Customer-centricity is Greed-in-disguise
Posted by Sampson Lee on December 8, 2010
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Print"Balanced-life is greed-in-disguise - if you want to be outstanding - and so is customer-centricity."
I don’t want to be an average father; I want to be a good father. I don’t want to have an average length of life; I want to live longer and healthier. I don’t want to just earn a living or have a profession; I want to be outstanding and be recognized.
My late father worked hard and provided all the necessities and education he is regarded as a good father to me and to my brothers. Nowadays If I didn’t spend enough time and care and always (at least trying to) communicate to my teenager-son in a way like his friend, I will become a below-average father comparing with his peers’. To my parent’s generation, anyone who lives up to age 75-80 is considered a long-life. It’s just the average life-time my generation expected. And about your career, we all experience on a day-to-day-basis how severe the competition is. The pars are ever-rising to catch up with the ever-rising expectations.
Parenthood, health, career – to be successful in any one of these, it takes incredible amount of time, energy, resource, discipline, and, some lucks. If you want to be Great at something, but not Average in everything, stop cheating yourself. Choose to be a good, or even better, a great parent? Gorgeous. Then be prepared to accept more relax outcomes in other life-importance matters. To be a great parent is never easier than to run a successful business: both require commitment of unthinkable disciplines and sacrifices. So step one let's handle the truth: "Balanced-life is greed-in-disguise - if you want to be outstanding - and so is customer-centricity."
When companies state they have more than a handful of brand promises or brand values, you know they are either lying or being stupid, or both. True, you’ve to listen to the voices of customers. But wrong, you shouldn’t, actually you won’t have enough resource to excel in all of your brand promises, superbly satisfy all the critical needs of your target customers. Unfortunately, most companies are not able or willing to handle the truth. So to speak they act-and-react, passively-and-proactively, based on the voices of customers and their critical needs, under the grand name ‘Customer-centricity’, end up they just look pale and indifferent to other ‘average companies’.
A pure customer-centricity would not make customers more satisfied on you than on your competitors, and it creates wastes by allocating resource ineffectively. The worst thing is, it homogenizes your brand. The damage of customer-centricity on great brands is more profound. It trades their unique-and-well-established brand equity for the averaged-and-artificial customer satisfaction scores. Nevertheless, customer-centricity has its places and values. But first, we’ve to filer the greed - driven by ignorant (to ignore the fact that no matter how big you are you only have limited resource), stupidity (stupid in the sense that you think customers are so stupid to buy-in your lie in satisfying all their needs) and arrogant (how dare you could disregard all the hard works being done and are still doing by your competitors) of trying to satisfy all your customers’ critical needs - to identify the common denominator: your brand values (your brand values should be the critical needs of your target customers, but NOT vice versa), in driving both customer satisfaction and brand differentiation.
There are exceptions though. If you company is not delivering the experience up to a minimum standard, e.g. not to drive your customers away or generate numerous complaints, then forget to filter the greed. You are not in the position to talk greed yet. Do your own job to improve until you could raise your head above the water.
Don’t be greedy, and you can’t afford to be. Greed takes you no where but a dilute in focus and farther away your destination, would it be living a great life or running a successful business. Life is so competitive, and so is business. Make your choice.
Sampson Lee
Sampson Lee, the founder of Global CEM (Global Customer Experience Management Organization), created the United States patent-pending Branded Customer Experience Management Method, and delivers the Global CEM Certification Program in Amsterdam, Bangkok, Barcelona, Copenhagen, Dubai, Frankfurt, Hong Kong, Istanbul, London, Paris, Shanghai, Singapore, and San Francisco.
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31 comments »
Robert Bacal
December 10, 2010
Clearly a thought leader
Sampson Lee, along with a very few others, is a thinker who has much to say about the customer service ideas floated about as "proper". I happen to agree that customer-centricity, past a certain point is a business results drag. My colleagues who belong to the Church of Customer Service believe it is a right and that all customers deserve to be wowed, bowled over, amazed, stunned, and loved.
That's crazy. It's bad business, and it works only in limited ways, in limited niches (like boutique hotels).
The Sampson Lee line that should be bolded is this:
A pure customer-centricity would not make customers more satisfied on you than on your competitors, and it creates wastes by allocating resource ineffectively.
Sampson Lee
December 11, 2010
‘Customer-centricity’ is a bad move
Most enterprises mixed up ‘Listen to the Voice-of-customer’ = ‘Understand Customers’ Needs’ --> ‘Customer-centricity’. They are different and this line of thinking is mistaken. ‘Listen to the Voice-of-customer’ and ‘Understand Customers’ Needs’ are not identical and the former is not a necessary condition for the latter. After you ‘Understand Customers’ Needs’, ‘Customer-centricity’ ought not to be your natural and logical choice. In fact it’s a bad move.
