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Customer centricity

Posted on: Friday 7th of January 2011

I’ve had some interesting discussions recently about customer centricity. Some thoughts spring to mind.

First, ‘customer centricity’ has become an Alice in Wonderland word which different people use to mean whatever they want it to mean. Depending on who you talk to for example, customer centricity can revolve around:

Structural change: organising reporting lines, product lines, business units or sales structures around customer segments

Culture change: becoming less inward looking and more ‘customer focused’, ‘putting the customer first’, ‘going the extra mile’

Another word for CRM: building marketing, service etc around customer data held in CRM systems

What’s striking about these different meanings is that they make misunderstandings and confusion almost inevitable. Unless there’s somebody, somewhere with a very clear, actionable integrating vision – which puts each element in its appropriate place – the customer centricity initiative will soon become an exercise in herding cats: a black hole of activity characterised by exciting visions and little achievement.

The striking thing about the above definitions of ‘customer-centicity’ is how organisation-centric they remain. It’s about what we do to the customer, not what the customer is trying to achieve.

Three secrets of success

I think there are three other things which determine the success or failure of any would-be customer-centricity initiative.

First, does it start from what the customer is actually trying to achieve? (That’s not the same as starting with the product or service the customer might prefer. It includes customer goals, processes, metrics and dilemmas.) This is crucial because customer-centricity is actually a different type of business model built around ‘improving our performance by helping our customers improve their performance’. That’s very different to ‘improve our performance by selling customers more of what we want to sell,’ for example.

The second and third points follow from the first. If the initiative is not connected directly to how the organisation actually makes its money and achieves its own KPIs, it’s not going to stick. It will just end up as wasteful lipstick on the gorilla.

And, even if it helping to drive the organisation’s KPIs, if this isn’t translated into how staff do their day-jobs – preferably in a way which makes their working lives better and more agreeable in some way – then it still won’t happen.

Seen in this light, while those first three definitions of customer-centricity may play a role, seen alone or in isolation they’re also a pretty good way of getting side-tracked.

Alan Mitchell