Given that I am a proponent for customer-centricity, I could not help but add my thoughts to Ron’s post since it is at the heart of what I practice and believe as a marketer. As well, I am seeing the trend for customer-centric becoming destined for buzzword bingo and I would hate for it to become meaningless well before its benefits are recognized and experienced.
Ron offers a well thought-out case for what customer-centric is and why it may not in the best interest of an organization (be sure to read all of the comments, too). After thoughtful analysis, Ron arrives at this 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.”
The problem with this premise, however, is that customer-centricity was not been properly defined (the definition from Business in Berkshire is probably the closest definition) nor had the origin of the theory (which is integrated marketing communications circa 1994) been shared.
In order to understand why customer-centric is an operational practice, it is important to understand its history.
A Bit of History
In 1994, Schultz, Tannebaum, and Lauterborn defined what it meant to be integrated and customer-centric with their book “The New Marketing Paradigm.” The paradigm shift they discuss is shift away from mass marketing, removing internal silos and marketing from a customer perspective (including two-way communications).
Since customer-centricity has its roots in IMC, the most correct definition I have seen to date:
“Using outside-in thinking, Integrated Marketing Communications is a data-driven, customer-centric approach that focuses on identifying consumer insights and developing a strategy with the right (online and offline combination) channels to forge a stronger brand-consumer relationship. This involves knowing the right touch points to use to reach consumers and understanding how and where they consume different types of media. Regression analysis and customer lifetime value are key data elements in this approach.”
[The key? Data and relationships.]
From Marketing to Operations
After reading the above definition, you might be wondering how one makes the leap from marketing communications to operations.
Integrated marketing communications is about connecting with, listening to, understanding, and analyzing (communications) customers and delivering (marketing, product development, operations) on their needs and wants, hopefully in a meaningful way that serves both the customer and organizational goals. Perhaps that seems overly simple, but really, it should be that simple.
When I think of an analogy for customer-centricity, I liken it to the customer as the brain and marketing as the heart (and not in an emotional mushy way, but as lifeblood to the organization). I mean, after all, you can’t do much without a brain and heart and the two rely on each other to sustain life.
Marketing from the Outside-In
This is where the Four C’s (Customer, Convenience, Cost, & Communications) come into play. I would posit that they should perhaps not completely replace the marketing mix (Product, Place, Price, Promotions) just yet—who is ready for that?!—but lead them. Therefore, from an operational perspective, nothing goes to market without it meeting the needs/wants of the customer at a cost, convenience to buy and with communications that are acceptable to the customer.
As I have said repeatedly, planning is essential for success. With smart and strategic planning comes measurement and ROI. An organization needs to intentionally plan to be customer-centric. It’s hard work and a complete change in mindset, but it’s possible (read Gulati’s book for examples like Best Buy, Cisco, Target and more).
The reality is that, unfortunately, customer-centric is becoming a buzzword because organizations struggle with focusing on squarely on customers. Short-term gains override long-term value and developing customer loyalty. Is it any wonder that organizations lose 50% of their customers every five years and rely on the ‘marketing machine’ to refill?
Perhaps you have some time on your hands or you really do care about your customers. If so, here are resources to help you get started:
- IMC: The Next Generation (Schultz & Schultz)
- Reorganize for Resilience: Putting Customers at the Center of Your Business (Gulati)
- Turnaround Strategies for Customer-Centric Operations (Roman)
- Building the Customer-Centric Enterprise (Imhoff, Loftis, Geiger)
- Building Customer-Brand Relationships (Schultz, Barnes, Schultz, Azzaro)
- Strategy from the Outside In: Profiting from Customer Value (Day, Moorman)
- Customer Culture: How FedEx and Other Great Companies Put the Customer First Every Day (Basch)
I am sure for some of you I haven’t made a strong enough case–that would take a book. But, what do you think? Should organizations literally bring customers into their operations? Give them a seat at the table per se? Are organizations ready for this?