ALL great companies understand customers’ needs (in order to select some as their core brand values and focus like hell), but NOT ALL of them listen to the voice-of-customer (think of Apple: “We Do No Market Research.”), and NONE of them are purely customer-centricity (try satisfying all critical needs of customers, not even Amazon, not even Apple, not even IKEA, and not any great companies!).
And Robert, thank you for 'The Sampson Lee line'.
Sampson Lee
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Wim Rampen
December 14, 2010
Hi Sampson, I think it has
Hi Sampson,
I think it has been long established (by Peppers & Rogers) that it makes sense to treat different customers differently mainly because you cannot satisfy all customers (for many of the reasons you set out above) all the time. This is the cornerstone of CRM.
I fully agree with you it also only makes sense to focus on these touch-points in the Customer Experience that matter most to Customers, or better: are considered critical in meeting the Customers desired outcome.
To understand which are these touch-points we need more than the voice of the customer by survey or focus groups. We need to understand the jobs Customers are trying to get done by walking their shoes, observing their practices and contexts in which they are trying to meet these outcomes.
Company's should focus their efforts on these Customer segments and subsequently those touch-points in the Customer's journey that yield the best effect in meeting the desired outcome, for that will result in superior value (co-)creation..
In my world doing just the above should be considered Customer centric, because it is aimed at creating superior value with a clearly defined group of Customers, not at disappointing the majority of the masses.
My thoughts of course..
Robert Bacal
December 19, 2010
You said: I fully agree with
You said:
I fully agree with you it also only makes sense to focus on these touch-points in the Customer Experience that matter most to Customers, or better: are considered critical in meeting the Customers desired outcome.
--
My viewpoint is different. I would alter what you wrote as follows:
...makes sense to focus on those touch points that you can demonstrate are critical and important in generating sales, revenue and profit.
The difficulty I have with your perspective is that it's assumed that customer experience, and doing as you wrote will positively impact on business success and survival, and while that assumption would seem to hold, does it hold true for every company? When does it not hold true? Under what conditions?
This may seem a niggling point, but it's critical in keeping businesses focused on what is their real survival issues for both short and long term.
Lest you think that the notion of a disconnect between customer experience and profit, even over the long haul visit the worst ten companies in terms of customer service and observe their revenue, sales and stock prices.
Bob Thompson
December 19, 2010
Which way to bet?
There's no guarantee that focusing on customer experience, CRM, social media, "wowing" customers, innovation -- or any of the buzzwords du jour -- will result in growth in revenue or profits.
I agree there is too much simplistic thinking that doing that "one thing" will be the magic answer to business success.
Companies do need to focus their efforts. No company has infinite resources or the capabilities to be all things to all people.
And yes, there are some notable "successes" of companies that are not noted for customer service that show good financial results. Think Ryan Air, Comcast, or maybe some utilities that have monopoly positions.
But still, do you want to follow the bottom dwellers? Their "success" doesn't "prove" that bad customer service is the right approach, either.
If companies take "customer-centricity" to the extreme to mean "do whatever the customer wants, no matter how much it hurts," then that's a recipe for failure. Customers will love the company right up to the bankruptcy, then find another "customer-centric" company to take advantage of.
On the other hand, if being "company-centric" means abusing customers, they'll leave as soon as they can. Some companies can lock in their customers, but it's increasingly rare in our competitive global market.
My view is that a successful customer-centric business strategy balances these extreme positions. Over the long-term, companies and their customers both have to receive value. Customer value can include the function and quality of the product or service purchased/used; experiences related to customer/company interactions; and the price/cost.
All that said, I think there is plenty of evidence that a customer-centric approach does work, if it's executed wisely. It's not just about customer service or even customer experience. It's about the entire value proposition the customer perceives.
Here's a white paper summarizing research on this topic:
ACSI: A Predictor of Financial Performance and Shareholder Value
Here's key quote from the paper, from Claes Fornell.
As long as repeat business is important and buyers have a choice, customer satisfaction will be a most relevant factor in the prediction of a company’s capacity to generate returns for its shareholders.
Note: In the ACSI methodology, the term "customer satisfaction" is really a misnomer because they use a robust loyalty model that's not just based on a simplistic "were you satisfied?" or "would you recommend" (NPS) approach.
Mindless subservience to the customer's every whim is no formula for business success. But neither is ignoring customer needs and providing a lousy experience.
Wim Rampen
December 19, 2010
You make a valid comment about my assumption..
I do believe that an effective Customer's experience does result in a satisfied customer, which in return results in loyalty behavior and advocacy.. These outcomes have been tied successfully to a company's revenue growth and profitability.
