Once upon a time, before consumer markets became dominated by large corporations and big box stores, customer centricity was a relatively common practice. Small manufacturers and shop keepers could not do it any other way to attract and retain the relatively small number of customers who were financially capable to support their businesses. The real, personal relationship often existed between people who worked for the companies and people who consumed the products and services these companies provided.
As population and affluence grew exponentially, companies followed by scaling their growth to satisfy the needs of their markets. They largely succeeded in building efficient organizations to manage their growth, but at the expense of the “personal” relationships they once had with their customers. During this process of scaling “George” and “Gladys” were replaced by customer persona, segments, demographics, etc.
I am not waxing nostalgically over the “good, old days” and have full appreciation of the progress that made our lives a lot better in many ways. However, as a customer I do miss the experiences associated with a personal relationship.
Once or twice a week I frequent a funky coffee shop (French Hotel), in the heart of Berkeley’s Gourmet Ghetto. The other day I was standing in line to order my cappuccino, ready to give a barista my order. Before I had a chance to open my mouth, the barista gave me a cup made up exactly they way I usually order: with a smile and “hello”, and “how are you doing” to follow. This kind of experience you can only get in a place where the same 2-3 people work all the time and a transaction is very simple. Can it be re-created in a place like Starbucks? Best Buy? Comcast?
The technologies capable to create such a transformation have been available for over two decades. The enterprise culture, designed for unlimited scaling, did not find the motivation to leverage technology for re-focusing itself on its customers. It has used these technologies to reduce the costs of doing business instead. Organizational silos bring efficiencies to operations, but they also create a broken view of the customer, as each silo has it’s own perspective on how a customer looks: “innovator” or “slow payer” or “support hog”. To make it worse each department thinks that their perspective is the complete and accurate picture.
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CRM has promised to create a complete, holistic view of the customer, but failed to break organizational silos and to deliver better customer experience. Now, different technologies make similar promises again. Should we take these promises seriously this time? Let’s look at mega trends to help answer this question.
- The trend in global population growth is not slowing down. Therefore we cannot expect a stall in the market size growth to moderate the enterprises’ appetite for scaling.
- The affluence of consumers, appears to have moderated in the developed countries, yet continues explosive growth in the high population developing economies of the world. Given the global reach of modern enterprise, the higher demands for better customer experience from a less important customer base, is not likely to force corporate management to review their fundamental propensity for use of technology as a primary cost cutting tool.
- During the last decade we witnessed the shift in balance of influence on consumer behavior from brands (enterprise) to their customers. That shift was powered by the proliferation of social media technologies and its adoption by millions of consumers in the developed markets. There is a strong evidence that this mega trend is growing in the developing markets as well.
The social consumers influence in China is over 50 points below that of the US and Britain. However, if it continues to grow, the enterprise would be forced to review it’s historic strategy and start to compete on quality of customer experience instead of the traditional 4 pillars of marketing.