“Customer is King” – A movement or a myth?
Published by: Pritee Verma
Before we jump into a detailed scrutiny of whether the customer is king, let’s first hear what the big-wigs of the business game tell us about their customers.
Amazon: Amazon’s CEO Jeff Bezos leaves one seat open at the conference table and states that the seat is occupied by the “the most important person in the room – the customer”.“We see our customers as invited guests to the party, and we are the hosts” ~ Jeff Bezos
Apple: “Customers don’t know what they want until you show it to them” ~ Steve Jobs
Walmart: “There is only one boss – the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” ~ Sam Walton
Microsoft: “Your most unhappy customers are your greatest source of learning” ~ Bill Gates
Procter and Gamble: “The customer is the boss” ~ A.G. Lafley
Telstra: “As a leader, I want to be an agent for the customer” ~ David Thodey
Nike: “It’s our obsession with serving the consumer that sharpens our focus and drives our growth.” ~ Mark Parker
Small Businesses: “Customer is King” ~ CEO Real People, Kenya; CEO, Total Identity, Indian & South Asia
Recently, we have witnessed all companies big or small exhorting their commitment to customers. The above scenarios are few such examples. What strikes is that although the significance of a customer was clear since the days of Peter Drucker, founder of modern management, lately there have been conscious efforts from businesses to ingratiate their customer and few have gone to the extent of metaphorically crowning the customer king.
So how it all happened? How the insignificant customer who once did not have any option but buy a black color car during the early 20th century when Ford Motor Company boasted “Any customer can have a car painted any color that he wants so long as it is black”.
That customer is now so powerful that businesses even invite him to know where to put its charitable contributions. One such example is the Pepsi Refresh Project that used crowdsourcing to invite consumers to co-create where Pepsi puts its charitable contributions
The answer is that the advent of technology tools has empowered the once insignificant customer by informing, uniting and giving him/her a plethora of buying options within the reach of a click. But the question is – to what extent?
Pragmatically, the degree of the customer’s figurative dominion very much depends on the type of the product or service and the stage of growth of the company. For example, among the established players, to name a few, Amazon, Bupa, Telstra, Hilton Worldwide, Sony, Hewlett Packard and Apple are all differently ruled by customers, but what resonates among all is their incessant customer-centric strategy. They thus rank topmost in excelling at it as per 2016 survey assessments.
Customer-centric strategy preaches to embed the customer into the heart of the organization. Customer-centric marketing is defined as ‘understanding and satisfying the needs, wants and resources of individual consumers or customers rather than those of mass markets or market segments’. A customer-centric organisation is one in which all the activities of a firm – both customer related and non-marketing functions – are aligned around customer value-adding work.
Marketing professionals and scholars argue that to become customer-centric, the dominant ‘DNA’ of the organisation may have to shift from its origins (for example engineering or technology). One such example is IBM that had started by developing innovative products and marketing those products to customers. But after Louis Gerstner (IBM chairman of the board and CEO 1993 to 2002) took the helm at IBM he transformed the way IBM continued its business by making it customer driven rather than technology driven.
Even Apple had started as a product based company but eventually adapted itself to become customer–centric. When Steve Jobs came back to lead Apple, he changed the company strategy from product-centric to customer-centric. During his second stint at Apple, the company made even more innovative products than before by developing products around customer-expressed problems and needs. General Motors, Sony, Amazon, Hewlett Packard, Hilton Worldwide, Marriott International all eventually adopted a customer-centric strategy for their long-term survival.
So we see that the rising customer power is compelling businesses to reassess their strategy, transform their core and revise their key performance indicators. Today customers demand new standards for customer service, corporate behavior and a higher commitment to purpose. Behind Southwest Airlines’ success is its philosophy that it is a customer service company and it also happens to be an airline. Even Microsoft is focusing less on things like revenue and profit. Instead, Nadella wants to focus on “leading indicators of success” such as customer love.
Such recent and unprecedented company moves well explain that the bargaining power of customers have increased significantly in the last couple of decades and businesses are trying to adapt accordingly. This has also encouraged smaller players, marketing professionals, business consultants to keep expanding on the original idea and expert commentating that has proliferated over the years, resulting in slinging of customer related adages and epithets that call to attention the increased importance of the customer. “Customer is King”, “Customer is boss”, “Customer is guest” are all marketing efforts in similar direction.
However, the pain point is when such adages are used to describe or enhance the definition of customer–centricity. This raises doubt in the minds of business professionals who then ascribe all related adages and concepts merely management jargons, used as a cover-all for all types of customer service oriented discourse, leading to a devaluation of the original intent. Hence, the perception that the idea is a myth or a movement.
When in reality the point is that the customers of today are exceedingly powerful. Businesses that are aware of this are going leaps and bounds to satisfy their customers. In this mad rush few are even crowing the customer King.
Nevertheless, what matters today is that businesses have to decide based on their industry, sector, mission and vision the impact of the increased buying power of customers. Heralding customer boss or king though raises a higher sense of service in front line staff is not the end.
True victory lies in keeping the customer at the heart of the organization and then integrating every department and activity around it.
In the coming posts we will delve deep into the rising power of the customer, the importance of delivering superior customer experience and how knowledge about customers can be leveraged to reach the desired goal i.e. increase in customer loyalty and revenue.