The Problem With Customer-Centricity

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A 2007 CMO Council survey asked 477 B2B IT users to rate their technology vendors, and, apparently, surveyed the vendors as well. The study found that 56% of vendors perceived themselves to be extremely customer-centric. Only 12% of their customers agreed, however.

That’s a big gap. One group must be wrong, right?

Not necessarily.

Of all the marketing lingo and jargon, there’s probably no term so poorly-defined yet frequently used.

I mean, really, what exactly is customer-centricity?

I’m sure it’s something I want to be, and sure it’s something that if I am it, then I must be satisfying my customers, improving my NPS score, and driving up my profits, right? Right?

But what is it? How do you define it? If you buy into the notion that “if you can’t measure it, you can’t manage it”, then, how do you measure it?

Your guess is as good as mine. Or, to be more precise, your lame and feeble answers to those questions is probably just slighter better than my lame and feeble answers to those questions.

So it’s entirely possible that both the IT vendors and their customers were completely right in their assessment of who’s customer-centric. They could be using different definitions of the term.

I googled “customer centric definition” and found some entries:

“An approach to doing business in which a company focuses on creating a positive consumer experience at the point of sale and post-sale. A customer-centric approach can add value to a company by differentiating themselves from competitors who do not offer the same experience.”

“Placing the customer at the center of a company’s marketing effort, focusing on customers rather than sales.”

“Being Customer Centric is about an ability for everyone in the company to continuously learn about Customers and the market. It is also the responsibility of everyone in the company to respond appropriately to what we learn.”

Hmm. Those don’t quite do it for me. After all, a firm could “focus” on “creating a positive customer experience” but if it fails to do so, would it qualify as customer-centric? In addition, any firm can claim to focus on customers rather than sales — how would we know if they really do or not? And, c’mon now, there are plenty of companies that strive to “learn about customers and the market”, and then take those learnings to stick it to customers.

I also found some hoo-ha about the “6C’s of customer-centric DNA” which shouldn’t be confused with the “6 laws of customer experience excellence.” Neither of which deserves links provided here.

The best attempt I’ve seen to define — measure, would be a better word to use here — customer-centricity comes from Carlos Dunlap from Kobie Marketing. In the November 2010 issue of Loyalty Management magazine, Carlos outlines a framework with four dimensions  — organizational readiness, data, IT support, and analytics — that helps companies calculate a score to determine how customer-centric they really are.

It’s a good approach, and definitely worth evaluating your company on.

But I think it misses a simple point: Being customer-centric means making decisions that benefit your customers, potentially at the expense of your firm’s short-term profitability. Emphasis on potentially and short-term.

If your company can’t point to a systemic history of making decisions that puts customer satisfaction and customer benefit ahead of firm’s short-term profitability — that is, making decisions with the belief that it will improve customer loyalty and retention in the long run — then I, your humble blogger, refuse to believe that your company is customer-centric.

Is being customer-centric better, then, than customer-uncentric? You can’t unequivocally say “yes.” Many of us might prefer to work for firms that are truly customer-centric because that’s what we’re more comfortable with. But what if you could make a million dollars this year working for a firm that is customer-uncentric but only $50k for a customer-centric firm, would you do it? Not an easy decision.

Bottom line: All this talk of customer-centricity is an utter and complete waste of time. The term means nothing. There’s no common definition, no definitive way to measure it, and therefore, no real proof that a company that claims to be customer-centric is any better (for any of the stakeholders) than any other firm.

If your goal is to make your company become more customer-centric, you’ve defined your goal incorrectly.

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