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EVALUATING A CUSTOMER-CENTRIC APPROACH

Professor PhD Luigi-Nicolae DUMITRESCU


Lucian Blaga University of Sibiu

Abstract:
Customer focus is, at best, only one element of the relationship between a
company and its customers. At worst it is a board-room buzzworld, witch
makes every board member feel a little more secure. Not unlike the phrase
“working towards equal opportunities”, it is showing an awareness of a need
but is not addressing the issues. Customer focus must lead to something
meaningful, will probably require sacrifices and is just one of the steps
necessary to become truly customer-centric. A customer focus puts your
customers high on your list of priorities. When you put your customers into
the heart of your business, make customers part of the culture, then you to
become customer-centric.

Keywords: customer focus, service differentiation

Generic overview consuming and can cost the company


One department within an an awful lot more than merely the
organisation cannot function in isolation. financial costs.
You cannot departmentalise a It is important that having
customer-centric approach. It must embarked upon the journey, which is
emanate from the very heart of the customer service, organisations look
organisation. All departments need to inward and establish all those elements
work in harmony, if not complete that are positive. If the positive elements
synchronicity in all communications with within current business process only
customers. Somebody high up in the require an almost imperceptible change
organisation has to take complete of emphasis, then look to utilising them
control of the total customer experience within your customer-centric approach.
for a true customer-centric approach to If certain departments are more
work. This person should assume the customer-orientated – either during
role of communicator, champion and customer facing situations or in handling
relationship developer. Not all customer complaints – then build on
organisations are ready to this. Some and utilise that expertise. In some
companies rely on individuals “who are organisations, ownership of the
good with customers” to assume this customer can be clouded issue. Some
role. It has limited effect. sales people would like to say they own
To evaluate an organisation’s the customer, some accounts people
readiness to become customer-centric would also say that they service and
is simple. To become customer-centric own the customer; for a customer-
is a far more arduous task. Identifying centric approach to be effective, the
the shortfalls is relatively easy; reality is that ownership of the customer
overcoming them is far more difficult. If should not be the domain of any one
you need to undertake cultural change department and all departments should
in order to adhere to the readiness shift in unison.
checklist then the task ahead takes on The customer has to be central to
magnificent proportions. Educating an most of the decisions made by the
entire workforce to change in a way that company. The payback will be high, but
is generally customer-centric is time- the cost can be high also. Will you ever
be in a position to credit yourself as a the product to be unique. The customer-
customer-centric organisation? The driven organisation will look at its
answer to that is doubtful. The reality is, customers as part of the overall
it becomes a way of doing business business process. A true customer-
rather than a goal that you achieve. driven organisation will want to go that
extra mile (a cliché, but a valid one) to
Are you price-, product- or please the customer and to ensure that
customer-driven? they enjoy the experience of being a
Most commercial relationships can customer of that organisation [3. Sandra
be broken down to three distinct Vandermerwe, p. 121].
categories: price-driven, product-driven It is well documented that the top
or customer-driven [1. Philip Kotler, p. 10 per cent of your customers can
183]. Price-driven organisations, not represent as much as 120 per cent of
surprisingly, complete or price, look at your profit. Therefore, it becomes vital
price as a differentiator and are forever to be able to be able to see who your
concentrating on margins. That does valuable customers are. It is an
not mean to say that organisations in on-going dilemma whether you should
the other categories do not look at deal with the 10 per cent in a way that is
margins but it is an ethos within an different from how you deal with the
organisation that makes everything remainder of your customers. Obviously
surround the product price. This will you want to retain the top 10 per cent
require those organisations to cross out because of the value that they add to
the value of their customers. They find your organisation, but you will not
themselves in a precarious position in always necessarily want to lose any of
terms of customer service because the other 90 per cent because of
when somebody else comes along with economy of scale. It is important to
a lower price the customer feels justified evaluate exactly how much you are
in switching because no loyalty has prepared to invest for the retention of
been built. the 90 per cent of the customers in
Product-driven organisations relationship to how much you are willing
differentiate on their particular products; to invest in the top 10 percent.
sometimes this can be an ideal solution How you communicate with your
especially if the product is unique. most valuable customers is a dilemma.
However, unique products can be either If you treat them in a favourable way,
franchised – as in the case of Wimpy – offer them inducements that are not
or copied, creating unexpected offered to the rest of your client base,
competition. Product-driven you risk being “found out”. If you are
organisations rely upon the product to “found out” by some or many of the rest
keep the customer. If the product is of your customers they may feel
particularly good, efficient, cost-effective alienated and defect; your economy of
and economic to run, then customers scale will diminish and therefore the true
will acknowledge these facts and value of your top 10 per cent will
remain loyal. However, sometimes diminish with it. Communication is an
competitors can mimic goods and important tool but it can also be a
customers can be tempted to buy your minefield.
competitor’s stock. A customer-driven organisation will
Customer-driven organisations do have date supporting its customer
not necessarily need to compete on relationship. This data will be analysed,
price or product – although it is either by transaction, by value, by
important that the price and product are location or geography. The data will
of an acceptable standard. It is not an have been collected, maybe by the
imperative always to be cheaper or for sales or the marketing departments, but