You make a valid comment about my assumption, that is to the extent that it is certainly not a certainty there is a linear relationship that says the above is true for all different companies in all situations... I do agree with Bob Thompson in his comment though and therefore take my chances with the assumption every time in advance, without hesitation.
The mere fact that the worst ten companies in Customer service have more than decent revenue, sales and stock-price development (assumption I made based on your comment), does not disregard the value of Customer experience (management) as a theory/methodology.
Customer experience management recognizes that the Customer's experience is not a one-time event. It's a journey over time and across all touch-points from the first time a customer becomes aware of the company all the way to not using the company's products or services anymore. It may well be that the Customer service touch-point for these 10 companies is less relevant than others (which in my experience it becomes automatically when the product/service requires less after sales recovery service ;)..
The difficulty I have with your way of re-writing my sentence, is it so easily translates to many of the bad practices we see out there today. Practices, to name one, where Call Centers are transformed to "Value Centers" in which up-selling and cross-selling become more important than solving the Customer's problem or trying to extract some actionable insights from the feedback Customer's provide in the call..
Let me know what you think!
Sampson Lee
December 20, 2010
Improving Satisfaction May Not Help Sales
We have a common belief that if customers are more satisfied, they tend to buy more from us. It implies satisfaction and sales are positively correlated. I’d show you an uncommon perspective: satisfaction-centric may hurt sales:
Why Improving Satisfaction May Not Help Sales
http://www.customerthink.com/blog/improving_satisfaction_not_help_sales
To improve satisfaction should be the means but not the end. You are blind with one eye if you don’t derive the importance levels to purchases. After all, what’s the point to keep improving satisfaction if it doesn’t help——or even jeopardize——sales?
Sampson Lee
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Wim Rampen
December 20, 2010
exit century of Value Exchange, enter age of Value Co-Creation
Of course you are right in your analysis, but I'm not looking at sales as the only target outcome of Customer experience management.
I'm looking at the total value captured by a company from the Customer over the lifecycle. Value that's no longer limited to revenue or sales, but increasingly so in terms of referrals, network, feedback value or engagement value (which seeks to capture all types in one definition).
The times of a goods-dominant-logic, where value exchange is the main focus and in which we could seek to orchestrate or optimize touchpoints as to only increase the value extraction capabilities of the firm, are gone. We have entered the era of a Service Dominant Logic, in which value co-creation with Customers is the new paradigm.
Surely if you take a broader approach to (Customer) Value, your analysis will show different results. Results that, in my humble opinion, open up a new world of opportunity that's been hidden under the heavy weight of supply chain optimization, economies of scale and CRM's flawed "company only" value paradigm.
Sampson Lee
December 21, 2010
Say ‘Goodbye’ to Silos and See the Trees and Forest
Wim you're right if I were looking at sales as the only target outcome of Customer experience management I'd be too narrow-minded; and surely if I take a broader approach to (Customer) Value, my analysis will show different results.
Here is one example looking at the total value captured by a company from the Customer over the lifecycle on retention, referrals, or NPS, across multiple touch-points throughout the entire customer lifecycle:
Managing Your Brand and Social Media with One System
http://www.customerthink.com/article/managing_your_brand_and_social_medi...
We should aim to win the war, not just the battles. Excelling in some touch-points means you are winning some battles, it doesn’t mean you are winning the war – delivering an experience which helps you to achieve your business objectives effectively. Pick the right fights. Pick fights that are crucial to leading to victory. There are so many trees; you will drown in the forest and exhaust your resources and yourself, if you don’t create a comprehensive picture. How can you manage the total customer experience before you have a full view of what it covers?
My view does echo yours. Doesn't it?
Sampson Lee
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Wim Rampen
December 21, 2010
And the other way around ;)
Yes they do, and obviously also the other way around ;)
Sampson Lee
December 21, 2010
value co-creation with Customers is the new paradigm
"Co-creation with customers was a regular practice at some companies even before the emergence of social media. Now social media makes it easier and more effective for customers to engage in the product development process." Said Wendy Soucie.
Here is one example extracted from a 30-page white paper that I 'co-created' with Wendy, and other five social media specialists:
How Social Media Helps Customers Co-Create Products
http://www.customerthink.com/article/how_social_media_helps_customers_co...
To me, it seems like "value co-creation with Customers is the new paradigm", is more valid to some firms and industries, but not all. Wim, what's your thought on this?
Sampson Lee
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Wim Rampen
December 21, 2010
There's a difference
I think there is a huge difference between co-creation as most apply or discuss it these days and "Value Co-Creation" I'm talking here. In essence value co-creation is not so much about doing things together with your Customer.
You may want to read my post on the definition of co-creating value with Customers to understand my thoughts a little better. In this post you'll find a link to a graphic by Chris Lawer putting Co-creation in perspective.
