If You Really Aspire to “Customer-Centric,” Center on These Four Principles
Turns out, people behave (and feel) like people, writes Tim Leberecht.
by Tim Leberecht
A few years ago, I went to my barber shop in San Francisco’s Noe Valley, and as my barber, Arvin, cut my hair I observed his colleague, Jane, who was serving a customer, an elderly woman. When she was done with the haircut and after the woman had paid, Jane took her and her customer’s coats and they left the shop together. I asked Arvin: “Where are they going?” Arvin said: “Oh…she’s been a customer of hers for more than 40 years. She’s 85 now, so Jane drives her home after the appointment. She also does some of her errands, like grocery shopping, for her.”
I was stunned. If this was an example of “customer-centricity,” as marketing gurus call it, then surely our world would be a better place if more businesses were customer-centric.
Of course the customer should be at the center of any business, because otherwise there wouldn’t be a business in the first place. “The business of business,” according to management guru Peter Drucker, “is to create a customer.” And yet, too often, companies lose the plot. Executives talk about this magical idea of “customer-centricity,” even plan for it, and yet, most fail miserably at it.
I once worked for a provider of mind-mapping software that was hell-bent on making visual mind maps the new mental model for everything under the sun. But, it turned out, while most users valued mind maps for ideation and organizing information, they didn’t want them as the central user interface of their lives. “My life is not a mind map!” I remember one customer exclaiming. The lesson is that one shouldn’t confuse customer-centricity with product-centricity — yet you probably will, at some point.
But the truth is, customer experience really matters. Some compelling data points:
- A customer experience promoter has a lifetime value to a company that’s 600 to 1,400% that of a detractor. (Bain)
- 67% of consumers and 74% of business buyers say they’ll pay more for a great experience. (Salesforce)
- Attracting a new customer is 6–7x more expensive than retaining one. (Salesforce)
- One-third of consumers say they would consider switching companies after a single instance of bad customer service. (American Express)
- 56% of people globally have stopped doing business with a company because of a poor customer service experience. Microsoft
- A 2% increase in customer retention has the same effect on profits as cutting costs by 10%. (via Harvard Business School)
But how do you do it? I would like to offer four principles that dig a little deeper than the typical understand your customer, articulate your value proposition, and deliver consistently and conveniently standard formula.
#1 First, understand your customer is fully human
Putting your customer first means putting the human being first. Not just as a segment or a piece of data, but as a living, breathing person — inconsistent, imperfect, moody, exuberant, angry or calm, even unpredictable.
Customer behavior is rarely based on rational calculations, as proposed in classic economic theory. Just look at healthcare. Patient noncompliance is high. Often, noncompliant patients are well aware of the facts regarding their medical conditions. They know how their diseases work, and what the consequences of failing to improve their health routines are. Knowledge, however, often isn’t enough to change their behavior.
This is why simply asking customers about their needs doesn’t work. They may not be sufficiently self-aware to know them, or they may not tell you the truth. Or they may simply lack the vision. Remember the Henry Ford quote: “If we had asked our customers what they want, they would have said faster horses.”
One of the benefits of direct-to-consumer business is that it can try things and get immediate, indirect feedback from customers. One example is the treadmills Nike has in its stores. Store employees run analyses as people test out shoes, so customer data and delight live under one roof.
It also allows for close observation of your customer, and perhaps even the empathy that’s born from it. A manager of the hotel chain Kempinski Group once told me she can detect what a guest needs within just a few seconds, just from non-verbal cues, facial expressions, the outfit and tone of voice. She said she can immediately gauge what a customer truly wants, what mood they’re in, even what they’re going through in life. It’s a skill trained at the Ecole Hoteliere in Lausanne and other hotel schools. Hotel staff are first and foremost anthropologists, observers of human behavior.
Being close to your customers always brings insight, so it is not surprising that CEOs are eager for this kind of immersion. For 40 years now, New Jersey convenience store executive Mike Murphy has been working every Christmas in one of the company’s stores. Starbucks founder and chairman Howard Schulz did theoccasional store shift as well.
As the economist Sir Paul Collier reminds us: An increasingly complex world is less and less codifiable. Thus the ethnographer Tricia Wang insists that qualitative “thick data” must complement big data. Companies that did that work greatly outperformed their competitors: Apple (versus Nokia), Fender (versus Gibson), and Zara (versus Gap).
More and more organizations have added qualitative methods to their customer insights toolbox, including ethnographic research, persona development, or customer advisory boards. Ethnographers, for example, embed themselves in a community of customers without a hidden agenda, with no hypothesis to prove. Their research is keenly focused on personas and cultures, not typologies and segments.
Being truly centered on your customer means acting like a human being and treating them like a human being as well. This might mean listening to them for longer than is comfortable or convenient.
#2 Make them suffer (a little)
One of the myths of customer-centricity is that customers only want convenience and comfort, and most appreciate efficiency and speed. Ethnographers and smart marketers, however, know that customers want to suffer a little bit.
At first glance, this seems counterintuitive. In our age, comfort is king. Instant gratification, maximum convenience, and personalization are the default modes of interaction. Soon Amazon drones will deliver to our doorstep. In Japan, you can now even order a priest visit via Amazon. So why then do people wait in line in front of a trendy restaurant or to be among the first to get the new Apple product? Why are we hiking up to the plateaus of the Alps to catch a few seconds of the bikers flying by during the Tour de France? Why such crazy and very inconvenient spectacles such as the San Fermin bull run in Pamplona?
Evolutionary psychologists believe we are still wired to compete for survival, but in most modern societies, existential threats have all but disappeared. Because we live in an environment that is significantly safer and more stable than that of our ancestors, we lack the “critical events” which assess our fitness, and give us a sense of achievement, of feeling alive. So instead we go mountain climbing, bungee jumping, skydiving, do triathlons, visit dangerous countries, or…we go to…IKEA.