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it will be shared. Shared data is customer. The necessity then is to
valuable data. Data that is not used is of become, if you are not already,
no use. Data that is out of data is also of customer-driven, which will involve
no value, so the information that is held looking at the entire business to enable
on the customer must be shared you to evaluate how easy or hard the
throughout the organisation and must task is going to be to make a full
be able to be updated from various transition. If the entire culture needs to
sources. change then be prepared to implement
Loyalty marketing is a way of over an extended timeframe to allow for
marketing sure that the customers who full adoption. Training and
are repeating business on a regulat communication are all – important with
basis benefit from their loyalty – thus regards to your existing staff. Often a
engendering further loyalty [1. Philip customer-centric approach can be
Kotler, p. 97]. Collecting data and driven from within an organisation, by its
member-crunching are vital for the staff. The staff must be truly
process to be successful. The explosion empowered, though.
of loyalty cards in the retail grocery Look at your internal procedures:
business from the early 1990s was Is your organisation employee-centric?
nothing short of phenomenal. Do you take account all of those people
Differentiation was quick to diminish. around you and their individual
Each of the big five supermarket chains problems, concerns, fears or worries? If
were employing the same tactics. Two so, you are will on the way to being able
things occurred: massive data collection to commute that to your customer
on a scale unknown before about the service offering. If, however, your
customer, and none of the management approach has been
supermarkets maximising the collected somewhat different, then set yourself a
data to its full extent. Therefore, timetable and look at how to change
“customer loyalty” became a total processes; get feedback from those
misnomer. Shoppers (customers) hat people who are on the front line; be
“loyalty cards” from all of these prepared to empower staff and trust
companies. The lessons learnt took a them. Promote buy-in from the staff
veritable age to filter through. Loyalty through a process of training,
marketing needed to “become of age” communication and top-down
and only customer-driven organisations involvement from senior management.
are able to employ today’s sophisticated Access, update and utilise all the
loyalty marketing processes. data that you have on the customers.
Assess your existing customers,
Transition towards customer evaluate and specify what your
focus customer values are. Ascertain what
Adopting the points set out here your customers’ lifetime values – how
will set you on your way towards much money a customer will spend over
achieving a customer-centric approach. the lifetime of the relationship – are, and
However, order needs to be maintained. how valuable each customer segment is
The primary process that has to be no the organisation [3. Sandra
undertaken is management buy-in. Vandermerwe, p. 68]. Estimate the
Have the board appoint someone as overage existing lifetime of the
customer director or at least appoint relationship with your customers, how
someone to be responsible for the total much loyalty you are achieving now and
customer experience (TCE). set yourself targets for the future. The
It will be necessary to establish to essence of transition to customer focus
which of the three “driven” organisations is to ecompass all departments within
you belong – product, price or the organisation, whether customer

