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How much of business is truly customer-centric?

By Madhukar Sabnavis
April 02, 2010 17:14 IST
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Customer centricity is about understanding the ecosystem in which a product is operating in the customer's life and working towards making every element of the ecosystem friendly and enjoyable to the customer, says Madhukar Sabnavis.

Customer centricity is a word bandied around the most across conference rooms and in business discussions.

Yet most debates in boardrooms focus on either product centricity (what are the strengths of our product and how do we make it relevant to consumers?) or competition centricity (how can we make our product look and feel better than the competition?).

While there is a focus on the customer's view in such discussions, everything starts either from inside (our product) or from the world immediately outside us (other products). The customer exists only for us to make the sale to.

Most customer researches also reflect the same bias. The research either explores the relevance of our product in customers' lives or explores how our product (and its communication) is being perceived vis-à-vis competition. So, how much of business thinking is truly customer-centric?

The Japanese school of TQM (Total Quality Management) ensures that every product that comes off a production line is defect-free. This reflects the Japanese penchant for "perfection in everything".

It helps increase production efficiency and ensures nothing needs to be reworked. It helps the customer get high-quality, reliable products. But was TQM an outcome of customer centricity or a by-product of cultural attitude and production excellence coming together?

Many brands, especially in the fast-moving consumer goods category, have offered product in different pack sizes and forms to enable the consumer to buy more of it.

Is this customer-centric thinking or still inside-out thinking, that is, business generation thinking? How can we get more revenue from the customer by making the product more accessible, convenient for her to buy it more times?

Customer centricity is about understanding the ecosystem in which a product is operating in the customer's life and working towards making every element of the ecosystem friendly and enjoyable to the customer.

It is about understanding the category and product journey from the time of purchase to consumption and ensuring everything in its experience is so positive that the customer comes back over and over again.

The importance of customer-centric thinking gets heightened when you think of services. Unlike product brands where the actual item transacted is tangible, service products are forced to think more holistically of the customer's ecosystem to deliver real value.

For Starbucks, the cup of coffee is only one element of the customer-brand transaction. Everything from the environment to the seating to the barista and even the coffee machine and the crowd around make the customer pay a premium for the cup (which could cost quarter the price in a shop down the road) and get her to come again and again.

Similarly, in the case of a bank, the money transaction is only one element of the relationship. The actual office, the executive and, if there is web and phone banking, the actual experience of transacting electronically make for the total experience.

Customer centricity is about understanding expectations at each point of contact and making it most efficient and comfortable.

Interestingly, every "product" brand is also a service, the only difference being that the service is done by someone else, often the customer herself! This means that for many product brands, the service is not within the control of manufacturers and marketers!

In this context, the evolution of Asian Paints as a brand is instructive. Over the last two decades, it has evolved from being a brand in a "paint can" as it was in the 80s, to striving to be a "paint service" brand with a helpline, a home solutions offering and a signature store in Mumbai where customers can come in and experience first-hand the process of selecting shades and being advised about the same.

This evolution has been guided by the brand's philosophy of "taking pain out of painting". This philosophy is built on the understanding of customer's painting ecosystem.

While paint is a small component of the whole painting process, the painting cycle is painful and if a paint brand needs to grow and remain relevant to a customer, it needs to address this pain!

Traditionally, marketing has been seen as the custodian of the customer. However, to be truly customer-centric, it needs to go beyond marketing. It's a philosophy that needs to be embedded within the culture of an organisation.

There is merit in the Japanese pursuit of perfection in the factory line - because that's a requirement to give a hassle-free product to the customer. However, it should even extend backwards into R&D - functionally and aesthetically.

It should be extended to purchase and post-purchase points of contact including packaging and complaint handling. This means every person in a business must be aligned to brand vision and customer expectations and work towards delivering it.

The R&D needs to develop products with customer delight in mind; just as much as tele-callers need to say that every query or complaint needs to be handled satisfactorily and completely, and the R&D must be empowered to do so too!

The implication of communication is interesting. Traditionally, marketers have seen brand-building communication as an activity that is aimed at the outside world - to get customers to see their brand in a positive light vis-à-vis competition.

As we move forward, there is perhaps an equal need for internal communication which ensures internal audiences do everything keeping the customer in mind. Even traditional external brand messages need to be more sensitive to customer mindsets.

Magnifying the same message across different customer points of contact, insensitivity to customer messaging needs at that point of contact is not only ineffective but also displays a lack of customer centricity.

In sum, as we move towards making customer centricity the core of an organisation, it is important that every member of the business is a custodian of the customer and everyone understands the ecosystem in which the product is consumed.

Something worth thinking about.

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Madhukar Sabnavis
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