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.   

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[1] https://news.airbnb.com/en-au/airbnb-hosts-to-help-provide-housing-to-100000-covid-19-responders/

[2] https://www.lbbonline.com/news/its-not-you-its-me-why-brands-fail-at-customer-centricity

[3] https://www.forbes.com/sites/garydrenik/2021/09/21/85-of-products-fail-when-companies-dont-talk-to-consumers--this-company-is-changing-that/?sh=70364a7d2aa2

[4] https://www.forbes.com/sites/dbloom/2022/03/15/consumers-want-privacy-data-protection-from-brands-but-still-love-email-too/?sh=455604548ea4

[5] https://www.livingroomanalytics.com/how-airbnb-became-the-worlds-best-place-to-work

[6] https://www.mccormick.northwestern.edu/news/articles/2021/02/how-amazon-moved-faster-than-ever-during-the-pandemic.html

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.

Magical Marketing - Houdini's Secrets [26] *

Harry Houdini, born Ehrich Weiss in 1874, dazzled American and European audiences with spectacular magic and illusion feats until his death on Halloween, 1926. Adapting his name from his hero, J. E. Robert-Houdin, a French magician, Houdini quickly established himself as the top entertainer in the world in the late 19th and early 20th centuries. While everyone knows about his marvels as a legendary magician and escape artist, few know that much of his success was due to superb marketing.

Here are 5 marketing lessons learned from Houdini that you can apply to your entrepreneurial venture (and you don't need to wear a strait-jacket or be handcuffed to pull off this marketing magic).

1. Always be prepared! Houdini always had a plan and was very resourceful. He was ready for any physical or mental challenge. While Houdini clearly took chances, he believed in managing risk. He used his superior intellect to conduct research and obtain knowledge of all situations and always had the right tools to get the job done. It was not uncommon for Houdini to spend up to 10 hours a day practicing challenging escapes.

2. Leap-frog the competition. Houdini constantly studied the market and prepared for imitators and new competitors. He dissected strategies used by his rivals and never let his competitors know what he would do next. He read every book that was published on magic acquiring a personal library of more than 5,000 volumes on the subject. While rivals were content to break out of handcuffs, Houdini did this while suspended upside down from skyscrapers, on top of bridges or immersed in water.

3. Fine-tune your positioning strategy. Houdini understood the sheer power of a brand name a century before this became all the rage in marketing. Quality was at the heart of his value proposition, always exceeding customers' expectations in his live performances. He knew that perception was reality and had every detail worked out in advance to provide a superior customer experience. While other magicians made rabbits disappear, Houdini vanished a full-grown elephant in plain sight. To extend his brand, Houdini went global and conquered Europe, as well as America.

4. Build a world-class product. Houdini carefully guarded his trade secrets and invested in his product. He diversified to build his product line and product mix. An advocate of the kaizen approach (continuous improvement), Houdini regularly sought incredible new offerings while enhancing his existing repertoire of tried and true stunts. His three-minute water torture escape from a steel-encased cabinet was world renowned. This was one of his several signature acts that could not be replicated.

5. Be creative and never stop promoting. Houdini was the consummate sales pro as well as the master showman and publicist. He stimulated word-of-mouth promotion in every city he visited by promising unimaginable events that he later successfully executed. Houdini often dropped in on local police stations during the day in the cities he was visiting and challenged them to keep him from escaping their most secure chains/restraints, handcuffs, jail cells, or locks (his arsenal of four hidden keys/picks always got the job done). The publicity gained from these teaser appearances drew huge interest to his evening shows. The word spread nationally and internationally in an era that had no television or internet!

Art Weinstein, Ph.D., is a Professor of Marketing at Nova Southeastern University. His research interests are customer value, market segmentation and entrepreneurial marketing strategies. He may be reached at art@nova.edu 

* This post is extracted from his article "Houdini's Magical Marketing Strategies" published in the Journal of Strategic Marketing (2020).  Full article: Houdini’s magical marketing strategies (tandfonline.com)

 

How Jamestown Descendants Used an Entrepreneurial Mindset to Survive and Thrive by Hilton Barrett * [20]

Circa late 16^th century, the Old World -- the early era of colonization. Why did our ancestors leave England to establish a colony in the New World? Why would they leave the “safe” conditions of England for unknown lands?

Most of England’s populace was ‘country folk’ with little education and even fewer choices as to life decisions. The vast majority of the people were peasants and received little education and had few vocational opportunities beyond being a peasant. There were comparatively few families we would call middle class. London was overcrowded due to a population boom plus arrival of peasants who could not find reasonable employment in the countryside. It was congested with an overwhelming stench. In society, self-indulgence was rampant, rudeness ruled, and social disintegration was evident. Corruption was rampant, at all levels of society.

