Degrees of customer centricity in today’s business world

Born in the 70’s, “Customer is King” was the business mantra I grew up listening to. But it no longer seems to be the case. While the advent of Internet has been the biggest disruptive force to hit the world of business, there is a lot more behind the journey of the business world to where it is now.

There are two factors to be clearly understood and even wary about when driving a business enterprise to it’s success – acceptance and adoption. In the brick and mortar model of business, it is extremely difficult to foresee changing customer preferences or what factors would drive customers to change their preferences. A simple example is the Indian film industry. A commercially successful movie was supposed to have a certain number of action sequences, songs, dance scenes, emotional scenes and comedy. It was the blueprint for success in Bollywood (and still is in some regional film industries) until a first time director (Farhan Akhtar) shattered the stereotype in 2001. It was the fear of acceptance that had kept Bollywood from evolving out of the rut it got stuck in. Same was the case with the world of business as well. The same fear of acceptance kept Kodak from disrupting it’s own business model by embracing the digital camera before it was too late. The increased adoption of technology in business made collection of data from business easier and software applications made it possible to collate data from different business segments, analyze them and understand what factors are driving business up and down. Adoption of the internet and the advent of eCommerce finally broke the fear of acceptance and adoption as online stores does not even cost a fraction of the brick and mortar ones.

One fear gave way to a new one – customer support and satisfaction. As customers started adopting to technology and accepting new and radical products, it became imperative to measure and understand how satisfied the customers are. Back in 2004, my life was meandering through regular IT support jobs when I was hired for the project of a European client, at a time when I had no idea that IT support services were getting outsourced. One incident changed my professional life and helped me understand my way ahead. One of the client’s software applications had stopped working and it was reported to the support team I was part of. We worked on the issue as per the priority on which the issue was reported. When we informed the client that the issue was resolved, we got the feedback that what we worked on was an invoicing application and in the time we took to resolve the issue, they had lost a number of orders. The problems associated with it were manifold. Poor understanding of client’s business applications, wrong prioritization of their issues, all of these stemmed from the lack of understanding of client’s business environment and their requirements which led to the support team working on an issue with no understanding of its business impact.

In my next job, I worked on a product in a client’s environment for more than 2 years and was able to create a new system design for the product’s upgrade in a few hours, not merely because of my knowledge of the product but because of my understanding of the client’s business environment and the needs of its different business units. When I was sent to a client’s premise in the UK as the leader of a team for a large transition program, what was important to me was to understand the client’s business environment and what technical issues were currently affecting the client’s business. As the client’s entire IT activities were getting outsourced to the company I was working for, it was just commonsense for me to understand and resolve existing issues before owning the responsibility of the environment.

That was back in 2010 and technology has come a long way from then. This is the time of AI and Analytics and putting them together has resulted in predictive analytics which is helping businesses to take informed decisions and make successful plans for their future. But how much of all of these have filtered down into the traditional brick and mortar stores? At home, we buy groceries on a monthly basis from a grocer we have been customer of for 15 years. For daily needs, we go to a nearby supermarket store. There is a particular pattern to the items we buy from the supermarket store, like milk, eggs, bread, etc but more importantly there is a pattern to the items we do not buy, like cooking oils, pulses, rice, wheat, soap, etc. No one in the store has asked us yet where we buy these items from.

I received a call from an aspiring startup’s co-founder some time back for advise. They were planning to create an online platform from where anyone could place an order for any item and they would deliver it. The word anyone was a concern for me. There is a very good reason why India is and will never be a completely digital market – people’s purchasing power. A big chunk of its population of people make their daily purchases on debt. The local grocers keep accounts of these purchases and people keep paying as and when they have money with them. Even the local restaurants in many places especially the smaller eateries do the same. This is a business model supermarket stores can never replicate and hence the local grocers continue to be in relevance. This is an important reason why the India government’s decision to demonetize its currency notes has destroyed India’s economy as it has further weakened people’s buying ability. When I mentioned these aspects to the startup’s co-founder and asked him how he was going to tackle them in his business model, he had no answer. Borrowing or getting inspired by a business model in another country is fine, but there can be no excuse to not knowing about their own country’s business nuances.

