Mar 09
3
The Crisis & Customer Centricity
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The Crisis & Customer Centricity
Customer Focus: solution or problem in times of crisis? As organizations brace themselves in economically hard times it seems a good moment to evaluate the benefits and risks of the Customer Centric machinery they have put- or have neglected to put into place over the last decade. What is the potential of a Customer Focus approach in times of crisis: what risks are involved? Which measures and values should we adopt to make such a strategy work for us under the current conditions? Versatility, flexibility and originality appear to be at the basis of some striking and inspiring successes even in an economic crisis:
Theoretically an organization that has invested in a Customer Centric or Customer Focus strategy should be better placed to face a crisis: the circumstances have changed, this has an impact on individual customers’ needs: luckily we know exactly what they want! Of course we don’t! So: what are the changed needs of your customers in an economic downturn? What are the risks and the opportunities? This will vary from individual to individual. If you’re thinking: “to buy less of my product or service!” ,you’re thinking from a product-based mindset which is the reverse of a customer centric approach. So the question arises: what are answers based on a Customer Focus approach in times of crisis?
Theory and Practice
1. Focusing on your existing customer base
Over the last decade large corporations have made giant leaps in focusing their attention on their existing customer base: classifying individual customers in terms of desirable or undesirable behaviors, rewarding ‘good’ customers with preferential treatment and putting de-marketing measures in place against ‘undesirable’ customers for example those who miss payments or don’t use new strategically important products or services. If harshly applied such a strategy could back-fire on the organization that adopts it because one case of a maltreated customer in the mass-media can damage an organization more then the sometimes only incremental increase of the loyalty of preferentially treated customers could make up for.
None the less: in order to apply a Customer Focus strategy to your processes, you have to map your individual customer’s behavior in relation to your organization in order to be able to cater to their needs and wants. One of the benefits an organization who organized their customer-base in a pyramid will at least have is that if it’s ‘good’ customers have indeed been inspired to loyalty (which depends entirely on the way they have been treated and/or perceive others whom they care about as being treated and/or the value they perceive in being treated as they are against the cost-efficiency of the organization) and if it’s ‘bad’ customers have been demotivated enough to leave the organization’s customer base: the health of the customer-base as a whole will be sufficient to last the organization through a crisis. The way I’ve put this benefit here, as being dependent on lots of factors other then the simple fact of a text-book strategy, suggests that a delicate balance has to be struck between avoiding risks and (perhaps unduly expecting) loyalty if this strategy which is a part of a Customer Focus strategy, is going to work in times of crisis.
2. Pull, don’t push!
Perhaps I should add that a small real world business who’s only registered customer information other then name and address is the client’s birthday will have a better result by using this information in a surprising manner, perceived valuable by the customer then by trying to mimic a large corporations time- and capital consuming data-ware house capacity and registration of all individual customer’s behaviors. In other words: there are many considerations to be made and one of them could be to win the harts and minds of your customers with a simple (low tech) gesture: a pull strategy rather then a push strategy or hard selling.
One company recently took an extreme conclusion from their customer centric business philosophy and actually gave away money in several American cities, apparently defining this as a need or want amongst certain cross sections of their target audience. This could be classified as a mass-marketing publicity stunt maybe, but it’s also a shining example of unconventional thinking, flexibility, based on the perceived needs and wants of a customer base and, more importantly: a pull strategy rather then a push-strategy. The cost of this stunt has no doubt been offset in a business case scenario against the expected benefits in terms of name-recognition, loyalty (community-building) and future benefits as well as the sheer fun of earning a place in (marketing-) history.
3. Customers: more then JUST customers
Whatever part of a Customer Focus strategy does fit your organizational profile: it has to be executed in a manner catering to your individual customer’s preferences. It can be helpful in this respect to understand that however complicated you’re warehousing- or other measuring capabilities are: you will never be able to truly understand your customer. A customer is a multi-layered individual. Apart from his very limited role as your customer or prospect a particular individual may also be: a housewife, a father, an employee, the cousin of your largest shareholder, a supporter of a sports team, a member of a union or political party etc. All of these states are circumstances which potentially inhibit or trigger indirectly his consumer-behavior and his relation to your organization. Even if customer centricity is indeed a priority in your organization then all of these factors are uncertainties that are for a large part still uncontrolable. Decent business practices, terms and conditions and relations to your organizations environment may be more appreciated, more ‘real’ as others start taking shortcuts. The other identities may also give you an indication of how the economic climate is affecting an individual.
4. Knowing your organization’s environment
One entrepreneur put his anxieties to me in the following nightmarish metaphor: “You (as an organization) may just be reaching the peak of a hill you’ve been planning to climb in a stable landscape and as you reach the top of the hill you realize that before you lies a landscape of ever changing mountain peaks higher then that hill you just climbed and intertwined by rifts and valleys who’s depth seems to alter while you are looking on. One of the rifts maybe the current crisis another valley might be some unnamed risk that could turn into an opportunity and rise to be a hill a days march from where you are standing (or might not). The landscape he called: the globalized and individualized economy.” What does this perennial uncertainty demand from an entrepreneur? Flexibility, versatility, originality and a true sense for your customers needs and wants, appear to be excellent candidates:
5. Acquisition based on information
From the unpredictable circumstances I’ve just described it would seem almost pointless to focus attention on your customers preferences and their ever changing humors in a time of necessity, however: your relationship with or relation to your customer is the basis of your organization. Information which may assist you in maintaining that relationship is paramount to the survival of your organization. Information and communication are the basis for an Island of relative stability in an unstable environment. That is: if applied as an instrument to making the maximum use of your versatility, flexibility and originality!
In catering to the needs and wants of your partner in that professional relationship, Customer Focus is an instrumental set of methods, not a goal in it self. If placed in the hands of ‘the perfect entrepreneur’, Customer Focus would be the basis of great successes, the magic that keeps relations with clients alive, helps find new relations and guides organizations through bad weather. Being an instrument however, the hand that wields it, relying on thge entrepreneurial qualities of: versatility, flexibility and originality defines it’s success.
In an inspiring example: a local supermarket-owner, against the odds of the overwhelming power of the marketing-machinery and ‘war-chests’ of chains much larger then his establishment, recently used his ‘local’ identity to his advantage. Turning the tables on it’s large competitors by using the very type of marketing-campaign he feared would destroy his shop in the long run. It took the common ground local inhabitants had with him: the local soccer club.
While the large chains were marketing give- away soccer-cards of distant international soccer clubs such as Manchester and Barcelona, this savvy entrepreneur stole the harts of the entire village population by giving them similar cards of themselves and their children in their soccer outfits of the local team to collect with their groceries. Needless to say: the local branche of the international chain faced some very slow weeks. The reasons for this make perfect marketing- and Customer Focus sense. The offering was:
Basic principles
-customer centric;
-a pull strategy;
-based in the wants and needs of customers/prospects;
-based on (knowledge of) a relationship (customer base);
-based in a shared identity other then business;
-versatile, original and flexible!
-Customer Focused based acquisition.
Presentation:
The House Of Business: Customer Focus!
View more presentations from Job Folbert.
About the author: Job Folbert is the CEO/founder of Imocial. Join his network or contact Job directly:
E-Mail: blog@thehob.biz
Network: http://hobhub.biz
Main site: http://www.thehob.biz 
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