The reality of today's customer service leaves no doubt that customer centricity must be the driving principle behind any successful customer service strategy.
Elizabeth Herrell, Simon Yates, and Margaret Ryan write in: 'Next Generation Contact Centres: Solutions to Keep Pace with your Customers' (Forrester Research, 11 November 2009) that “customers are more mobile and informed today and expect companies to support them with quality service over the channels of their choice”.
The Internet and the mobile revolution have transformed the way people interact with businesses, providers, government, and with each other.
Clued up
The demand for customer centricity is the result of more informed customers. It is the result of having made information available to people in real-time through a variety of channels and of having given them the ability to get answers to questions, solve problems and conduct transactions on their own terms.
The demand for customer centricity pervades all industries and puts pressure on both large and small businesses.
The expectation for customer centricity sets the bar for customer satisfaction. When expectations meet reality and the match is less than perfect, customers walk away, and in many cases, they don't come back. They may not tell their friends and family about their experience - some will, in very explicit terms - but they will certainly stay away for good.
Kimberly Hedley, John White, Cormac Petit and Sunny Banerjea, from the IBM Institute for Business Value, address this issue in 'The Paradox of Banking 2015'. Their research uncovers important changes in customer behavior that spark the new demand for customer centricity. First, businesses must learn to deal with customer diversity. Traditionally, the term 'customer' has referred to savvy urbanites in developed countries. Not too long ago, people from other parts of the world did not have the purchasing power or the choices to assume that they too could decide where to spend their money.
For much of the last century, for instance, millions of people in Eastern Europe never thought of themselves as consumers with purchasing power.
In general, the pre-globalisation world forced the populations of most developing countries to consume what was available to them locally. In many cases this involved one or two brands for most products.
People had the choice of buying what the company provided, or not.
Dave Paulding is Interactive Intelligence's regional sales manager for UK and Africa.
Under such circumstances, the term 'customer service' was an alien notion. And how could it not be when there was no need to keep customers happy? In many countries, for example, there was only one provider of canned vegetables, usually a state-owned company staffed effectively with civil servants who were not worried about their company succumbing to competition or falling behind due to dissatisfied customers. People had the choice of buying what the company provided, or not. The same applied to banks, airlines, hotels, etc.
In other situations, poverty prevented people from considering themselves as consumers. When a person's purchasing power is near zero, there is no way that person can think of him or herself as a customer of anything.
Customer evolution
But people learn quickly and they get used to progress in no time.
Changes in the political landscape and the overwhelming tide of globalisation that's still sweeping the planet have changed the economic landscape. Millions of people are moving out of poverty in newly emerging powers and they're steadily entering the middle class. As a result, a new breed of discerning consumers, who are well aware of their newly acquired purchasing power, is starting to emerge.
Along with this new wave of consumers from emerging markets, customers in developed markets have also become more aware and more value-oriented. As globalisation connects businesses and customers across geographies, the result is a customer population composed of people with different criteria influencing their purchasing decisions, with different cultural backgrounds and different degrees of purchasing power.
The one thing they all have in common is the notion that they have the power to decide where to spend their money.
Hedley et al point out that brand loyalty is increasingly a trait of older customers, and that younger generations do not mind switching brands whenever doing so translates in more value and better service.
Their research also points to an inverted bell curve in which customer demand grows at the two ends: mass-produced (cheap) products on the one hand, and high-end products on the other. Then, as demand concentrates on the two ends of the product spectrum, the differentiating factor resides increasingly in the demand for customer centricity.
The challenge for companies, then, is how to adopt customer centricity; how deep they should dive to transform their processes and their culture to become truly customer-centric organisations.
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