Customer
Centricity: Is it more than IT –
a Marketing perspective.
It is seldom
these days that one reads an article in the popular press or magazines without
coming across axiomatic English, usually of the double barrelled variety, which
is meant to encapsulate a specific concept for a world in a hurry. Examples of
what is a veritable plethora of these often idiosyncratic descriptions are
‘digital convergence’, ‘object oriented’ ‘wireless web’, ‘cyber
space ‘ and so on, all of which make perfect sense to the mind versed in the
ways of Information Technology (IT) and none at all to much of the rest of
humanity.
The IT monopoly on these descriptors appears to extend to well outside its typical boundaries as a visit to Google; a ‘search engine’, demonstrates. When typing in the words ‘client centric’, Google produces a list of references predominated by entries for CRM (customer relationship management). CRM is a computer software system that handles data resulting from the interaction of companies with their customers and which claims to improve the relationship involved, to mutual benefit.
CRM does indeed capture and analyse
data about customers, but the degree to which it can be classified as being
essential for achieving customer centricity, where this is defined as a broad
understanding and response to customer needs, is debateable. These software
systems, based on the largely quantitative and subjective company data they
collect and analyse, are of necessity focussed on the needs of the seller,
rather that the buyer. They endeavour to point the way towards the ‘push’
side of the marketing equation; the most effective way to sell, rather than the
‘pull’ side; based additionally on qualitative and extended data about the
discreet and evolving needs of the customer. As so often happens in this
‘digital’ age, the usage of the more apt, in this case, marketing biased
interpretation of the words ‘customer centric’ appears to have given way to
a less germane IT one.
The ‘holy grail’ of customer
centricity, keeping a company responsive to the needs of their customers and
offering them value for money, can involve broad, deep and continuous research
about them and the markets they make up. Initially establishing the basic
context in which a company operates may be necessary through defining its
political, economic, social and technological environment. Equally,
understanding the competitive climate as determined by sellers, buyers,
potential entrants and substitutes, as well as the factors which are critical to
success, is often an essential precursor to informed and effective market
analysis and strategy. This information and that coming from ongoing market
research, together with its own activities, can combine to facilitate a
company’s understanding of its market and customers’ changing needs;
assisting it to efficiently satisfy current and more accurately anticipate
future ones: to become therefore, truly customer centric.
Many
organisations bypass broader market contextual analysis, preferring instead to
rely on their own, often CRM sourced data, market surveys or published,
generally available, market information, in order to monitor customer needs. Not
or never undertaking contextual research, reflective of the’ bigger picture’
may however prove ill advised for many of them.
Life in the UK, Europe and many post-modern industrial societies is undergoing significant changes and challenges with the dawn of the 21st century. Specifically, with regard to the UK, there are a number of actual and emerging changes taking place which present fundamental challenges to British business as it endeavours to sustain its global economic standing in a competitive world.
These challenges include:
In the past societies like the UK
managed to sustain wealth by using industrial resources and technology as well
as military might. Customer
centricity was hardly a consideration for monopolies and soldiers. Those days
are well on the wane with many previously weak economies matching and often
significantly exceeding the capabilities and resources of their former colonial
occupiers. An age of large,
powerful, economic juggernauts like China is emerging and they are quickly
becoming a force in many of the global trading sectors traditionally dominated
by western nations. Change however can bring opportunities as well as threats.
As well as being a potential threat,
emerging trading powers can represent an opportunity and a solution for the
internal challenges faced by countries like the UK. A typical example is the
sourcing of operations in them to take advantage of low costs, which then can be
passed on to customers in the form of competitive pricing. This emergent ability
of companies to relocate functions overseas, referred to as ‘off-shoring’
has to a large degree been facilitated by technology, and constitutes an example
of its central role in many business activities including the whole process of
globalisation.
In the pursuit of quick gains
however, overly focussing on enabling technology; notwithstanding its pivotal
role, to the detriment of considering key contextual research and information,
can result in both opportunities and threats being ignored. Some of the threats
can cast serious doubt on the wisdom of these functional migrations, especially
where long-term commitments are involved. These include:
Anything which diminishes the quality
of a company’s products and services and the customers perception of them, in
other words a company’s brand, can have catastrophic business consequences.
Global change can and does impact customers, directly and often with
immediate effect and falls therefore within an extended remit of any marketing
programme aimed at protecting a company from the impact of too narrow a focus on
technology and economic gain.
If having the
best IT and comprehensive market information was all that was needed in order to
be customer centric there would be many more satisfied customers and less
company failures than is in fact generally the case. Success with customers
comes from the application of technology and knowledge to inform the practices
and processes within an organisation so that its value chain accurately reflects
and adjusts to ongoing market needs. This can affect not only the quality of
products and services but also, for example, the approach to addressing the
softer issues which influence customers perceptions of a company’s performance
such as its record as a corporate citizen and equitable operator.
There is no question about the
crucial role that IT plays in a most aspects of modern business and that the
marketing function in particular relies heavily on it.
Equally, not having good market and customer awareness could render
effective customer centricity difficult to achieve for many organisations.
Despite having access to these
powerful tools, all of the marketing and IT in the world cannot replace a
customer centred ethos which permeates every aspect of a company’s business.
This is the basic operational cornerstone every company needs in order to keep
customers satisfied and in the process also realise benefits for its remaining
stakeholders. Paradoxically, answering the ‘phone in a timely manner and being
understood, as well as being polite, may be all that separates many businesses
from achieving effective customer centricity
The reality surely is that the successful marriage of IT and marketing, rather than a disproportionate dependence on either of them, is likely to be the most productive approach to facilitating an effective business strategy, which has the customer at its core. That said, anything which focuses on all potential customers rather than only those already in a CRM database; which like marketing provides information as opposed to just the processing of it; must surely, at a minimum, be a first among equals.
(First publication
in the CIMTech Newsletter July 2004)