As products and companies of all sizes throng the online market and jostle for space to find their feet, nothing is more valuable in business now than customer loyalty and repeat customers. One look at Amazon’s fulfillment center (https://gadgets.ndtv.com/videos/behind-the-scenes-at-an-amazon-fulfillment-centre-521443) is enough to understand the complexity of its customer-centric business model. More than the number of its business segments, what is mind boggling is the fact that an individual could be its customer in multiple business segments and would expect the same level of customer service across all business segments. Multiply this by the probability of doing business with a few thousands or a million such concurrent customers and maintaining the highest quality of service across business segments is beyond comprehension.

Is customer still the King or has business become the Emperor of the King?

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Companies and products don’t die they become irrelevant and fade away

I have heard from many people that the startup initiative in India has been a failure but no one said why. Below is a list I obtained from a social network about the top reasons why startups fail.

 

Interestingly, a startup company had contacted me few months back asking me if I could be their mentor. Their product is on the lines of Askme.com and they were trying to market it in Kerala, my state in India. The key problem was the people of Kerala are not even fully used to the shopping mall culture yet. We still prefer buying from local grocers, medical shops etc. So searching about products on the internet is still a long way away. My question to the company was, do you know if there is a need for your product in the market you are targeting? They had no clue. This is the top reason on the above list. Lack of proper due diligence. What they wanted from me was to understand how to market their product. I told them that you need to go back to your drawing board and figure out something crucial. Simply putting your product out there is of no use. You cannot force people to use your product. So what can you offer them for using your product? You need a better product strategy before you get on to business strategy and that is where marketing strategy comes in. I haven’t heard from them after that.

Even worse is not understanding when the product is ready to be in the market. Mature companies too have new products and services in their pipeline but what makes and keeps them successful is their ability to time their launches precisely. The extreme of this is Apple launching their products whenever they want to because they have a phenomenal market following. But that’s Apple. There is a concept called Minimum Viable Product (MVP) which can help understand when to stop working on the product and launch it. How do we know this? Work on creating those aspects of the product which could create market disruption or get noticed in the market quickly. When this is successful then it becomes easy. People will take over from there. All we need is to take feedback from customers. Customer expectations will tell us which features of the product are more relevant and need to be out there in the market quickly.

There are two phases of every lifespan be it that of the Universe itself and everything within it. Evolving and maturing. Business also follows the same pattern. A friend is learning to be a professional cake maker and my advice to her was simple. If she is going to bake cakes like everyone else is, she is not going to get far. Evolving stage is the experimenting stage where she needs to mix and match and see what unique she can create. So how will she know she has matured? When customers start calling her for her cakes.

My dad has always loved cooking non-vegetarian food. He looks up on a lot of recipes on the internet but then finds his own niche way of cooking. He has been asking me to help him find a market for his food. He cannot compromise on the quality of the products he uses for cooking which essentially means he cannot target the lower and the lower middle strata of the market. If he tries to sell at those levels, he will have to lower his price thereby lowering his profit margin considerably and moreover there will be very less appreciation among those customers for what they are getting. All of this means the key is in the positioning of the products. Positioning will determine the pricing and marketing strategies.

I believe products and companies become irrelevant and fade away rather than fail. Nokia and Kodak are great examples. Nokia phones became irrelevant when their Symbian OS was run over by Android and iOS. With Kodak, the most fundamental mistake happened. They matured and stopped evolving and got run over by technology. Evolving to maturity shows the growth trajectory of the company or the product. Sustaining and staying relevant in the market demands continuous evolution of another kind. This is where the sheer genius of Steve Jobs shines brightly. In the middle of iMacs and Macbooks and iOS and iPods and iPhones and iTunes, he still found the time and space to figure out that there could be demand for a device that could bridge the gap between the Macbook and the iPhone, thus creating the iPad. I have wondered how tuned his mind was into the world of business and how he used to keep his ears to the ground. He seems to have understood the threat of stagnation and becoming irrelevant which should be the reason why he created such a huge product catalogue and a possibly unknown product pipeline on which he was supposedly working till the time of his demise.

There are great companies and greater leaders to look up to. But ultimately success depends on the course we charter and when we are able to muster the strength, wile and guile and navigate ourselves through the choppy waters of the business world.