Being nice to your customers doesn’t make you customer-centric

During a recent meeting, I made what I thought was a casual observation. The group of people with whom I was working weren’t very customer-centric. That message was not received very well (by most of the group). They assured me that they are very empathic toward their customers. They treated them with the upmost respect. Finally, they argued, this particular meeting wasn’t about customers. It was about the relationship between two providers in the supply chain. The issue was how one of the provider’s relationship with the customer impacted the other provider’s relationship. That’s when I knew they didn’t get it. Every conversation needs to be about the customer. The right question to ask was how these two provider’s relationships impacted the customer.

Being customer-centric isn’t the same as being nice to your customer. It isn’t even the same as providing good customer service. Being customer-centric is about whether your business is designed around the needs and expectations of the customer.

In Why We Buy, Paco Underhill provides example after example of stores which are not customer-centric. Their layout, flow, processes, and information attempt to control the customer’s interaction and experience. Underhill points out that such strategies often fail. Customers are persistent. They’ll make the system work for themselves. Trying to manipulate their process doesn’t stop them, it only frustrates them.

A 2008 Harvard Business Review story provided an excellent example of a customer-centric decision at Amazon.com. Amazon used to list the products that it sold separately from the products sold by its affiliates. When searching for a new digital camera, you got a page of the cameras available from Amazon. To see cameras from affiliates, you had to click a link and navigate to another page.

Bezos decided that this was cumbersome for the customer. They didn’t care who sourced the camera. They just came to Amazon.com to get one at a good price. Despite objections from his purchasing and sales people, Bezos made the change. He said that the most important consideration was meeting the customer’s need. Overall revenue for Amazon increased. Optimizing for the customer rather than the business (or perceived needs of the business) won out.

Customer-centric organizations are aware of three major changes in consumer behavior.

• Formal expertise is now distributed and the expert’s role has changed from being the ultimate source of truth to being one of many opinions.
• Customers expect a lot of information about the products and services they are buying
• Customers control the process

They work to adapt their processes and business models to these changes.

Some companies and industries seem to be resisting these trends. Sometimes there is large-scale resistance in attempts to legitimize their experts through regulation and laws. Other cases are more subtle such as a simple website design or process that forces the customer to see the description of a product before show him or her the price”.

Ultimately, I believe that these industries and companies are going to lose out.

It’s time to move from focusing on being nice to customers to adapting to their needs. There are no longer decisions that don’t impact your customer. If you don’t start out by asking how a decision helps or hurt your customer, you are not being customer-centric. And this doesn't just apply to external customers. Many enterprise-based departments are working to become better partners with the front-line business. The problem is that while they are trying to improve service, they still have processes, tools, and policies that are optimized for their function rather than the need of the customer.