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Thursday, July 14, 2022

The Value of Customer Centricity: Listening with the Head, Heart, and Feet by Kanika Meshram * [43]

           

          The pandemic has upended how brands create customer value. As marketers continue to think what's new and valuable to customers, I have three brands that just got this right.

Ø  Airbnb, we all missed travelling during those dreadful lockdown periods. This meant Airbnb was nowhere near as popular as it used to be, but this brand differentiated their value position. They offered 100,000 stay places for healthcare workers and first responders around the world. They also waived all fees for healthcare workers [1].

Ø  Would we survive without Amazon.com in the early days of lockdown? I certainly did not. As a world leader in e-commerce, Amazon became the emergency anchor for those desperate to stock up on vital household goods and products to protect them from Covid-19, like hand sanitizer, face masks and disinfectants. How did they do this, read on.

Ø  Stagekings, an Australian live event stage design company, practically shut down overnight due to ban on public gatherings in the pandemic. Jeremy Fleming, the Managing Director of Stagekings decided to write an open letter to people. In his letter he wrote, “we want to keep our specialist tradespeople off the streets and our factor lights on, so tell us what is it that you guys need now that you’re stuck at home?’ His compelling open letter went viral and helped him launch IsoKings, a work from home furniture making company reporting a profit of 1.5 million in less than a year.  

If you look closely, all these three brands have an important connection—customer-centricity an almost difficult to define concept as it is to achieve. Lamberti (2013) defines customer centricity as putting customers’ interests at the centre of a firm’s actions. Yet, 85% of brands fail at achieving just that thus, value creation. [2] Let’s unpack this dilemma for a moment. Most brand have a customer centric value proposition defined as promise that summarises why consumers should buy a firm’s offering (Payne et al., 2017). But when the pandemic hit, something became very clear; most companies had shallow knowledge on their customers because of which they couldn’t adapt their value offerings quickly enough to cater to the evolving needs of their consumers.[3] Then, for those that were getting close to customers were accused of invading customer privacy. [4] But then how did Amazon, Air BnB and Stagekings managed to create a customer centric business model which is built on the heart, head, and feet?                         

Customer centricity starts from the heart, as does organisation culture. In case of Airbnb their business model delivers a welcoming and inclusive work culture throughout employee journey from recruiting and onboarding to physical facilities, and food. [5] In an anonymous employee satisfaction survey conducted by Glassdoor, 90% stated that they would recommend Airbnb to others. The company also significantly invests in creating partnerships between their employees, customers, and Airbnb host. Pre-Pandemic, the three co-founders of Airbnb consistently visited and stayed at the homes of key hosts around the world, an experience that likely built significant loyalty (Sundararajan, 2014). Thus, through Airbnb we learn the valued role of organisational culture in deploying empathy by walking into the shoes of the customers.                                                              

Another universal truth is that value is not just about winning customers’ hearts but also their head (or minds). Customers care about value —both price and time. Hence, in the lockdown period, Amazon leveraged machine learning to forecast when customers are going to place next order based on their buying patterns. According to David, the vice president of global customer fulfillment at Amazon, “machine learning models running in the background gave us different scenarios that allowed us to plan consumer spending patterns, when different cities conducted different styles of lockdowns.” [6]. Now not everyone knows how to use AI to interact with customers. But the benefit here is that customers are almost always interacting with AI. They look at their phones up to 150 times a day checking Facebook, comparing prices, researching travel, or paying bills. At any given moment a customer could be engaged in multiple interactions — transactional, personal, or even non-intentional. Some will be pleasant and entertaining, some rife with friction and frustration. But the key takeaway is that customer value creation is not only evolving, but increasingly fragmented and highly individualised. Which Amazon learned sooner than other brands.                                                                                                        

Finally, customer centricity should be the feet—the purpose of your brand existence. In market orientation literature, the underlying assumption is that a company is a repository of resources and competences. They develop products and services as their core value proposition, then the company acts on them or modifies the offer to meet customers’ expectations (Galbraith, 2002). But consider IsoKings, a brand launched out of desperation to survive the extensive lockdowns in Australia. From the outset, Jeremey Fleming had no money nor the inclination to use direct marketing to sell his furniture. Instead, he focused on direct communications with customers via social media and product reviews. Jeremy asked customers what furniture they needed, people would respond, we want a shoe rack and then 100 people would agree. So, he made a shoe rack. Then he had 1,000 people ask for a cat tower. So, he did a post and said if 400 people like or comment on this, we’ll make a cat tower and they did, so they did. Keeping customers at the core of their value delivery system IsoKings was able to expand his product line from a single work from home desk to 170 home furniture products in the lockdown period. Reflecting on these brand example, a critical learning curve for customer-centric business models is to create value by listening to customers from the head, heart, and feet.   

References

Galbraith, J. R. (2002). Organizing to deliver solutions. Organizational dynamics, 31(2), 194.

Lamberti, L. (2013). Customer centricity: the construct and the operational antecedents. Journal of Strategic marketing, 21(7), 588-612.

Payne, A., Frow, P., & Eggert, A. (2017). The customer value proposition: evolution, development, and application in marketing. Journal of the Academy of Marketing Science, 45(4), 467-489.

Sundararajan, A. (2014). What Airbnb gets about culture that Uber doesn’t. Harvard Business Review, 11. 

 Dr. Kanika Meshram is a Lecturer in Management and Marketing at the University of Melbourne. She may be reached at kanika.meshram@unimelb.edu.au. Professor Meshram has written this blog post from her research on customer centricity and interview with Jeremy Fleming from Stagekings, Australia.



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The Value of Customer Centricity: Listening with the Head, Heart, and Feet by Kanika Meshram * [43]

                        The pandemic has upended how brands create customer value. As marketers continue to think what's new and valuabl...

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