In laymen’s terms, “Customer Centricity” is a relationship paradigm that raises the need for companies to combine both the vision of the product and the customer in an integrated way. Within the product-centric perspective, the goal is to get the market share. But in the customer-centric vision, the goal is to maximize your loyalty by meeting and exceeding your expectations over time.
The simplest and most concise explanation I have come across thus far is this one by Don Peppers. It’s also the source of this image that clearly illustrates what it is about.
The company focused on the product pursues a mindset that the more sales they can make to the most customers, the better. Customer-focused companies, on the contrary, focus on getting customers to buy their products most of the time. That is, the companies move from an emphasis on market share to customer quota. This can be a difficult balance in many companies where departments and strategies of recruitment and loyalty do not work in a coordinated way but instead compete with each other. In fact, there are few companies that can prove they are truly customer focused from an operations perspective, not just from marketing. And this leads us to the necessary evolution of moving from CRM to CEM.
The CRM is a strategy that allows us to get to know our customers through various ways of contact to customize the relationship to the maximum and thus generate business opportunities. The CEM (Customer Experience Management) goes a step further and aims to observe and measure the quality of this relationship considering the experiences and emotions (experiences) that are generated at each of the contact points. This allows the company to ensure that the link generated between the brand and the customer is durable, which results in an increase in maintaining brands and customers in the long term.
C. Meyer y A. Schwager – Harvard Busines Review
While the CRM is based on capitalizing on what a company knows about its customers, the CEM is based on what the customers feel. Its purpose is to create value based on what customers think of the company. It also strives to navigate how to manage customer expectations to the point of finding the perfect balance – not too high to avoid disappointment, not too low to avoid going unnoticed. The CEM works on two levels: that of expectations, and that of touch points or “moments of truth”, and classifies clients based on their relationship stages.
When moved to the digital environment, we will see that there are different levels of relationships that are the result of the experiences that the brand provides to the customer. As the following figure illustrates, a client who is in the stage of ‘communication’, will hardly be an ‘evangelist’ of the brand, unless the company has previously thought to offer some experiences that allow a “level up”. In this case, it is going through the conversation (e.g. through a social CRM), through ‘collaboration’ (e.g. with a brand community), and thorough ‘co-creation’ (e.g. with a wiki about the new product that the company will launch to the market).
Clients may forget messages, ads, offers, discounts, but they will never forget what/how we have made them feel. That is why the emotional component is so important in customer management. If we just put the emphasis on the relationship, we will not be guaranteed that it is positive. We will be guaranteeing that it exists (which is already a commendable task), but we can easily lose them if a competitor makes them feel better than we can. Companies like Apple, Amazon, Zappos, Starwood, Starbucks, Virgin, or Harley-Davidson generate good experiences to their customers. And that is what truly makes them feel really special.
Maya Angelou said — ‘I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.’
“We are not in the coffee business serving people, but in the people business serving coffee”, Howard Schultz, Founder, and CEO of Starbucks sums up this strategy very well. A strategy focused on managing the customer experience. Schultz also once said, “If we want our clients to be our best lawyers outside the company, we must start by always being their best lawyers in the company”. And that is the ultimate goal – to generate a unique and unforgettable customer experience. But to do so, it is necessary to involve the entire company through a cultural change that affects all managers, all employees, and all departments. Only by implementing these changes can we create a differentiated and recognizable proposal in the market.