Hello campers, and welcome to this week’s issue of Curious Behaviour.
In case you missed issues one and two, I’ve recently written about the ‘Say-Do’ gap in sustainability, and also explored whether confirmation bias might be a bigger threat than screen time.
This week we explore why notions of ‘customer-centricity’ actually do more harm than good, and how to have more impact if you’re advocating for the customer inside a business.
But first, a round-up of the most interesting things I read this week.
:: Some tasty morsels ::
This was a fascinating article on the possibility of using AI to understand whales’ language. What on earth would we say to them?? It reminded me of the novel In Ascension by Martin MacInnes, which as well as being a great story, is partly a meditation on the wonders of the deep ocean, and the fact that the truly ancient forms of life, of which we are all descendent, are still here.
As the main character of the novel says, “Life is already alien, is already rich and strange”. Perhaps we should spend more time trying to understand the wonders on this planet rather than gazing wistfully at others?
Erik Hoel writes one of the most consistently interesting newsletters I’ve come across, and his latest, “Here lies the internet, murdered by generative AI” is a must-read. Pair with Cory Doctorow on “Enshittification”.
This article on “Why everything is becoming a game” could have been written by Adam Curtis, touching on Robert McNamara, BF Skinner, Ted Kaczynski and the difference between telic and atelic games. I initially thought it was going to be depressing read, but the conclusion contains advice that is helpful and borderline inspiring.
Tesla has an ESG rating “below all of the world’s five biggest listed tobacco companies”. So bizarre I had to read it a few times.
Lastly, this was an intelligent and enjoyable conversation between Simon Roberts and Tom Chatfield, discussing Tom’s new book “Wise Animals: How technology has made us what we are”. I’ve just finished the first chapter and I can confirm it’s the antithesis of those books-that-should-be-PDFs in the ‘Smart Thinking’ section of Waterstones. Highly recommended.
:: Why ‘customer-centricity’ does more harm than good ::
For a short period, maybe 8-10 years ago, you could look in a mirror and whisper “customer centricity” three times and a client would magically appear with a great brief and a bag of cash.
Those times are long gone.
If you’re a designer, strategist, or CX leader, and find yourself trying to advocate for customers and improve the experience, product, or proposition in some way, here are three reasons ‘customer centricity’ might be hurting your efforts, and what to do instead.
It looks naive (about realities of business)
Championing customer-centricity implies that businesses operate like straightforward machines—solve for the customer, and everything else falls into place.
But businesses are complex systems with many interdependent parts.
Positioning customer needs at the forefront ignores these underlying complexities. It also lacks a commercial pragmatism that is essential if you want to change the customer experience, proposition, or product in some way.
Businesses don’t just need to serve customer needs. They need to do it in a way customers are willing to pay for, in a way that is different and superior to the competition, and at a cost that is less than the price they charge.
There are a million different configurations of this puzzle for any single business, which is why it’s unhelpful and naive to suggest customer needs are necessarily the most important thing.
It’s vague
What does customer centricity actually mean?
Perhaps it means having a high-touch “white-glove” approach to serving our customers? Wowing customers at every touchpoint. This is a possibility of course, but generally requires funding from fat gross margins, such as those found in luxury retail or enterprise SaaS. This is completely infeasible for companies with razor thin margins like supermarkets.
Perhaps it just means a deep and nuanced understanding of our customers? Not just who they are but what their lives are like, the space our brand occupies, the meaning it has, the needs it serves or “jobs” it gets done.
This is hard to argue with, whatever category you’re in.
Just don’t call it ‘customer-centricity’.
Call it something like “having a deep and nuanced understanding of our customers”. Or something else that doesn’t need so much decoding. 🤷🏻♂️
It’s self-centred (me, me me!)
Imagine the Head of Technology turning up to a cross-functional meeting about an important initiative and saying we need a ‘tech-centric approach’?
Or operations? Or HR?
It’s not a great way to start a conversation is it?