Please also read the posts I linked to in my prior comment on this, as they are an advancement in my thinking on value co-creation from the post above.
Let me know if you'd like to discuss Value Co-creation thinking and the potential I think it has as the next iteration of Customer Experience Management..
Sampson Lee
December 24, 2010
how to apply 'Value Co-creation' to my breakfast at McDonald's?
"Two days ago, I’d my breakfast at McDonald’s. I ordered a breakfast-set includes a sausage McMuffin with egg, a hash browns, and a cup of coffee with unlimited refills. The food is hot, the taste of coffee is acceptable, and the restaurant is clean and well-decorated. The McDonald’s ambassador (a female staff dressed in a flight-attendant-like uniform) proactively approached me to refill my coffee (declare: I’m not greedy as I only refilled once). At the price of USD2, I felt very satisfied, far exceeding my expectations, for my breakfast experience with McDonald’s."
Wim, I described my personal daily-life experience to you because I just want to cite a real life example exploring how to apply 'Value Co-creation'(so that it'd be easier for me and the audience here to understand), by referring back to your definition below stated in your another post. (And if possible if you could also display the difference between 'Co-creation' and 'Value Co-creation' with this example):
"Value is Co-created with Customers if and when a Customer is able to personalize his Experiences through a product or service – in the lifetime of its use – to a level that is best suited to get his job(s) done."
Sampson Lee
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Sampson Lee
December 15, 2010
What did I miss?
Wim, appreciate your approach in presenting different views. So a customer-centric org. 1) listen to the voice of customers, then 2) understand their critical needs (so in your terms 'understand the jobs Customers are trying to get done'), and 3) address some of the critical needs (for those 'critical in meeting the Customers desired outcome') of a clearly defined group of customers - did I miss anything critical that makes the distinguished differences between a customer-centric org. and other org.?
Sampson Lee
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Wim Rampen
December 15, 2010
Sampson, That pretty much
Sampson,
That pretty much sums it up, although I would like to add that defining the group of customers (segmentation) is done along the lines of the jobs they are trying to do..
I elaborate a little more on that topic in this post: http://www.customerthink.com/blog/social_crm_communities_and_customer_segmentation
Also my latest post contains some arguments for the "jobs-to-be-done approach".
Let me know what you think.
Wim
Sampson Lee
December 17, 2010
It reminds me Clayton Christensen and Anthony Ulwick
"Job-to-be-done approach" is easy to understand and communicate. It reminds me the articles written by Clayton Christensen and Anthony Ulwick. Thank you, Wim.
So based on the "Job-to-be-done approach". Let's use IKEA as an example. If IKEA were a customer-centric org., i.e.
1) Listen to the voice of customers, then
2) Understand their critical needs (so in your terms 'understand the jobs Customers are trying to get done' of a clearly defined group of customers), and
3) Address some of the critical needs (for those 'critical in meeting the Customers desired outcome')
... should IKEA address The three common pains — "forced round tour," "availability of staff for on-site support," and "queuing time at check-out" — expressed by VOC (voice of the customers) around the globe during their IKEA shopping experience?
http://www.customerthink.com/article/is_ikea_listening_company
Sampson Lee
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Wim Rampen
December 17, 2010
Yes, Christensen and Ulwick
Yes, Christensen and Ulwick very much inspired my thinking on this, not only because it's easy to understand and communicate, also because it makes perfect sense imho and jobs-to-be-done has a good track-record in the world of innovation. And is that not what we are trying to do with Customer experiences?
I like the methodology you use to extract where to focus (or not to focus) your efforts. And the outcome of your analysis is probably (I only say probably because I cannot check of course, and trust you to in performing it) right, if you focus on all Customers coming through the store.
What I would find really interesting is how would the pain-points or importance rankings be different for different Customer job-based segments, like e.g. people who's desired outcome is an afternoon of fun-shopping, or young adults shopping for cheap, yet functional furniture in their home-office..
In short: I think the next step in optimizing Customer experiences, lies in understanding what jobs your Customer are trying to get done and the outcomes they are trying to achieve. Then we need to understand how the pain-points & importance rankings look different per (job & outcome) Customer segment.. and make new decisions based on the analysis thereof..
Subsequently it would be interesting also to see which segment is the most profitable segment, in terms of Customer Lifetime Value (or the new Engagement Value), because this would provide us with insights to further narrow our focus and increase the return on our efforts.
What do you think? Would it make sense for Ikea to dig a little deeper into the real intentions of their Customers?
I very much appreciate your time to discuss this here with me!
Wim
Sampson Lee
December 18, 2010
Your opinion and input are valuable to me
Your opinion and input are very valuable to me, Wim.