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facing or not. If you can achieve As you look around the
maximum amount of buy-in from all commercial world today you will see
departments, the transition will be many forms of differentiation, many
smoother. [2. Philip Kotler, Dipak C. different services; and many of them
Jain and Suvit Maesincee, p. 111]. represent good practice. The good
practice, however, must remain unique.
Differentiation trough service This is when differentiation becomes
Today’s economic climate ensures difficult because you cannot copyright
that all commercial organisations are an idea or a level of service. Therefore,
striving for differentiation. No one wants you must always achieve the
to merely replicate what someone else extraordinary. True differentiation is
is doing. Customers are spoilt for when the “wow” factor comes into play.
choice, with a plethora of alternatives The “wow” factor is a mechanism
open to them. Choice exists everywhere that has crept into British and European
today – whether it is where to buy commerce and is now recognised as a
groceries, which airlines to use, which bona fide service measurement. A
rail company – the list is endless. customer will always recognise the
Therefore, differentiation ultimately “wow” factor. Most customers
filters down to service levels, and experiencing it will probably remain
service levels alone. Consumers can go loyal for a considerable amount of time;
into any one of the big five such is the effect of the “wow” factor. To
supermarkets and purchase an identical achieve it is not so difficult; quite often a
shopping basket. One or two of the simple request can, when carried out
brand names may differ but the reality is effectively and efficiently, present the
that the products are the same. customer with the “wow” factor. Going
Likewise, a traveler can make a journey the extra mile, surprising the customer
from Bucharest to New York on any with a level of service greater than that
number of airlines; the flight times will expected, will also create the “wow”
be similar and the destination the same. factor. Perhaps one of the most
The only differentials will be the price common “wow” factor to hit the majority
and service. So achieving differentiation of consumers is when the maitre’d of
through service is becoming more and your favourite remembers your name;
more important. this gives an instant feeling of warmth
Differentiation through service is a tinged with tendencies toward loyalty. It
win-win situation for all involved. The is a simple task an can be something
customer benefits because the service that pays massive dividends.
levels are higher than would otherwise If you can achieve the “wow” factor
exist. The organization benefits in a genuine, meaningful way then your
because the customer is made to feel customer loyalty levels will increase
special and is more likely to return and accordingly.
use the service or buy the products To a truly customer-centric
again. The organisation further benefits organisation, customer service
through retaining customers and not excellence means simply doing
having to invest in attracting new ones. business the right way. To organisations
A customer who feels they have been striving to improve their service levels is
treated particularly well by an an imperative. To those organisations,
organisation will talk about it. That work- who have been recognised and won
of-mouth recommendation, referral or awards for customer service excellence,
written letter of reference can benefit an it is the highest accolade that a
organisation both in financial terms and customer-centric organisation can have
through the kudos that is attached to bestowed upon it.
offering great service.
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The evaluation of the customer- are your customers an inadvertent part
centric approach is a process in which of your sales forces?; do you have a
the organisation is obliged to pose and board willing to achieve these goals?
give answers to the following questions: When you put your customers high
is the customer at the centre of your on your list of priorities. When you put
business?; do you have the necessary your customers into the heart of your
systems in place to afford the customer business, make customers part of the
the best possible service?; are your culture, then you start to become
customers valuable enough to customer-centric.
communicate with on a regular basis?;

REFERENCES

[1] Kotler, Philip, Marketing Insights From A to Z, John Wiley & Sons Inc., New
Jersey, 2003.
[2] Kotler, Philip, Dipak C. Jain, Suvit Maesincee, Marketing Moves, Harvard
Business School Press, Boston, 2002.
[3] Vandermerwe, Sandra, Breaking Through: Implementing Customer Focus In
Entreprises, Palgrave, Macmillan, New York, 2004.

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