All these functions are essential, of course, and the business would fall over without them, but as we noted above, they sit within a latticework of functions that all need to work together and reinforce each other.
The big and important decisions within a business require multiple departments working together, which is why it often takes so long to get sign-off on a new initiative.
If you need to win people over internally, a surefire way to put your influence at risk is to wax lyrical about how—by nature of being the most ‘customer-centric’—your functional needs are the most important in the room.
So what to do instead? Here are two ways to have more impact within the business and deliver more value for the customer.
Befriend the business model
The best way to get a sense of the trade-offs within the business is to understand the business model. As Lisa Baird says in her wonderful article: “the business model is the secret hiding place for all the firm’s motives and incentives.”
This is how the business creates values for customers, delivers that value operationally and captures value for the business. Understanding how the business does this provides a great filter for your ideas and customer-facing initiatives. Below is a visualisation of Ryanair’s business model. Every element works together to reinforce their low-cost positioning.
Source: How to design a winning business model, HBR 2011.
Is RyanAir customer-centric? It’s a weird question isn’t it? If customer-centricity means a high-touch white glove experience that wows customers, then no, it’s not.
But they have a crystal-clear proposition for customers, who know exactly what to expect, and they are consistently profitable because every single part of their business works together to deliver on their model.
Refundable tickets, more legroom, or flying from primary airports are all things customers will say they appreciate, but as serious suggestions they bump up against the realities of the RyanAir business model, specifically their low cost structure and no-frills proposition.
Likewise, suggesting that Primark starts an e-commerce business to compete with pure-play online retailers misses the integrated nature and conscious constraints of their business model, including high-footfall stores, the fact that basket sizes are smaller online, the huge logistics and costs in packaging, shipping and returning online sales, and many more. Instead, they’re finding the aspects of online shopping that fit with their model, by trialling click-and-collect.
If you understand the business model of your company, then it’s much easier to frame your ideas in ways that are attractive and obvious to leadership and colleagues, and also forces you to think about the complexities and trade-offs inherent in any business.
Be interested
In his outstanding (and free to download) book “The Final Rant”, the late Jack Springman makes the great point that it’s rarely the responsibility of one team or department for the end-to-end customer experience. E.g. CX teams may own customer service and the online digital experience, but rarely are they responsible for the products and services that constitute a major part of what customers actually experience. The same goes for brand teams or design teams.
Enacting meaningful customer-focused change hinges on breaking down these organisational silos.
To paraphrase personal-development guru Dale Carnegie, if you want colleagues and leaders to be interested in your ideas and initiatives, you need to start by being interested in theirs. Make an effort to find out what’s keeping other business unit leaders up at night, find the common ground, and frame your initiatives and ideas in terms they can understand and get behind.
Some of my best friends are customers…
Ultimately, I’ve seen too many talented and motivated teams fail to get sign-off for important initiatives because they failed to see the importance of framing their ideas in commercial terms aligned to the business model and business strategy.
What I’m advocating for is a commercial pragmatism that I feel is lacking in a lot of conversations around customer centricity.
After all, for any single business, there are many more unmet customer needs than there are ways to make money.
Yes, we want to make things better for the customer, but this is so we can make things better for the business. Commercial value through customer value.
Without recognising this interdependence, and the commercial constraints we are operating within, then customer-centricity becomes customer philanthropy.
As ever, I’d love to hear your thoughts.
Thanks to the smart and generous Dan Harris and Lisa Baird for offering feedback on early drafts of this piece.
If you’d like to dive deeper on this topic, here are a few places to start.
1. Matt Watkinson’s excellent book The Grid, is a great primer on the latticework of competing priorities business leaders need to navigate. I wrote a short review here.
2. Lisa Baird wrote a great article on business model innovation, that I referenced above.
3. Also already mentioned, but Jack Springman’s (FREE!) e-book is outstandingly good, especially for anyone coming from a brand, marcomms, or CX background.
Thanks for stopping by.
Michaeljon