Here's why Customer (Techno)Centricity is for every Brand

Autumn 2015

Last week I went along to listen to Faye Ilhan (Chief Digital Officer at Dan Murphy's), Nicole McInnes, (Marketing Director ANZ at Pandora), Cameron Parker (former Head of Marketing at Black Milk Clothing) debate the pros and pros of #customercentricity at @joelrnicholson's latest #customercentricity panel show.

What emerged was three very different stories. Three very different approaches. And it raised the question is there a universal Customer Centric roadmap or is each journey unique to the organisation?

Google the phrase Customer Centricity and you'll find a myriad of definitions. Most revolve around the simple idea of Brands creating 1:1 Relationships with their customers.

The origins of Customer Centricity can be traced back to a couple of Management Consultants. The year was 1993 and the HBR article Treacy and Weirsema's "Customer intimacy and other value disciplines".

"Customer intimacy means segmenting and targeting markets precisely and then tailoring offerings to match exactly the demands of those niches. Companies that excel in customer intimacy combine detailed customer knowledge with operational flexibility so they can respond quickly to almost any need, from customizing a product to fulfilling special requests" - "Customer intimacy and other value disciplines" – HBR 1993

These ideas were later expanded upon by Treacy and Weirsema in "The discipline of market leaders: Choose your customers, narrow your focus, dominate your market."

The basic premise behind Treacy and Weirsema's ground breaking study was very simple. Business is about customers, products, process. Chase market leadership in all three simultaneously and you'll probably go broke trying. But achieve the industry benchmark across two and excel at the third and you'll become the market leader.

Essentially you had a choice. Narrow your focus on Product, Process or Customers, sink your collective energies into being the best at one of these disciplines and dominate your market.

For Treacy and Weirsema customer intimacy, or what we describe today as customer centricity, was all about focusing your collective organisational energies on the customer.

Intimacy is of course a better word to describe the methodology than "Centricity" and if you take the time to read these works in detail you will find all of your questions about the value of customer centricity answered in very simple terms. For example what is the metric for measuring the effectiveness of Customer Centricity? Answer: Customer Lifetime Value. For what else would the metric be when the organization focuses on building a long-term customer relationship? The sum of the relationship is counted in years of transactions not a one off win fall.

Thinking in terms of Customer Intimacy makes things easier to comprehend the strategy but centricity is a useful word for describing the technology tool set that has emerged over the past 25 years for those seeking to achieve the industry benchmark in Customer Intimacy.

Technology like CRM, Predictive Analytics, Business Intelligence, Data Warehousing, Big Data, Single View of the Customer, customer segmentation and social media analytics are not your competitive edge. They are the industry benchmark. They are the baseline for doing business in a networked economy. They are the tools that make us all customer techno-centric.

This delineation also makes it much easier to comprehend the chasm between the market leaders in Customer Intimacy and those seeking to achieve the Customer Techno-centric benchmark.

The premise that drives Customer Techno-centricity is the simple idea that to be intimate with your customers you need to know more about their collective and individual needs and aspirations than they do. Think of it as machine augmented B2C Key Account Management for the masses.

In contrast those who thrive on Customer Intimacy understand intuitively it is the customer who is the smartest person in the room. The challenge is to excite the customer into action, help them solve their own problems in their own way. The market leaders in Customer Intimacy are embraced by their customers, not because they are more efficient or better, but simply because they excite the customer to act... to embrace change... to create something new and exciting... something unique... something special that can be shared with others.

This then is how Cameron Parker can claim Black Milk "to be born "purely", without a cent spent on advertising". The same principle applies to Facebook, Pinterest and Instagram. Each in their own way encouraged their customers to define and personalise their experience with the product and then encouraged them to share the experience with others.

And this is why Customer Intimacy is not for every brand. After all how many Brands are out there telling the world it is our customers, rather than our products or our services, which make us special? How many are willing to profit from the reflected glory?

Customer (Techno)Centricity on the other hand is for every Brand. It is the industry benchmark. It simply allows you to focus on what you do best. The challenge is to recognise it is now just a cost of doing business rather than a game changer that will disrupt the marketplace.