Let me clarify if I understood correctly your view. Assume a hypothetical situation, if a firm gets "jobs-to-be-done" done for a clearly defined group of customers, i.e. in meeting the Customers desired outcome, then, even if there exists severe pains for the customers, that particular firm may not necessary to address those pains and could still be regarded as a 'Customer-centric' org.?
If so, isn't it quite a different understanding of 'Customer-centricity' than from what people commonly regard?
Sampson Lee
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Wim Rampen
December 17, 2010
Thx & same here! I don't
Thx & same here!
I don't think there is a "common" understanding of Customer centricity, much like there isn't a common understanding of Customer experience (management), crm, social crm etc. etc.
The mere fact of life is that we all have limited resources and limited capabilities.. it would be a shame to let that go to waste (on customers you can't really satisfy, or on touchpoints that contribute little to the Customer's end). If you would, you are essentially also wasting your Customer's resources.. That's not very Customer centric if you ask me. But, that's all a matter of perspective.
Wim Rampen
Sampson Lee
December 18, 2010
you've done the community a big favor
"That's all a matter of perspective" is so right when discussing, defining, and evaluating customer-centricity. Especially with the prevailing mindset of 'pains-not-addressed is against customer-centricity'.
The original intention for me to write this blog 'Customer-centricity is Greed-in-disguise' is not to explore the definition of customer-centricity; instead I'd like to challenge the mindset of 'pains-not-addressed' to the far opposite end that 'pains-not-addressed' not only NOT against customer-centricity, it WILL, SHOULD, and MUST be allowed, in order to deliver an effective experience to customers (or 'Jobs-to-be-done' in Wim's language). Then, whether it is called 'customer-centricity' is reducing to a trivial matter.
Wim, I think you've done the community a big favor by expressing your unique viewpoint here.
Sampson Lee
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Bob Thompson
December 19, 2010
strategy means doing and not doing
Interesting discussion. For me it reaffirms the point of a real business strategy, as apposed to an implementation strategy.
A business strategy is about making choices. Where to focus resources and attention. And where not to invest -- even if customers are telling you they would like you to do so. Good strategic choices followed by good execution lead to business outcomes that we want.
An implementation strategy is about getting something done. Unfortunately, this is where CRM, CEM and most TLA-focused projects fail. Success is defined as getting something implemented, be it a product (CRM) or a methodology (CEM). Some CRM vendors, for example, define success as users adopting/using their software. This is not a strategy, it's an implementation plan. The fatal flaw is trying to do everything -- think back some of the big CRM projects of many years ago that tried to automate everything but didn't satisfy customers or the company.
Sampson, I disagree with your POV that "customer-centricity" means trying to satisfy all customer needs or address all pains. Where is the research that backs this up? I also don't think "doing" CEM means trying to make every touchpoint outstanding, which I believe is your main point.
Also disagree with the implicit assumption in this thread that CEM is the only or even the main driver of business success. No matter how precise you are in focusing more on the loyalty-driving touchpoints, CEM is just one lever in the value equation -- "product" and "price" still matter. If fact, some consumers' desire to get the lowest price may well explain why certain brands succeed despite poor customer service (Ryan Air) or other problems in their customer experience. Or, other consumers might put up with high price AND bad experience in return for getting access to bleeding-edge technology.
Apple is one brand that seems to win mainly based on product innovation, but also delivers a nice in-store experience. But not price. Wal-Mart delivers low prices with an "OK" in store experience and good selection of brands, but not the best and more innovative. Best Buy sells good brands with excellent service, but not necessarily cheapest.
Each company makes these choices. Experience is not always a driver, but in our research it's about 40% of the value equation and fairly consistent across many different industries. So, I think it would be a mistake for most companies to ignore it. (Bad customer service in particular is well-know cause of defection and/or negative WOM.) But equally a mistake to ignore product quality or price and assume a experience-based strategy is the right or only road to success.
Sampson Lee
December 21, 2010
The #1 Message inspired by Bob: "CRM is NOT software."
Bob,
I'm so happy to see your last post and the 'disagrees' because it inspired me to write THREE messages. This post is the first message.
The #1 Message inspired by you is 'response to your disagree with my POV that "customer-centricity" means trying to satisfy all customer needs or address all pains'.
"CRM is NOT software." CRM's a business strategy, it's about put-customer-in-the-heart-of-your-business, it's not ONLY about technology. Do they sound familiar? Are they something that we preach very hard for more than a decade, especially in the-CRMGuru-then-CustomerThink-community?
If you asked officially the definition of CRM, everyone - no matter a CustomerThink member or an 'average' business executive - will tell you "CRM is NOT software", "CRM is not only about technology, it's in fact a business strategy".
