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For The Profession of Cloud/SaaS Product Support
By Mikael Blaisdell

For some time now, there has been a lot of discussion in business journals and conference agendas about Customer Centricity. Amidst all of the claims and descriptions of the benefits to be gained, however, there is a key element that is missing. What is the definition of the term “Customer Centricity?” A quick search will turn up a link to the Wharton School of Business, who use the label as the trademark for one of their graduate programs. Their definition is precise and very powerful. It’s also troubling, for it casts light on an uncomfortable truth. Many companies talk about being customer centric, but what customers want is the reality.

The Wharton School Definition:  Customer Centricity

Customer Centricity, according to Wharton, requires that a company conceive of and manage themselves “not as a group of products, services, territories or functions, but as a portfolio of customers.” The program teaches that companies who are customer centric “know how much money they make or lose with each of their customers or customer segments, and they understand why.” Perhaps most importantly, “they understand in precise analytic terms exactly how their different customer relationships contribute to, or subtract from, the total value of the firm. Because they manage their customer portfolio on this basis, they know what to manage and where to invest in order to create sustainable profitable growth…”

The essence of that definition is a strategic decision, to align who you are and what you do as a company in terms of an ongoing relationship with your customers. The effects of making and implementing such a choice are profound, fundamentally changing the company’s workflow, organizational structure, people and technology. Wharton’s program teaches that a customer centric company structures their organization into business units by customer segment, where each unit has clear ownership of the customer experience and is accountable for the financial performance of that unit.

Does Your Company Have What It Takes to be Customer Centric?

Unfortunately, I’ve never encountered any company that I would be willing to describe as being customer centric by the Wharton definition. I have found a few that offer part of the picture, and have accordingly done business with them for years, but none that fulfill all of the promise of what customer centricity could be. If you know of a company that “walks the walk” of authentic customer centricity, please send me an e-mail and describe how they fit the above definition.

The transformation to Company/Product As A Relationship thinking is all very do-able, it just takes Senior Management strategic vision, and the will/commitment to turn that vision into reality. Does your company have it? The rewards — long term profitability through increased customer retention — are there.

November 10, 2007