Customer Centric means “thinking about the customer while designing your product and overall experience”.
There are various facets to the customer:
- Tasks – as in jobs to be done
- Preference – as in taste
- Interest – as in vested interest
- Welfare – as in happiness
- All of the above
Which facet should customer-centric credo think of?
When I did a snap poll in my circle, all 10 out of 10 people selected Option 5.
In this blog post, we’ll do a deep dive into the topic of customer centricity and arrive at an answer to the above question. (Spoiler Alert: It’s not even close to #5.)
Let’s get into it.
Investopedia provides the following canonical definition of Customer Centric:
Client-centric, also known as customer-centric, is a strategy and a culture of doing business that focuses on creating the best experience for the customer, and by doing so builds brand loyalty. Client-centric businesses ensure that the customer is at the center of a business’s philosophy, operations, or ideas. Client-centric businesses believe that their clients are the primary reason that they exist, and they use every means at their disposal to keep the client satisfied.
Going by this definition, Customer Centric surely requires thinking of the customer’s tasks.
As a customer centric product / service provider, you think of the customer’s job to be done, work back from there, and then build your offering in such a way that your customer is able to do his or her job with the best possible experience.
The proviso “with the best possible experience” implies that you do need to also think about the customer’s preferences – after all, unless your product helps the customer do what they want in the way they want to do it, it won’t deliver a good CX.
There are dozens of companies that have built their products and services around their customers’ tasks and preferences. By baking customer centric ethos into their corporate DNA, they’ve been richly rewarded by way of traction, stickiness, and enterprise value – if not also revenue and profit. Exhibit A: Amazon, Apple, Microsoft, PayTM, Uber.
Here’s what Investopedia says about Apple, a poster child of Customer Centric company:
Apple builds a smartphone and then creates a closed ecosystem around it to maintain a seamless and safe user experience.
Moving on to Interest and Welfare.
There’s nothing in the definition of Customer Centric that stipulates that a customer centric company must consider the interest and welfare of the customer.
Let’s see how the Hall of Fame of Customer Centric companies fares on these counts.
Back to Investopedia:
Locking in customers with superior service is the go-to strategy for client-centric companies.
Locking in. Hmmm.
Locking in aka vendor dependence could lead to slowdown in innovation and / or higher prices, as it has reportedly done in the case of Apple. Some people even call this “monopoly”. While that’s an incorrect categorization in the strict sense of antitrust law, there can be no doubt in anyone’s mind that sluggish innovation and price gouging are not in the best interest or welfare of customers.
But it’s not only Apple.
In Will Digital Payments Survive Fraud? Only Marketing Can Tell, we saw how Microsoft, another customer centric forerunner, created lock in with Windows.
PayTM, another flagbearer of customer centricity, did worse than slowing down innovation or price gouging, as I highlighted in PayTM Shows How #FeatureOrBug Can Erode Trust.
I could go on and on but I’m sure you get my drift:
Companies that are hailed as customer centric icons because their products / services are shaped by their customer’s tasks and preferences do not necessarily keep their customer’s interest or welfare at the forefront of their corporate ethos.
From the above, it follows that the answer to the question at the beginning of this post is:
Customer Centric means thinking about customer’s Task and Preference, but not necessarily Interest or Welfare.
The right answer is #1 and #2, not #5!
If you’ve read so far, you may have a niggling feeling about the part of the definition of Customer Centric that says: “they use every means at their disposal to keep the client satisfied”.
You may be thinking, how can a customer be satisfied unless a company has truly taken care of their interest and welfare? Accordingly, how can customer centric exclude #4 and #5?
You’re right about having this feeling but I’d turn around and ask you to name five companies with whom you’re satisfied.
I’m sure there are a lot of companies with whom you’re reasonably satisfied including the exhibits of customer centric firms I mentioned above. But are you really satisfied with them? All of them? Some of them? Even one of them?
I thought so too.
