It addresses the three limitations of customer-centricity:

  1. It is for all brands – no matter ‘price’, ‘product’ or ‘service’ focused.
  2. It has an explicit definition and clear implementation steps.
  3. It is achievable for most enterprises.

What’s more, it drives a memorable and differentiated experience, creates mutual values for the customer and brand, and transforms competitive advantages into sustainable strengths.

I outline this recommended substitute in the next article: Extreme experience: How brands are achieving customer success without being customer-centric.

Replies (4)

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By maziqbal.blastradius.com
26th Feb 2019 08:37

Hello Sampson,
I enjoyed reading your article as I find myself in agreement with you. In particular,

1. Customer-centricity has become like strategy - putty that the speaker uses to mean whatever s/he wishes to say.
2. Almost all are wasting money/effort on customer-centricity, and CX - that which they are seeking to achieve simply is not achievable given their 'DNA': their core way of being/seeing/operating.

For me, as a thinker/doer who is not tied to any ideology nor management fad, the starting point has always been:

1. Who are your desired customers?

2. What is the value proposition as in what are you offering and wanting in return?

3. How are you going to live this value proposition, on a daily basis, in every part of the office - as much in billing and cash collection as in selling?

4. How are you going to keep the value proposition relevant and enticing given that the world is dynamic - including the customers themselves?

Wishing you the best. And, you have shown me that there is at least one thinker in the customer-centricity circle. To date, I had been thinking it is full of advocates, believers, and charlatans.

Thanks (2)
Sampson Lee, founder of Global CEM and creator of PIG Strategy
By Sampson Lee
26th Feb 2019 10:36

Well said, Maz! I couldn't agree more. Thanks for your valuable insights.

Thanks (0)
linkedin
By LinkedInUser
26th Feb 2019 12:30

This comment posted in the MyCustomer LinkedIn group by member Tom Burrell:

Really interesting perspectives in this article. Lots of brands aren't customer centric and don't want to be (e.g. Ryanair), Amazon are frequently cited as a leader in customer centricity, but judging by recent service feedback aren't And no one can agree what customer centricity is....ha!

Thanks (1)
Louis Smith
By LouisSmith
26th Feb 2019 12:35

Hmm, very interesting. If you think about it, it does not seem incredible.

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