Customer-Centricity is Dead! What’s Next?

what is customer gap

Dick Lee asks a provocative question in his new white paper: What’s next after customer-centricity?

He sums up customer-centricity as follows:

The common implementation-level model coalesced into a structure implementers could grab onto and follow. Theory aside, becoming a customer-centric company meant an amalgam of customer-driven business strategies, customer-aligned process, CEM, CRM (customer relationship management) technology – and a dollop of highly targeted marketing, often supported by marketing automation technology and marketing analytics.

What Dick seems to be saying is that customer-centricity is a mashup of different ideas. Start with a little CRM, season it with CEM, then add process management and analytics as side dishes. Voilà – you’ve got customer-centricity!

While it’s true that these concepts are all out there in the market, in my research I don’t find any consensus on what customer-centricity is, or isn’t. There’s no common implementation model. Some promote the CRM model and others the CEM model. Some say the answer is to create a “social business” and others believe companies should “compete on analytics.” And each can claim, at least in part, that they are “customer-centric.”

According to Dick, customers are becoming more individualist, more cynical, less civil and increasingly turning from “hunted” to “hunter.” I largely agree, but see this as just a continuation of consumer empowerment that’s been strengthening for decades.

But I think it’s worth discussing some of the “Assumptions” and “New Realities” that Dick asserts in his paper. Are these really new or even happening as Dick describes? (Note: the bolding is mine.)

Undercut Assumptions

  1. Assumption: Customers are looking for win-win relationships with companies

New reality: While sentimental “Main Street versus Walmart” customers will never disappear, most buyers want the best deal for themselves, without regard for seller welfare. “What can you do for me next?” is replacing “What have you done for me lately?” In buyer-seller relations, the past is no longer prologue.

My take: I’m not sure that buyers ever had much concern for the seller’s welfare, except in some edge cases like small towns. But smart companies that succeed strive to deliver value (win for customers) while driving company value (win for company). Win-win is a company strategy, not the customer’s strategy.

  • Assumption: Most customers are willing to “play nice”

    New reality: More and more customers, even Boomers, are “going over to the dark side.” Buyers are becoming more cynical, jaded, mistrustful and resentful of sellers – leaving them quick on the trigger when companies cross or fail them. With so much negativity in play, even wowing customers with great service doesn’t necessarily carry through to the next interaction. Moreover, customer pushback is now expanding to include seller positions on social issues, a real powder keg.

    My take: This is overly negative. The research I’ve seen is that the majority of online reviews are positive. However, it’s certainly true that it’s easier for a negative situation to go viral. As Dave

    Carroll of United Breaks Guitars fame says: “No customer is statistically insignificant.”

  • Assumption: Sellers can accurately profile their customers

    New reality: Market segments are splintering into “universes of one,” leading to increasingly idiosyncratic customer behaviors. That doesn’t bode well for profiling, which even previously seldom met predictive expectations, except in the hands of the very best customer analysts/statisticians. Nonetheless, overuse of profiling will die hard, because so many customer-centricity advocates have built executional models around it.

    My take: I have exactly the opposite opinion here. Analytics technology is getting simultaneously more powerful and easier to use. I think the future of 1:1 is finally becoming possible, and won’t depend on just the hands of a few “statisticians.”

  • Assumption: Buyers appreciate frequent seller contact

    New Reality: Here’s another assumption that will die hard. Maintaining constant customer contact gives marketers work to do and their agencies a revenue source. But customers face such an immense volume of “buy, buy, buy” messaging, little of which they believe, they’re pushing all of it away – even messages offering real value to them (which, admittedly, are few and far between).

    My take: Don’t agree with the assumption, and the reality is already here. Targeted and relevant messages are, and have been, more likely to be acted on. That said, Dick is right that it’s still all too easy for marketers to spray and pray (social media is latest attempt). Smart marketers have known better for a long time.

    In general, while I agree with the general trend of consumer empowerment, the “new realities” seem like an overly dire outlook for companies.

    Dick wraps up with this: “What will be left of customer-centricity – and will it still matter?”

    Actually, as long as a sizeable portion of the customer base continues to “pay nice,” tactics developed within the context of customer-centricity will continue seeing widespread use. However, customer-centricity will be one way of interacting with customers – not the way as advocates have always hoped. And the more buyers try insulating themselves from sellers, a train that’s definitely left the station, the smaller role customer-centric business practices will play. Rather a quiet winding down of a “movement” that created high hopes, lots of noise, and at least some action. However, time marches on…as do customers.

    My take is that Dick is looking at customer-centricity something like Sampson Lee, who says Customer-Centricity Is Not the Solution; It’s the Problem. And like Sampson, Dick is right — IF you think of customer-centricity in the way he describes. Do you?

    I believe that customer-centricity should be about delivering customer value in a profitable business model. I don’t think that’s going out of style anytime soon, even if the “new realities” come to pass as Dick suggests.

    Dick’s thought-provoking paper is available for free download (no registration required) in CustomerThink’s premium content library: After Customer-Centricity Comes…?

    Take some time to read it, then add your comments!


    Category: Forex

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