But a definition or an answer on paper diplomatically, which may sound politically correct, doesn't necessary reflect the genuine belief of people.
The fact? Up till today still quite a lot of people regard CRM is mostly a software or very much related to technology. For 'people' I mean not the members here or the related consultants. I mean the 'average' business executives in the commercial field.
It also applies to 'Customer-centricity'. Similar as CRM, if you asked the definition of customer-centricity, you'll find, easily, hundreds of different definitions. But one thing for sure, the answers that you'll get won't be "trying to satisfy all customer needs" or "trying to address all pains", not because of the politically-correctness; but because it's so against common sense, isn't it? Which firm could have the resource to satisfy all needs, it's insane! It's also against common sense to believe software alone could build intimate relationships with customers, isn't it? It's insane too!
Tom Siebel coined the term 'CRM' (since 1993?), it's been 17 years. Did the 'common sense' win or he win? Go out to the market to put on table a question, say, "Would you leave the needs or pains of your target customers unaddressed?". Especially if they claimed to be a customer-centric org., or on the way to be; especially those needs are critical to customers and those pains are severe; not only the 'average' business executives in the commercial field, the front-line staff, and the end customers, all of them are most likely to agree to address 'those needs and pains'.
Surely if based on a book-definition my line "Customer-centricity is Greed-in-disguise" is wrong. But how about when we're dealing with "CRM is software" happening in the real world?
Sampson Lee
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Sampson Lee
December 22, 2010
The #2 Message inspired by Bob: "Experience ain’t Everything."
Bob,
The #2 Message inspired by you is “disagree with the implicit assumption in this thread that CEM is the only or even the main driver of business success. No matter how precise you are in focusing more on the loyalty-driving touchpoints, CEM is just one lever in the value equation -- "product" and "price" still matter… Experience is not always a driver, but in our research it's about 40% of the value equation and fairly consistent across many different industries. So, I think it would be a mistake for most companies to ignore it. (Bad customer service in particular is well-know cause of defection and/or negative WOM.) But equally a mistake to ignore product quality or price and assume a experience-based strategy is the right or only road to success.”
This morning, I’d my breakfast at McDonald’s. I ordered a breakfast-set includes a sausage McMuffin with egg, a hash browns, and a cup of coffee with unlimited refills. The food is hot, the taste of coffee is acceptable, and the restaurant is clean and well-decorated. The McDonald’s ambassador (a female staff dressed in a flight-attendant-like uniform) proactively approached me to refill my coffee (declare: I’m not greedy as I only refilled once). At the price of USD2, I felt very satisfied, far exceeding my expectations, for my breakfast experience with McDonald’s.
“Experience ain’t service.” The Food, Price, and Service (and the related attributes e.g. cleanliness and interior decorations) are being perceived during my breakfast ‘Experience’ at McDonald’s restaurant. Product (Food), Price, and Service are the key attributes or factors driving customers’ behaviors. Experience is the combination - process and result - of WHERE (touch-points such as retail, web, call), WHEN (time and date), and WHAT (customers perceive on attributes of Product, Price, and Service, etc.). Experience is NOT Service. Experience is the carrier of those attributes, including Service.
Product and Price cannot be stand alone from Experience, i.e. to be more precise, not carried by Experience. Unlike the restaurant experience, some products you will consume (use) in a different ‘touch-point’ other than the ‘touch-point’ you purchased. Say, you bought a Ferrari at their showroom, but you feel about the real power of ‘the’ car when you drive it and push it to the limit - the ‘Using Experience’. Dell advertised the Christmas promotion of their latest laptops at your local newspaper; it seems like a real bargain as they include so many advanced features and spec. at that stunning Price USD299! Product and Price have to be perceived or ‘landed-on’ customers via some touch-points - would it be perceiving Ferrari (Product) during your ride, or perceiving the USD299 (Price) of Dell at the newspaper. Experience is the carrier. Experience is NOT Service.
Is Experience everything (i.e. is the right or only road to success)? The answer is “NO” if we refer Experience = Service. The answer (actually my answer) is “YES” if we refer Experience as a carrier, a carrier of all attributes that could influence customers’ behavior, i.e. buy from you (ACQUIRE), buy more from you (GROW), buy from you a longer period (RETAIN), and refer you (WOM). So in this sense “Experience is Everything.” As this conclusion is controversial enough, I may leave two questions unattended, due to the proper length of a blog’s comment. The first one is “Is CEM equal to Experience and is CEM the right or only road to success?”
The second one is “Aren’t you, Sampson, falling into the same fallacy of ‘CRM is NOT Software’ as ‘Experience is NOT Service’? My short answers for the first question is NO, and YES for the second.
