The seven myths of customer centricity
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Everyone says they are customer centric but few actually deliver outsized value to the customers.
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The seven myths of customer centricity
- 1. SEVEN MYTHS OF CUSTOMER CENTRICITY 1
- 3. 1. DATA
- 4. 2. SINGLE CUSTOMER VIEW
- 5. 3. NPS
- 6. 4. CHIEF CUSTOMER OFFICER
- 8. 6. MARKETING
- 13. Uber
- 19. CUSTOMER CENTRICITY IS A PRINCIPLE “IT’S NOT A PRINCIPLE UNTIL IT COSTS YOU MONEY” BILL BERNBACH 19
- 20. THANKS 20
Editor's Notes
- Welcome to the seven myths of customer centricity. Customer centricity is such an over used term today that it has become meaningless. Everyone talks about being customer centric, but few actually make a different to customers. 80% of CEOs believe their company delivers a superior customer service, but only 8% of customers agree.
- Meet Colonel Tom Parker, Elvis’ manager. He was customer centric. During his career guiding Elvis to be the biggest star of his era he realised he was only making money from Elvis fans. So, he created “I have Elvis” merchandise to monetise the segment of the market that didn’t generate any revenue from him. Who else has generated revenue from people that hate your company?
- There has been exponential growth in the amount of data in the world. But insight doesn’t scale with data. In fact having more data, makes some people less certain of things they thought were true. ASOS is a great fashion brand. They are very good at analytics. So good in fact that they are great at retaining customers and building loyalty because they know what their customers want. Sadly, as their customers got older, what was an edgy 20-something fashion brand became a mainstream 30-something brand and lost some of its edginess. Purely following the data is like driving by looking through the rear view mirror. Sooner or later, you will end up in a ditch.
- There is no such thing as a single customer view. Data and sources of data are always changing. Everyone is building a single customer view but nobody has one. They have either none or 2 or more single customer views. Single customer views are an impossibility because its hard to determine where new data comes from before its invented. Today people struggle with making sense of machine or I.O.T. data, but tomorrow it will be something – and nobody bothered to specify it in their single customer view project.
- The Net promoter score, or N P S, is often used to measure the customer experience. It is highly correlated with customer satisfaction and the score is often largely dependent on the context in which it was gathered and the nature of a customer’s engagement. For example, broadband faults are usually technical and nature and require an engineer to fix. The suggest of staying home from work to wait for an engineer is unlikely to yield a high NPS score. Furthermore, like any single metric system the real danger in using N P S is that you optimise your business around maximising N P S rather than business metric it is substituting for. N P S is a heuristic, used to fill a knowledge gap, when real life is too hard to measure. It is not customer centric.
- It’s 2019. What type of business appoints a chief customer officer in 2019? If digital is anything to go by, appointing a chief digital officer is exclusively carried out by companies who don’t understand digital. Similarly it’s not a stretch to think those companies appointing a chief customer officer, are tacitly admitting they have a customer understanding issue. Customer centricity cannot be delivered by an individual. Abdicating responsibility to an individual is the opposite of customer centric.
- Nobel prize winning psychologist Daniel Kahneman identified that the memory of an experience was more important to future decision making than the experience at the time. Today user experience focuses too much on usability, not as a desirable attribute, but as an end state. Usability is a hygiene factor and expected everywhere. For user experience to be customer centric it needs to create compelling memories that drive future behaviours. Few construct experiences with this in mind.
- Marketing communications are not designed to be customer centric, they are brand centric. Their purpose is to present the brand in the best possible light and make connections between the needs of the customer and the products or services being offered. Or telling people what they want to hear or be true. Personalisation is often cited as the means to deliver customer centricity through marketing. But ask consumers and they will tell you that they don’t want personalisation if you explain to them the level of surveillance that is required to drive the personalisation. Personalisation is almost always something that is done to consumers rather than the collaborative act it is implied to be. It is not customer centric.
- I am not sure if you have seen Star Wars, but you don’t defeat the death star with a smaller crappier death star. Many retailers are trying to fight Amazon but creating their own crappier version of Amazon. Copying competitors without pausing to understand why they do what they do is a sure fire path to disaster. Too many large companies blindly copy start-ups without understanding what is driving their roadmap, and more importantly ignore their own strengths.
- So what is customer centric? Let’s take a look at four examples.
- In January 2019, Greggs bakery, did what the carnivorous denizens of the UK would call an audacious move. They launched the vegan sausage roll. Recognising the growth in popularity and practice of veganism in UK, in what was historically a processed meat and saturated fats based experience.
- Not only is the vegan sausage roll now a top five product, but Greggs has reaped the benefits in their market value. Recognising and reacting to societal shifts, and importantly riding the wave of opprobrium to further drive brand awareness is the very definition of smart customer centricity.
- Uber is the largest acquirer of small and medium sized business bank accounts in North America. Bigger than Wells Fargo, Bank of America and Chase combined. The insight driving this (excuse the pun) that 30% of aspiring Uber drivers in the US have never had a bank account. Stepping outside of core business to fulfil a customer need is definitely customer centric.
- By now everyone and their mum has heard the rags to riches story of Dollar Shave Club. But what did they do next?
- Well, through a thorough understanding of their audience, and for that matte their brand, they launched a new product called, One Wipe Charlies. Based on the insight that 51% of men aged 18 to 45 in America use baby wipes to clean their bum, and with the American toilet paper market being worth 50% more than the shaving market, there was a gap in the market, and a market in the gap.
- A quick search on Amazon reveals 119 similar products. I am not sure how this particular brand came up with their product name though?
- RBS is a UK retail banking group that includes Nat West. Banks are one of the last places to look for customer centricity – with bank branches traditionally opening after you go to work, closing for lunch, and closing mid afternoon before you finished work. Today with 24/7 access via mobile applications and websites, banks have be forced, kicking and screaming, to face their customers around the clock. RBS took the transformational leap of changing a number of product and channel roles which reinforced the silos of the organisation, and replaced them with Journey managers.
- These journey managers were given autonomy to work across the end to end customer journey. Many companies talk about customer journeys. Far less change their own internal team structures to organise around the customer. And now, with 100 plus journey managers RBS have made a transformational step to be more responsible to the customers, more customer centric.
- Hopefully this presentation has illustrated that there is no quick fix to customer centricity. This is perhaps because it is a principle. Not a task to complete. Or a person to hire. Or a new KPI. Or an advertising slogan. Or a new technology. Or an application of artificial intelligence. Bill Bernbach explained the meaning of a principle, best. It’s not a principle until it costs you money.
- Bye bye.