Religion and church were major issues. The establishment Catholic Church was being challenged by Protestants. Europe and England were intensely divided over religion. Religious and social factions were under increasing attack from each other in England.

Spain had a head start in colonization and trade in the New World. England was becoming isolated and offered limited options for its people. England needed to expand its domain and how it viewed opportunities outside its sphere. Colonization in the New World was a means to increase its treasury and influence.

In 1584, Sir Walter Raleigh sent two ships to the New World to establish a colony. Once established, shiploads of settlers would be sent to expand England’s domain. On July 4^th, 1584, the ship sighted land – a long sand bar off the North Carolina coast. They went through an inlet and onto what is now known as Roanoke Island. They discovered a fruitful land and kind natives. The queen claimed all of America north of Florida as English property. Alas, the area was bountiful as to cropland but had none of the gold and silver found by the Spaniards in the areas now known as Mexico and Peru.

Were the colonists in America victims of the political and religious uproar within England and much of the rest of Europe? Relating to the power of the Church of England, there is evidence that the colonists were ‘separatists’ and did not receive the necessary support from the government and religious sector within England.

Given this historical setting, what are the profiles of people who would take the risk of moving their families to a new land of which little was known? Our premise is that these trailblazers exhibited traits that today we would call entrepreneurial and value creating.

These settlers had to fend for themselves under harsh conditions. They exhibited similar intrapreneurial characteristics that business practitioners might use to start a venture within a corporate structure. According to Covin & Slevin (1991), corporate entrepreneurship behavior is based on three key tenets: 1) innovation (launch concepts that have not been done before), 2) risk-taking propensity (go out on a limb since that is where the fruit is), and 3) proactiveness (take appropriate action in anticipation of future problems or needs).

According to Blue Ocean Outsource (2019), there are five major theories of entrepreneurship: economic, resource-based, opportunity-based, sociological, and psychological. The latter perspective (psychological) is representative of trait theory.

Trait theory can be expressed in numerous ways. For example, the “Trait Theory of Entrepreneurial Leadership” consists of twelve attributes in five trait-related areas (Erkkila, 2000):

  > creative, imaginative, and flexible

  > autonomous and high locus of control

  > achievement-oriented, diligent, initiative-directed, and problem-solving

  > leadership and persuasiveness

  > risk-taking (moderate)

With respect to the Jamestown colony, consider the following scenario:  

1    They were dissatisfied with their position in life and their opportunities.

2    They held religious beliefs which supported the ‘leap of faith’ to a better life for self and family.

3    They had a strong belief in themselves and what they could accomplish given the opportunity. They had a high locus of control (they, not outside factors, were basis for their success). 

In sum, they had the ability to understand their options, a degree of sociability (worked well with others), an ability to understand what were their feasible options, were accepting of moderate risks, tolerance of others and their ideas, and need for dominance when required, and industriousness. They believed in their own abilities to accomplish ambitious goals.

Failure was a learning process. They had a low need for conformity (after all, how many would have taken the risk to leave England and come to America?) Psychologically, they had or developed planning and problem-solving abilities. They had a high level of energy and willingness to work hard. And perhaps most importantly, they developed the ability to accept change.

As history revealed, the original colony did not survive. However, the commitment to colonize America had been established. In 1607, the London Company sent a colony that did become the first English settlement in America – Jamestown on the James River in Virginia. 

The characteristics of the original colonists and those who settled Jamestown had the same decision making and belief profile of the group of people we, today, call entrepreneurs. Entrepreneurs are not just people starting businesses, they are people who recognize and nurture new ideas that benefit society.


References

Blue Ocean Outsource (2019), Theories of entrepreneurship: traits of an entrepreneur, April 4, https://blueoceanoutsource.co.ke/

Covin, J.G. & Slevin, D.P. (1991), A conceptual model of entrepreneurship behavior as firm behavior, Entrepreneurship Theory & Practice 16 (1), 7-26.

Erkkila, K. (2000), Entrepreneurial Education, NY: Garland.

* Dr. Hilton Barrett is a Professor of Business (Retired) at Elizabeth City State University, North Carolina. A renowned entrepreneurship scholar, Dr. Barrett is published in leading journals in marketing, management, strategy, and innovation. Dr. Barrett resides in close proximity to the original Jamestown settlement and gives historical talks on this subject. He may be reached at jhiltonbarrett@outlook.com