Sampson Lee
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Bob Thompson
December 22, 2010
sometimes, a product is just a product
Sampson, it's an interesting argument you make. I agree that separating product, price and experience can be difficult. There's plenty of overlap in certain situations.
And also agree that the experience is more than customer service.
But sometimes, a product is just a product. As Graham Hill said more than once, sometimes we just want it to "do what it says on the tin."
I don't think it's very helpful to define everything as an experience. Sometimes I go to restaurants mainly because I like the food. Redefining it as the "eating experience" doesn't change the fact that the good food is what I'm after, not the dining experience or the low price.
As I said, experience matters, but it's not the only thing that matters.
Sampson Lee
December 23, 2010
always, common belief wins over book definition
Bob, fair enough. I've to admit that even I write 3,000 words more here to elaborate, I still can't change the common belief that "A Product is just a product, not the using experience." Common belief always wins.
So is "CRM is software.", and so is "Customer-centricity shouldn't allow pains-unaddressed."
But, sometimes, the minority fight hard and persistently - like how we fought 'the CRM is not software' war - just because the common belief held by the majority, is not right.
Sampson Lee
[ Connect Sampson on LinkedIn ]
Bob Thompson
December 23, 2010
Keep trying if you think you can "win"
I don't mean to discourage you from convincing the world that products are really experiences. I'm just sharing my personal opinion.
There's a time to change perception, and a time to stop "tilting at windmills."
I promoted CRM=customer-centric business strategy for many years, but the market generally did not accept that definition. My research found that CRM=technology is much more common, although a minority of the market (perhaps 10%) really sees CRM as a more all-encompassing business strategy, and there are still proponents pushing this idea under the new banner of Social CRM. I don't think it will be successful, although I wish them well.
I was just at a holiday party a couple of days ago, talking with a former Stanford university professor. I mentioned "CRM" and he immediately said: "Oh, do you mean Salesforce.com?"
This is why we changed the name of this community in 2007. Why continue to fight a battle that is lost?
In the case of defining products=experience, good luck with that. I see the point, but in my view this is why business managers don't pay attention to some of the new ideas. If they don't make (common) sense, it comes across as just as the next fad.
I hope that CEM doesn't go in the direction of CRM, and tries to be all things to all people. See product=experience as pushing the concept too far for mainstream acceptance.
You're right that may be serious problems with the "customer-centricity" concept as well. I fear that too many people think of it as be a "do-gooder" for customers without regard to the business benefits. Or that it may mean satisfy all pains. However, I don't have any formal research to back this up, do you?
But my common observation is that this is rarely seen in the Real World. Find me some examples of companies that take customer-centricity to the extreme and damage their business. It's far more common to find the opposite, thanks to the company-centric orientation of CRM.
We should do more than exchange opinions on important issues like this! On the question of "What is customer-centricity?" Dick Lee and David Mangen researched this a few years ago with customers and found that factors like high-quality, empowered employees, and open/honest communications were what customers care about. So far as I know, they didn't ask companies to satisfy all pains or damage their business just to satisfy customers.
I recommend you review this research and see how it might apply to your work.
http://bit.ly/he7oyY
Sampson Lee
December 23, 2010
"Does it worth the fight?"
'Product is the Using Experience'? No, it doesn't worth the fight. Though we may have different definitions, I don't see there is only one route to Rome, and I don't see they impose any obstacles to meet the end. Neither does 'Experience is Everything'. There are so many approaches, other than my 'Experience is Everything' approach, that could lead to same or even more successful outcomes. Indeed, there are no reasons for those fights, because the difference in definitions doesn't harm much.
But not the same case for 'CRM is Software'. If you asked me today if it was worthy to fight for 'CRM is NOT software' even if I knew it will come to the same end result as of today? I'm not sure about yours, my answer is: "Yes, it does worth the fight." Because if we define it wrongly that way it is very harmful, though it's long odds you can "win".
By the same token, does the definition of 'Customer-centriciy' worth the fight? Let's say I am wrong with my observations and conlcusion - i.e. the common belief of 'Customer-centriciy' means satisfy most of the customers' needs and not leave pains unaddressed' is not valid, and I don't have any research to support my view, and I didn't read adequate relevant reports to understand the facts. Then, how about we put up a hypothetical scenario: assuming my view were right some day. Does it worth the fight? Again I'm not sure about yours, my answer is: "Yes, it does worth the fight." Because if we define it wrongly that way it is very harmful, though it's long odds you can "win".
Sampson Lee
[ Connect Sampson on LinkedIn ]
Sampson Lee
December 23, 2010
The #3 Message inspired by Bob: "The Extent of Doing."
Bob,
The #3 Message inspired by you is, “A business strategy is about making choices. Where to focus resources and attention. And where not to invest -- even if customers are telling you they would like you to do so. Good strategic choices followed by good execution lead to business outcomes that we want.”
