Is customer centricity a realistic goal?

The idea of customer centricity is not new – I’ve been on the bandwagon since 1995 (yikes!), but few firms have successfully made the transition. Why? Well, I think those that have tried and failed either made changes that were so dramatic the organization couldn’t digest them or failed to make changes that were dramatic enough. Easy for me to say!

      

First off, the move towards customer centricity has to be led from the top, grass roots efforts don’t work. But, even so, the right approach will vary for different companies. A few examples:

    

• Most aggressive: Best Buy reorganized around key customer segments. The company created five key personas and focused its efforts – everything from merchandising to the channel (both store and Web) experience around those personas.

• Medium aggressive: Starwood created customer centric brands. Starwood was the first hotel group to break from the traditional price-point segmentation model and adopt a lifestyle segmentation scheme. Each brand is positioned around the emotion and experience that the customers it serves crave. I’m not sure what this says about me but I have to admit I’ll take the Heavenly Bed at the Westin any day over the chic trendiness of the W.

• Least aggressive: P&G layered customer initiatives on top of its existing structure. Changing the product-centric legacy of the consumer goods industry will surely be no easy task. But, Proctor & Gamble’s innovative approach was to create a marketing program called Home Made Simple that enables the firm to market across its brands to customers with common needs.

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Comments

[Carol]

The pull towards product centricity is deeply rooted in marketing culture. After all, one of the 4 Ps is product and another is place! Because of this, I think many companies organize around these two key principles giving rise to both product and channel silos.

The practice of product oriented marketing is extremely strong in my industry, B2B technology marketing. Most B2B companies are founded by strong technologists who believe the product is the company. In fact when new companies are founded, the product and the company are typically synonymous and the organization is focused on just one market segment, the "early adopters." But as a company matures, the need to reach into and organize around new market segments becomes critical to growth - it's a hard transition.

We also have many organizations dedicated to product marketing such as the AIPMM, and Product Management Associations in Boston, Silicon Valley, Toronto, Vancouver and so on. Where are the associations for “customer segment” marketers? While the product marketing and management associations stress the need to make the customer the design point, the organization names still focus on the product.

I am lucky because our CEO, though a technologist, knows the customer is what counts. We have a “customer success” group that is not on a commissioned sales plan and is offered at no cost to our customers. Their sole mission is to help ensure our customers are successful and getting maximum value from our solutions. We do not have a product marketing group; we have a segment marketing group. Each segment manager focuses on one or two customer segments with the mission of understanding the business needs of their customers and working to deliver solutions, services, information and marketing to meet those needs.

But even here, there is always a pull towards product marketing. Who will create the product collateral? Who will manage each product launch? Many products are relevant to several segments. These are practical and difficult issues to tackle in an organization structured by customer segment, but they are manageable. Nearly every time we hire new leaders into the company, they struggle with our lack of product marketing and hint that perhaps we should reorganize. It’s more comfortable to be organized by products. It maps to people's past experience. Segments introduce new complexity. And sometimes even I bemoan that I don't have any product marketers. But I'm still convinced the segment model is helping us serve our customers better.

What have other companies experienced? I’d love to hear more thoughts from both B2B and B2C marketers.

[Ardath Albee]

I think customer centricity is a realistic goal. For my company, although we have a terrific product that's a sales optimization platform, we discovered that to become customer centric we had to embrace being a services company.

It's more important how a software product is used and helping customers do the strategic thinking that will have them be successful in their implementation of it. The practice of delivering the software implementation as a done deal, ready to launch, means that you're partners with your customers in their success.

I think to be customer centric means your business has to be focused on serving your customers needs. The product may be killer, but if they aren't successful using it, then you haven't served the customer.

The interesting point in all this is that your focus on the customer being successful using your product leads you to improve the product to meet needs better, so it's a win for both sides.

Ardath

[Colin]

Customer centricity is an essential goal. Anything less is going to be product focussed, or single channel focussed.

We have to consider the media savvy consumer of the 21st century armed with spam killing devices such as, e.g..

* firefox ad blocker
* popup blockers
* tivo for skipping television ads
* gmail with advanced spam blocking
* wordpress blog hosting with blog spam comment blocking
* online bill presentment (so no mail spam with the bill)

The solution is not going to be simple, but will have characteristics that are diametrically opposed to old marketing:

- inbound vs outbound
- listening vs telling
- niche vs mass
- authentic vs spin

[GrahamHill]

Elana

This looks like being an interesting journey.

One of marketing's many current problems is that it is an almost exclusively inside-out thing. Marketers look for target markets to pitch their existing products at. Once a customer buys, they switch to looking for individual customers to pitch their existing products at. The customer is almost an after-thought.

Whle marketers stay so out of touch with real customers, with their perceptions of what constitutes value for them and with their perceptions of how that value should be delivered over the end-to-end customer experience, we should not be suprised that marketing is becoming the troubled corporate child.

Just rearranging the pieces on the organisational chess board to focus on customer segments rather than product groups or geographical territories won't make much of a difference until the customer is really brought deep inside the marketing orgainsation.

Graham Hill
Independent CRM Consultant

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[Mesothelio]

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[Lindell Welch]

I think a lot of corporate moguls had missed the point on customer centricity. They thought it is as simple as giving their customers their needs.