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Saturday, April 30, 2011

Customer Centricism, Arranged Marriages And Shanghai


In a recent webinar, Ranjay Gulati spoke at length about customer centricity and how important it is in the post-financial crisis world. While at different points in history there were different factors that were motivators for customers and most of them eventually did become what Prof. Gulati calls “Hygiene Factors”; what is important to understand is the fact that the financial crisis has dismantled the aura surrounding some of the fat cats of the corporate world in an unprecedented way.

Being, or pretending being customer centric used to be a sureshot way for an organization to win customer confidence, and, subsequently, survive. Customer centricism was the key differentiator, the buzzword, the mantra for running a successful venture. Of course there were factors like innovation, price, or monopoly etc that could ensure that a firm can survive, “customer-driven”, or “customer-focused” or any other fancy term was the clincher. This was the catchphrase that most firms, in a desperate attempt to attract customers used to cling onto hoping that the customer will listen. But, mostly, that was where it ended. CRM was limited to spending just enough amounts of resources that would prevent the customer from suing the firm, especially post-delivery. But, as more and more firms are realizing the hard way, those fancy terms have moved from being Motivators, to being Hygiene Factors. Being customer-centric is not how you succeed in business anymore. It is how you survive in business.

Businesses can no longer hope that the customers will keep coming to them as long as they maintained their edge in the business, which could be a smart product, a strategic location, great prices or even lack of competitors. The only reason why a customer now would come to you is because you care. Because your entire business, your products, services, strategies are designed to ensure that the customer not just feels, but IS at the center.

In the much-ridiculed, and to some extent rightly so system of arranged marriages in India, once a daughter is married, her parents and their families do not just wash their hands off her, but spend most of their lifetimes strengthening ties with the daughter’s husband’s family. There are greetings, gifts, favours and all kind of support that is directed to the groom’s family for generations. The groom’s family receives the pride of place in every social gathering at the girl’s place and has a lot of weight attached to everything they say. This is not done just to ensure that the daughter is treated properly in the groom’s household, but also to extend contacts, resources, networks and, perhaps most importantly, to have a good name in the society which might help in further alliances. The relevance of this reference is left to the reader’s discretion.
If a firm is a stool, Product, Value, and Relationship are like its three legs. You can’t have one shorter or longer than the other. Relationships and Value to customer have to be two-thirds of your organizational structure, the third, of course being the product or service that you offer.

Customer centricism is not just the cute receptionist anymore. It is the big guy sitting in the corner office. Moreover, the criticality and urgency of this realization is not something that should be confined to the board room or should be drilled into the heads of the customer-facing employees during induction. It has to flow in the lifeblood of the organization. It has to be something that every member of the organization swears by. It cannot just be a part of the mission statement. It has to be engraved in the psyche of a firm. It is not enough to just move from the four P’s to the four C’s. You have to align the firm so as to drive real value to the customer, as defined by the customer.

In Shanghai, I used to frequently visit a small restaurant called Hannah’s partly because of the ambience, food and the crowd, but mainly because of the way Hannah – a lady in her fifties – used to just light up seeing me. She would come over, have a small chit-chat, ask what I would like to eat, and then start preparing it. I once, out of sheer habit, took a can of coke from the refrigerator of her restaurant, and walked out forgetting to pay for it. Later, when I realized it, I came back embarrassed to her joint and asked her to take money for the coke. She said it was perfectly fine and I could have the coke free of cost as a gift from her. I went to her restaurant till the last day I was in Shanghai. Again, the relevance of this reference is left to the reader’s discretion.

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