This article was originally published on our Medium Platform Rethinking Organizations.
Customer centricity is what all influential organizations talk about these days. Many big companies declare their strategy as customer-centered, put customer obsession in their values, and try to change their product-driven approach (focusing on specifications) to being customer-driven (concentrating on the value it creates for the customer). (1)
Putting the customer at the center of an organization is not a new idea. Legendary management consultant Peter F. Drucker wrote, ‘The customer is a foundation of a business and keeps it in existence.’ in 1973. (2) But according to research conducted by IBM in 2004, CEO’s ranked customers as the sixth factor that would drive change in their organizations. (3)
Today, no CEO would dare to put “customers’’ so down in the list. There is a growing body of research-based evidence showing customer-centricity is a significant indicator for a business to thrive; as such, the necessity of customer-centered transformation is the talk of the town. (4)
Yet, are we sure we all mean the same thing when we talk about being customer-centered? Let’s see how we can make sense of the concept using a simple example: The Bakkal.
Bakkal is a very traditional business in Turkey, a local grocery store where you can get your daily needs. They are found in almost every neighborhood, and people who live in the community probably know who their Bakkal is. (The term Bakkal both refers to the store type and the person who owns and runs the store.)
Now let’s imagine a Bakkal who is going through a ‘customer-centered transformation’; what would the perspective shift look like?
Transformation Day 1: A Bakkal’s Customer-Centered Strategy
After many hours of thinking when there were no customers inside the store and reflecting, our Bakkal has realized that he (given the fact that it is primarily a male profession) indeed needs a customer-centered strategy. In his vision, his store is a place where customers line up in a queue all day, every day, to the maximum point he could keep up with the demand. Customers are shopping as if it is a ‘Black Friday’ every day. He understands that, to make that he has to make every customer very happy.
Something seems off, though. Is wanting more customers and hoping to make more people happy a customer-centered strategy? Well, it is not. Too often, we mistake our goals with strategy and end up with no strategy at all.
A proper customer-centered strategy would be built around a unique human insight. This insight should shed light on why people would be willing to come to his store. What could this be? Could it be the simple convenience of the store? Maybe Bakkal is a place where customers feel they belonged. Is it the nostalgia or simple human-to-human connection that makes this place so valuable to them? Or it is just because people hate big stores where they feel everything is engineered to make them buy stuff they don’t need. Instead, Bakkal offers trust where you believe you get things you need only in a ‘just’ way.
If he can crack the code through a human-centered perspective, he can build a strategy that will lead his Bakkal into the future with new possibilities and probably many innovations.*
*Fun Fact: If your strategy doesn’t inspire innovation, it is probably not a real strategy.
Transformation Day 2: A Bakkal’s ‘Customer Obsessive’ Values
Between serving two customers, our Bakkal has reminisced about yet again another Peter Drucker quote which goes as ‘Culture eats strategy for breakfast.’ Now that he has a strategy, he has to figure out how to make sure culture enables that strategy to come to life.
One of the easiest ways to do it is putting a sign on the wall that says: ‘My value is to make my customer happy.’ Bakkal might think it will make a difference because once people see that, they will believe that this Bakkal is customer obsessive and always work for their best interest. The sign will send a message for sure, but it will not make customer obsession a reality. We hear many companies also tend to adopt a similar approach. They claim that they put customers first and they make sure every outlet reflects this claim: value statements on the wall, interactive web pages, even pop-up customized wallpapers for their employees. Yet, it is only when we start to ask tough questions, we realize that this self-acclaimed customer obsession is not the reality.
The reality might be unveiled through questions like these:
– What does customer obsession look like in Bakkal’s everyday practices?
– How much of his habits and ‘management orthodoxies’ would he be willing to change to transform the customer experience in a meaningful way?
– Can he speak up and stand against anything that contradicts customer obsession value?
– How does Bakkal develop his skills and competencies to understand customers better?
– Does he react to apparent customer needs or proactively discover unarticulated customer needs?
Answering these questions is not as easy as putting up a sign. Still, it is THE test only a real customer obsessive culture can pass with flying colors.
Transformation Day 3: A Bakkal’s Customer-Driven Approach
At the end of the day, a Bakkal seems only like a store where we get the goods and look for fair prices. Most of the time, everything seems to be about his product mix’s quantity and quality, and competitive pricing. Pricing, product mix, and product features are essential for sure. Still, it refers to only a fraction of the exchange that happens in the customer’s eye.
When people walk into a Bakkal and buy some groceries, they buy more than what the Bakkal sells. People buy those for a good home-cooked meal, an excellent breakfast, or for a clean house. These items are more than what is in Bakkal’s stocks. If you treat them as sheer numbers, you will miss the actual exchange in the customer’s eyes: they turn those products into new meanings and experiences. Talking about why your offer is better is not long-lasting. Creating a story that tells what the positive change it will create in your customers’ life and how it will make everyone better off is the real competitive advantage.
Whether you call it customer-centricity, customer-driven approach, or customer obsession, the question that we should we (and a Bakkal in this case) have to answer is this:
When we talk about being customer-centric, do we mean our customers are important because we want to make more money, or do we want to be important for our customers because we aspire to make their lives better?
(2) Drucker, Peter F. Management: Tasks, Responsibilities, Practices. New York: Harper & Row, 1974.
(3) Levin, G. (2014). Changing the culture to a customer-centric organization. Paper presented at PMI® Global Congress 2014 — North America, Phoenix, AZ. Newtown Square, PA: Project Management Institute.