IKEA has perfected the art of frustrating its customers just enough. Putting together a Billy bookcase is a chore, a painful reminder of our existential incompetence. But research has shown that the more emotional labor we put into something, the more value we assign to it. It’s also called the “IKEA effect.”
The more inconvenient the experience, the more significant it feels. The more we endure, the more we belong.
That’s especially true when suffering comes with a purpose, or in the form of a ritual. The ethnographer Jonathan Cook once told me about some fascinating research. In a study of participants in the Thaipusam festival rituals in the island nation of Mauritius, researchers found that those who endured the most painful ritual experiences, such as stabbing themselves through the cheeks with metal skewers, gained a much greater sense of satisfaction than those who merely watched — and donated more money to local temples as well.
Ritual processes have concrete value. A Harvard University study found that when people are given even a simple ritual to perform before eating a chocolate bar, they ascribe higher quality to the chocolate, and are willing to pay more money for it.
What can we learn from all this? Put a metal skewer through your customer’s cheeks? Make them wait? No — at least not always. But two things we can take away:
- Rituals in the selling process and the customer experience can enhance the perception of value and create a strong bond.
- Emotions matter, even for an enterprise buyer. A B2B customer is a consumer who has the benefit of having a company pay for what he desires.
Data can enable personalized interactions, but what customers really want are personal experiences that engage them emotionally. In other words, they want to be taken on a journey.
#3: The journey is the destination
Here’s another customer-centricity myth to be debunked: the primacy of the so-called touchpoint .
A study by McKinsey found that customers are more likely to value a brand experience if it is a comprehensive journey, rather than just a collection of touchpoints. So, understand that your interaction with a customer is always just one moment in the context of a greater narrative.
Like any narratives, like any journeys, it has a beginning and an end.
First of all, as first impressions matter, make it easy for your customer and speak to them in an authentic, human, conversational voice. Make it personal, not personalized.
Then what is your customer onboarding flow? Don’t just think of it as a process diagram. Think of it as a story, and create a sequence of storyboards for it. This will make it three-dimensional, concrete, and people-focused.
When Disney partnered with Frog Design to redesign its Disneyworld experience in Orlando, it paid particular attention to the before-and-after experience, recognizing that it was as important for customer delight as the actual park experience. It created a special smart wristband — called the Magic Band — as the physical manifestation. The band is sent to guests weeks in advance of their trip. The Magic Band and the corresponding My Magic+ platform allow users to enter their preferences, but it also helps create delight, the sense of anticipation, of mystique, of an adventure that’s about to begin. Indeed, research shows that the happiest moment of any vacation is the planning phase before the actual trip.
Disney also realized that the last impression truly matters, and quickly identified the airport security experience as a potentially negative experience eclipsing all of the delight that had been generated at Disneyworld. So they worked with the TSA to incorporate a bit of Disneyism into the experience. They helped design a better navigation flow, and they also treated TSA agents as an extension of their customer service staff, training them accordingly.
What does an end-to-end, door-to-door-customer journey look like for your customer? Create a journey map. Start breaking down the customer journey into various stages, and then identify the experience at each stage. And then link those data points with the emotions your customers report or are observed to feel. Customer experience experts call it mapping out the “emotional landscape” of a customer journey.
The concept of an end-to-end, holistic experience is becoming ever more important, as the experience economy means you are no longer just competing on quality of products and services. You are competing in the experience market as well, competing indirectly with experiences in ALL industries.
#4 Culture: Think garden, not machine
To build a customer-centric organization, culture is indispensable. You could also put it this way: Putting your customers first begins with putting your employees first. Only if leaders think, “what can I do for my employees?” will they have employees who think, “what can I do for my customers?”
Take Netflix, for example. Netflix’s “Culture Deck” became famous for considering employees as mature adults who can decide over their vacation policy, among other things.
Online retailer Zappos, too, understood that front-line employees are the face of the company — in fact, they are the company to the customer. So Zappos experimented with its rewards system. It offered every new employee $1,000 if they quit after three weeks on the job, to filter out those who were just along for the ride and not intrinsically motivated. They also rewarded customer service reps for the length of conversations they had with a customer—the longer, the better (as opposed to its opposite, which is far more common). The more inefficient, the more time they had to connect with real humans.
Culture is elusive, immeasurable. It is not the “product” of a well-engineered process; it is the expression of a world view. It means doing what is unnecessary , even and especially if that is not justified by a quick ROI. Culture is not mechanistic; it is organic. A garden, not a machine.
So, to recap the four principles that can ensure your customer is truly at the heart of your business:
#1 Understand your customer
#2 Make them suffer (a little)
#3 The journey is the destination
#4 Culture: Think garden, not machine
Finally, some concrete action items for you:
- Take note: we are all in the service business now
- Design a data-powered romantic customer journey; start with a journey map, create one for yourself!
- Use rituals for interactions and transactions
- Match external promise with internal culture
- Empower your front-line employees, colleagues, and extended staff
- Don’t let efficiency get in the way of the customer
- Speak the truth
- Remember: the customer is always human
Your customers want to be recognized, inspired, treated with respect. They want you to produce that surplus of enchantment and meaning that has become scarce these days.
Customer-centricity is not the end, but a means to the end. The key question is: How can you improve the lives of your customers and end users? What behavior change would you like to affect? What is your desired impact? How are you going to make this world a better place?
Answer those questions, and customers will come to you. And they will stay with you if you treat them like human beings — loyal like a friend, not because of what you do, but because of who you are.
This article first appeared in the Journal of Beautiful Business.
Photo by Nick Fewings on Unsplash