"The business of business," according to management guru Peter Drucker, "is to create a customer." Sounds like a no-brainer: Of course the customer should be at the center of any business, because otherwise, well, there wouldn't be a business in the first place. And yet, it is a banality that needs frequent revisiting. All too often, companies navel-gaze, become absorbed by internal bureaucracy, or both. Truly putting the customer at the heart of their operations remains a daunting challenge, and one that has proved to be a boon for consultants: The magical idea of "customer-centricity" is one that executives talk about, aspire to, and yet, most would admit, fail miserably at achieving.
Customer-first means experience-first
Customer experience has become the main battleground for brands in the experience economy. Research shows that 25 percent of customers will defect after just one bad interaction. Today's customers have "liquid expectations": They expect, 24/7, omnichannel service, and compare it with every other brand experience they have, not just direct competitors. In other words: Whether you are a hospital, a school, a bank, a lawyer, or a manufacturer, the "gold standard" of experience will be your customers' main reference point; they will compare you with Amazon, Airbnb, Netflix, or any others that are viewed as masters of experience. Furthermore, their experience is as much (or more) about the whole journey and not just the destination. According to McKinsey, customer satisfaction with health insurance, for instance, is 73 percent more likely when a customer is delighted with the entire experience and not just some of the touch points.
Honor the "thick data"
So why is being customer-centric so hard for companies?
One problem: Companies are often inundated by quantitative metrics, neatly arranged on various dashboards, giving them merely the illusion of understanding customer behavior. I can't tell you how many strategy offsites and internal marketing summits I have attended where customer-centricity was all the rage but there was not a single customer in the room. When I asked managers why that was the case, they would respond by pointing out that having a few customers take part would not only not yield any accurate or statistically relevant results, but it would also distort the overall picture and, worse, sway the staff.
Companies tend to surrender to "quantification bias," confusing a swath of quants with truly being close to the customer. But as the economist Sir Paul Collier reminds us: An increasingly complex world is less and less codifiable. Thus the ethnographer Tricia Wang insisted at a recent behavioral science conference that qualitative "thick data" must complement big data. Companies that have done so outperformed their competitors, she pointed out: Apple (versus Nokia), Fender (versus Gibson), and Zara (versus Gap).
Granted, thanks to the rise of design thinking, more and more organizations have added qualitative methods to their customer insights toolbox, including ethnographic research, persona development, or customer advisory boards. But the challenge remains, and it is two-fold: understanding the customer and then translating it into action.
So what to do? Here are a few pointers:
Listen beyond the transaction
First, given the importance of the customer journey, make the design function the customer's advocate and empower it as a strategic driver. This implies going beyond mere lip service and equipping it with actual power. If you were really bold, it might ultimately mean changing the org chart and having product report to design, as, for instance, ridesharing company Lyft has done. The company's VP of design, Katie Dill, oversees everything from customer experience to product development.
Second, customer-centricity is not the same as product-centricity, so don't push your product by all means. I once worked for a provider of mind-mapping software that was hell-bent on making visual mind maps the new mental model for the enterprise -- and everything else under the sun. But, it turned out, that while most users valued mind maps for ideation and organizing information, they didn't view them as the central user interface of their lives. "My life is not a mind map!" I remember one customer exclaiming with a sigh.
Patagonia serves as a prominent counterexample. Its "Don't Buy This Product" campaign featured ads in leading dailies on Black Friday, advising customers not to buy its clothes. It was meant as a radical statement against consumerism and demonstrated what trumps product, always: customer attachment based on shared values.
To find out what your customers truly value, third and most important, listen! The head of design at a travel platform startup recently told me: "If we really wanted to become customer-centric, we would have to refrain from execution mode. But that is just not in our DNA. Customer-centricity requires that we actually stop doing what we're doing and simply pause and listen."
Some companies have introduced fancy and virtue-signaling new job titles such as Chief Listening Officer, but actual, intentional listening remains scarce. In his seminal Theory U, MIT's Otto Scharmer distinguishes between four modes of listening: downloading, factual listening, empathic listening, and generative listening. Listening exercises have long been a part of management trainings, but in reality listening is still rarely empathic or generative. Most workplaces, despite the recent rise of mindfulness practices, still favor outcome-oriented "productive" conversations that resemble the famous lines from The Little Prince: We look without seeing, and we hear without listening.
We all know the type of conversation in which the other party doesn't really listen and instead prepares in their mind their own remarks, impatiently waiting to jump in at the next possible chance. We are, in fact, so detached from actual listening that a simple active listening exercise (one basic rule: Do not comment or interject. Simply pay attention and listen carefully) appears somewhat profound, almost like a surreal experience.
Relationship issues are conversation issues
Listening to customers is hard, because we already struggle with listening to our colleagues. How can we expect to have meaningful conversations with our customers if we are not even able to have them within our team?
João Sevilhano, partner of strategy and innovation at coaching firm Way Beyond, compares in a recent essay the conversations of teams to those of lovers. Romantic couples move from the initial delight of getting to know each other's dreams, quirks, and vulnerabilities to making plans together and then to coordinating action. Finally, he observes, "We spend 90 percent of the time talking about what has to be done." At that point, results replace curiosity, and lovers and teams alike rarely discuss the way they communicate: "How many teams do you know that talk about the way they talk? I'm not referring to one-to-one conversations on the hallway or next to the coffee machine. I mean the time spent in conversation as a team. I don't know that many, but the ones I do know are outstanding teams."
The customer relationship, too, is often compared to a romantic relationship, but a study by market research firm GfK shows that it's more complicated. It breaks down the types of customer relationships into strangers, buddies, close friends, flings, one-night stands, marital partners, and even former friends (it is worth noting that customer-brand relationships can indeed be love-hate relationships, too).
Be a student of life
To find out which type of customer relationship you have, customer proximity is key: In a marketing class at NYU's Stern School of Business, MBA students once created small "altars" featuring all kinds of artifacts and memorabilia from their customers' lives, in an effort to view them as complex human beings who seek experiences mostly for the sake of memories.
Starbucks former CEO and chairman Howard Schultz was known for the occasional cameo shift as barista and reportedly was pretty good at it.
Not everyone's so adept, though: Senior executives of Australian retailer Coles once went shopping in their own stores to better understand their customers but baffled the public by failing to coordinate budget, time, and portions (one of them even estimated that two liters of milk might last two weeks for a family of four).
This shows the most important prerequisite of customer-centricity: to embrace life in all its facets -- or have one, to begin with.