Your cited examples are a perfect demonstration of the Value Disciplines of Treacy and Wiersema: Operational Efficiency, Product Leadership, and Customer Intimacy. And Bob, you are so right and straight to the point that, “strategy means doing and not doing” - it means ‘Product innovation’ (Do) and ‘Price’ (Don’t) to Apple; ‘Price’ (Do) and ‘Innovation’ (Don’t) to Wal-Mart; and ‘Service’ (Do) and ‘Price’ (Don’t) to Best Buy.
But Strategy also means ‘The Extent of Doing’ - it’s as important as, if not more important than - ‘Doing and Not Doing’. For example, since the 90’s till now, there’s been no shortage of budget airlines imitated Southwest. Most of them failed (JetBlue is one of the few exceptions though). In my view, one of the reasons for their failure is they were operating as a ‘Low-fare’, but not ‘Low-cost’, airlines. Despite they’d made the strategic choice to focus to compete on Price - they didn’t have the required capabilities (i.e. the low-cost infrastructure, operations, culture, etc.) to support an enduring low-price. Price is not a war to fight ‘once-in-a-while’ but it’s an ‘everyday’ brand value, supported by a ‘Low-cost’ system like Southwest’s and Wal-Mart’s. The Execution of those imitated airlines failed their Strategy.
Then, the next reason is about how far, i.e. To What Extent, you’d allow the pains-unaddressed. If I generalize (I hope I didn’t over-simplify but I may) the critical needs of airlines customers as: ‘Price’, ‘Fun’, ‘On-time’, ‘Service’, ‘Meals’, ‘Entertainment’, ‘Upgrades and Preferred Seats’. Southwest’d done superbly on the first three, i.e. their Dos, and generated significant pains on the remaining critical needs, i.e. their Don’ts. Imagine, what if Southwest were a ‘average’ customer-centric org. who held a ‘common belief’ that pains should be addressed, especially the extent of pains are severe and they are highly important to their target customers, would she could still be able to excel outstandingly on those core brand values like she did over the past 39 years?
Notice, it’s not only tolerating pains, it’s pushing them to the extreme - to the extend that near the border-line of the unacceptable levels of customers, so that Southwest could release the resource from compiling the competition standards, to allow AND maximize pains, in order to focus her resource to create significant branded pleasures (Price, Fun, Right-on-time) to her customers. Without a paradigm shift to free and turn upside down our mindset away from the ‘common belief’ of customer-centricity, it could hardly be achieved.
So that’s why I believe, “Strategy means doing and not doing, AND the extent of doing.” It takes both ‘Wit and Gut’. By doing so, one thing I could assure you - not you must be success - you will be the minority.
Sampson Lee
[ Connect Sampson on LinkedIn ]
Daryl Choy
December 22, 2010
The Experience Economy
I'm surprised to read this kind of discussion here. It's nothing new indeed. Go read The Experience Economy again, and there you've got all you need.
Daryl Choy
Make Little Things Count
wisdomboom.blogspot.com
Graham Hill
December 26, 2010
How Customer-Centricity Drives Profits
Sampson
That is a lot of words just to promote a whitepaper! Sometimes less is more.
If you are interested, I posted a more thorough article on How Customer-Centricity Drives Profits in May 2008. Based on the research of Prof Frank Piller at RWTH Aachen, the article points out that real customer-cetricity is about value co-creation, not just being nice to customers.
There is growing evidence that there is a postition where the optimum amount of value is co-created for both a company and its customers. Give more to customers and you quickly start to reduce value for the company. This path leads ultimately to bankruptcy. Take more for the company and and you quickly start to reduce value for customers. This path leads to mass customer defections and ultimately to bankruptcy. Like many things in life, a difficult balance is required in giving and taking value. The new value co-creation frameworks that Wim hinted at provide the foundation for working out what the optimum position is.
Graham Hill
Customer-centric Innovator
Follow me on Twitter
Sampson Lee
December 27, 2010
Will, Should and Must 'Value co-creation' be the ultimate path?
Graham,
Merry Christmas!
It's been a while, so happy to hear your voice again.
Yes it's way too much IF my primary objective is to promote a whitepaper here, and obviously it's not.
Extract from your post 'How Customer-Centricity Drives Profits': "Perhaps the simplest definition of customer-centricity is 'Co-creating value with customers'" and "The $64,000 question is, “What are you doing to become more customer-centric?”."
It seems to me your answer is 'Value co-creation'. So what's your advice on "Will, Should and Must 'Value co-creation' be the ultimate path for most (or even all) enterprises to be a real customer-centric org.?
Sampson Lee
[ Connect Sampson on LinkedIn ]
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