Amazon is considered the forerunner of customer centric culture. And rightly so: I’ve been shopping on Amazon for over 20 years across Germany, UK, USA and India. During this period, I must have placed at least 200 orders on Amazon. Knock on wood, Amazon hasn’t even bungled a single order so far! That can’t happen without a humungous amount of customer centric ethos in the company’s DNA.
But I won’t say that I’m totally satisfied with Amazon. At times, its Customer Service has sucked bigtime.
Customer Experience is not same as Customer Service. After enjoying great CX when nothing went wrong in 15+ years, it's only after facing acute delivery problems in the recent past that I realize that Amazon has never provided phone, email or chat support.
— Ketharaman Swaminathan (@s_ketharaman) December 15, 2017
On occasion, I’ve thought of decamping from Amazon. Click Strange Happenings In Amazon and Should I Look For An Alternative To Amazon India? to know why.
While I haven’t found a good enough ecommerce alternative to Amazon – Flipkart CX sucks! – my wavering satisfaction level for Amazon has made me create the following three-strike rule:
Amazon Three Strike Rule: I’ll look around in my neighborhood and buy from Amazon only if I don’t find what I want in three or more brick-and-mortar stores.
I’m easily able to adhere to this self-imposed rule since there’s an abundance of physical stores in the neighborhood of my home and office.
It’s not only Amazon.
One of my ex-employers was ranked #1 on C-SAT in the Indian IT industry. When we used to go around proudly announcing the result of the survey conducted by a leading IT magazine of the the time, the go-to rejoinder of customers would be “We’re not all that satisfied with you. You got the award because your customer service is the least bad”.
Least bad!
I can’t speak for all industries but, at least in tech, it’s rare to find a company whose customers are totally satisfied with it. “Least dissatisfied” is often the best accolade that IT companies can hope for, however customer centric they are!
Just because you’re buying from a company reputed to be customer centric, you should not assume that the company will keep your best interest and welfare in mind at all times. The truth is that companies are neither obliged by convention nor by law to do so. To that extent, there’s a bit of obfuscation in the expression “Customer Centric”.
This reminds me of the following paragraph from my blog post titled Fintech Shouldn’t Stop Chanting The Disruption Mantra:
The few successful fintechs will sell out to traditional banks. Out will go their song and dance about taking care of consumers’ interest, yada yada yada. So the average customer shouldn’t expect fintechs to drive banks and financial institutions to reduce their hidden charges.
Overdraft Protection Fees is Exhibit A of my prediction: As reported in this FORBES magazine article – in which I’m quoted! – American megabanks continue to levy this controversial charge despite the fact that free overdraft has been the go to value proposition of neobanks that have been threatening to kill banks for nearly a decade.
Although I issued the above warning in the context of banking and financial services, it’s equally relevant in almost all other industries.
End of the day, Caveat Emptor is a best practice when you buy from anyone, including the companies in the Customer Centric Hall of Fame. The Latin maxim that means Buyer Beware originated in the Roman Era 2000 years ago but it’s applicable even today.
This post reverse engineers my personal experiences with many customer centric companies to deduce what they truly care about. It does not prescribe what a given company should do.
By all means, a product or services company can feel free to push the envelope of being customer centric and build its offering to fulfill interest and welfare – not just task and preference – of its customers, if that’s what floats its boat.
UPDATE DATED 24 JUN 2023:
As I’ve reported in the original post and many earlier posts, I’ve been experiencing a gradual erosion in Amazon’s customer centricity over the years. With the recent action by the US Federal Trade Commission (FTC) against subscription trap in the Amazon Prime service, I think it’s safe to say that Amazon is no longer on the top of the league table of customer centric companies, to put it mildly.
Keen to know the status of UNSUBSCRIBE Act, which was supposed to outlaw dark patterns for all subscriptions in USA.
— Ketharaman Swaminathan (@s_ketharaman) June 23, 2023
