Our focus is not on profitability. Our focus is on the consumer. If we can find a way to give them what they want better than anybody else, what can stop us?
—James Press, Vice Chairman and Co-President, Chrysler
Nowadays, most business leaders echo with James, and are heading to reform their companies from product-centric to customer-centric, or customer-driven. Ask any executive in service or marketing department, you will realize that tremendous resources are being spent on all kinds of satisfaction surveys, customer interviews, focus groups, etc., in order to understand better what customers want, and convert the insights to drive product innovation and experience design. How’s the result? You create more similar products and experiences, jet up manufacturing and servicing costs, but not necessarily enhance satisfaction, sales and loyalty. You did listen to customers and act on the insights. How would it be possible for customer-centricity to go wrong?
Apple: “We Do No Market Research.” iPod has significantly fewer features and functions when comparing with most average-MP3 in similar price-range. People love (and buy) iPod because it is ‘cool’, ‘classy’ and ‘simple’. But this was the answer given after. The same group of people who love iPod would most likely answer oppositely if they were surveyed before its launch: “we want more advanced features and functions”——especially for a premium-price MP3——a dramatic less denotes ‘simplistic’ but not ‘simplicity’. Though Steve Jobs does no market research, it turns out the iPod is to music players what Kleenex is to tissue, Starbucks is to coffee or Xerox is to copiers.
Southwest: “Flout All Rules Of Airlines Customer Service.” If Southwest Airlines asked customers what they need and act on the insights, there would be a long list of services to add. Though Southwest provides fewer services than competitors and flouts all rules of airlines customer service, e.g. no reserved seating, no upgrades, no meals, no video, no…etc, the airline has enjoyed the best rating on ACSI (American Customer Satisfaction Index) in her industry, far ahead of competitors, and reports continuous profitability for over 3-decade, which is an astonishing achievement of Herb Kelleher when comparing with other American counterparts.
Amazon: “The Best Service Is No Service.” Customers want to be served, served promptly via their preferred touch-points. At Amazon, CPO (Contact Per Order) is the most important metric to measure the effectiveness of customer satisfaction: by creating customer managed service and conducting root cause contact analysis, to minimize and eliminate the unneeded and unwanted contacts. Amazon peaches internally, “The best service is no service.” You can hardly get a CSR on the phone or online chatting, you are rarely serviced by anyone throughout the buying process. Yet, Amazon has ranked No.1 on ACSI for many years, and aligns with Jeff Bezos’ vision ‘Be earth most customer-centric company.’
Don’t get me wrong. Apple, Southwest and Amazon are customer-centric; they do ‘listen’ to their customers and act on the insights. But they give customers what they want, selectively, not all their wants: Apple makes a cool music player but with fewer features; Southwest flies cheaper but with fewer services; Amazon renders more convenience but with no service. Apple, Southwest and Amazon are among those successful brands who move beyond customer-centricity to the next frontier——establishing a (or rediscovering the) beautiful linkage between ‘Who They Are’ and ‘What Customers Want’, so that they can selectively give customers what they want better than anybody else——by delivering a branded experience.
From UN-SATISFIED to HAPPY to LOYAL
While listening to the voice of customer, great (effective) companies never forget who they are——their DNA, their unique brand values, to differentiate from competition and make customers buy, and become loyal to them——by deciding what to focus on and what to let go. Apple’s DNA has always been trying to democratize technology and as a symbol of innovation; Southwest’s brand values are low-price, on-time and fun; and Amazon’s are about convenience, selection and trust. They are not everything to everyone. Instead, they focus their resources on a few things that are critical to target customers, and can reflect their differentiated brand values. Customer-centricity makes your customers happy, but it is the branded experience which makes them loyal. Follow the threads to see WHY (the benefits) you should go beyond customer-centricity to creating your own branded experience.
Differentiation-Satisfaction-NPS Chart
The above diagram shows nine boxes representing different levels (high/mid/low) of customer satisfaction and brand differentiation, and the corresponding NPS (Net Promoter Score). The highest NPS appears in the top right corner, which also represents the highest levels of both customer satisfaction and brand differentiation. (For simplicity sake, only NPS scores are shown here. Comparable results are found at the scores of ‘Willingness to consume/buy again’ and ‘Willingness to refer’ when correlates with each of the corresponding nine boxes) The data was derived from 3,865 valid responses of the Global Starbucks In-store Experience Survey conducted by GCCRM and CustomerThink. In fact, similar findings are concluded from other research studies in automotive and financial services industries covering a total of 44 customer segments with over 8,000 respondents.
The Evolution——from Unsatisfied to Satisfied. When you move from the stage of product-centric to customer centric, you start to listen to your customers by giving them what they want, you may succeed in raising their satisfaction from low (or even unsatisfied) to satisfied, you see a tremendous increment on the NPS (e.g. from -78% to +47%, a +125% net gain in NPS). Most companies are currently on this evolution path.
Customer-Centricity——from Satisfied to Happy. You want to continuously harvest from customer-centricity, you invest more resources to drive your customers from satisfied to happy by achieving the highest level of satisfaction (e.g. +61% NPS). This looks good in the satisfaction report. In fact, many Good (efficient) companies are at this stage, but they will soon begin to suffer from diminishing returns, increasing servicing costs and me-too deliverables.
Branded Experience——from Happy to Loyal. To sustain winning, there is a more sensible alternative: shifting customers from happy to loyal by attaining both high levels of satisfaction and brand differentiation (e.g. +93% NPS). Brand differentiation, not just customer satisfaction plays a key part in the process. Great (effective) companies turn satisfied customers into advocates——beyond customer-centricity——by delivering a branded experience.
If you can discover the beautiful linkage between Who You Are and What Customers Want, and create your own branded experience, what can stop you?
How to deliver a branded experience? Check out my another blog: To Create Advocates, You Have to Differentiate Your Organization [1].