The most fundamental challenge about customer centricity is not knowing what customers want and need. It is the basis for all businesses (creating products and services customers need and selling these to them at a profit) so all companies have some insight into this. Arguably, all companies can know more and use what they know better to deliver better customer value, but that is not the main reason why customer-centricity fails.
Iconic multinationals were created to be customer-centric – even if they all will agree they can become a lot better at it. At the very core, they satisfy needs, for better or worse.
The most fundamental challenge lies in delivering what customers want and need to them. This is as much about knowing as it is about designing the company around it.
The human-centred design is the word most often used today. But it entails a vast business concept. In fact, it means the business model itself, in how it is conceived and constructed, needs to be designed around the satisfaction of consumer needs. Data and actual observations about consumers are the fuel that drives it.
But delivery lies within the strategies, vision, people, systems, structures, roles, skills, processes, marketing, value propositions, data-flows, process-flows, marketing technology, input and output costs, channels, digital properties, bricks & mortar, organisation, governance and curation. Within their own right, they are all important.
Yet, in most companies, these entities are silo’s in their own right, not complimentary capabilities designed to deliver one simple output: what consumers want and need. It is like using ten architects to design a house: it will always look like a mongrel. Maybe loveable but hardly unique and efficient.
Business design starts from a central idea that is based upon a customer-of-one.
The purpose of business design is to organise the operations of a company to deliver the value proposition to its customers fast, well, efficiently and profitably. Whilst we can argue there are corporate roles within a company with an important purpose (i.e. financing the business, looking for merger opportunities, managing investors), almost all of what a business does, is how it delivers the customer value proposition.
We can even argue that redundancy and inefficiency lie in either over or under-engineering this. As I often said to marketers, “what did you do to add value to your customers today?”
The shortest line between need and customer satisfaction surely is the one with the least areas where problems can occur. If a Tesla is designed around the consumer with limited systems as it does not need that many, common sense tells us automotive brands with many systems that require integration, will be more complex and costly to produce. They will also have more areas where faults can occur. This is fact, not fiction.
This is a major advantage new digitally enabled brands have today.
So, whether it is an online brand like a florist or a bricks-and-mortar retail store, the design of the company aligns the resources of the business to deliver the desired value proposition to the consumer. And the costs translate into both higher margins and potentially lower prices.
Whilst the user journey defines the expectations of the consumer and how, when and where the consumer touches the brand, the structure aligns the operations of the business to deliver that in a seamless and error-free manner.
When I buy an item in a retail outlet, there are several layers of contact I have with the brand, all enabled by the design of the business operations. Short lines simplify operations and costs.
The retailer needs to understand its market and the demands of the particular locality of the store. That will determine what brands, products, variants (i.e. flavours, colours), packaging sizes, it stocks. It will determine the levels of stock it holds. How fast the stock turnover will happen. What marketing communications, trade and sales support are required within the store to support sales. Complexity has a way of multiplying itself as layers of costs incrementally grow – even if current research tells us simplicity in stores increases the value of purchases and reduces the costs of logistics.
The simplest solution is to unpack the value proposition of the brand and then “reconstruct” it into its component parts. Without politics and holy cows. Simple, digitally enabled brands can do this easily, i.e. Uber and AirBnB. Complex legacy businesses can only do this with huge difficulty. Therein lies the challenge of businesses and their inherent ability to compete effectively.
Complex structures require deep transformation and take long. Even with full resource commitment and executive support. Simple user-centric design starts with the customer in the middle and builds around it.
Herein, far more than insights, understanding, data, brand, skills or any other aspect of business, lies the challenge.
How do I keep the line between promise and delivery direct, fast and simple? By starting in the middle and questioning everything. Then re-thinking everything. Then gradually transforming, in order of market impact.
Yet, even today people talk about transformation as though disciplines in companies are entities in their own right. It is like budgets, these disciplines now have lives of their own, at some point devoid of any logic.
If a company is not transformed around customer needs, it builds a house of cards – it may create a better mousetrap, but it will still not solve any real problem or be able to compete more effectively.
Without that, customer-centricity is a pipe-dream. Or it will result in massive wastage, without a concomitant increase in value.