Why Customer-Centricity May Be Missing the Point

If you've been following this blog you'll have noticed that I've started studying Coursera's Introduction to Marketing course (I highly recommend that you sign up for it if you're interested in marketing). This has gotten me thinking a lot about marketing principles and business ethics, and I've been involved in some pretty heated debates on the Coursera course forums.

The most recent has involved the principle of customer centricity, as it was presented in the lectures by one of Wharton's professors, Peter Fader. TAKE-AWAY AT THIS POINT: it's going to be long post, but this speaks directly to what I see as the new corporate crisis evidenced in many aspects of presumed 'poor customer care'. If you're in marketing this will be of interest, and even if you're not it might be illuminating.

The one thing you need to understand beforehand is a rough definition (mine as I understand it) of customer centricity: 

Customer Centricity is a corporate philosophy (existing in opposition to 'product centricity') that uses detailed information about customers' buying habits and personal profiles to identify which customers have the highest Customer Lifetime Value (i.e. a measure of the total they would be likely to spend in the future with the company) and then tailors product-development and marketing activities directly at this 'high-risk, high-reward' segment of consumers (in order to retain them and attract more customers just like them), while still retaining enough of the other less-valuable customers for overall stability and as insurance if the gamble taken with the first group backfires in some way (e.g. if they change loyalty rapidly). It is argued that this approach allows companies to make smarter marketing choices by optimising their marketing spend and operational processes to extract the maximum value from the individuals who will ultimately be the most valuable to the company in the long run. 

On the face of it, it sounds like a very sensible practise, right? I however have a few cautions/objections to this, which I outlined in my forum post on the Coursera course forums this morning - copied in full below:

Ok guys, first-off a big thanks for turning this into such an engaging discussion. I realise that a lot of confusion has resulted from me trying to unpack an initial gut reaction on a logical level by responding to engagements here, but I think that the point I'm making is highly valid and I'd appreciate one last chance to present it in a more logical manner for you all. Below I'm not just going to take you through a series of Q&A, but rather a progression of realisations that depend on each other. 

Q1: Why do you say that you disagree with Professor Fader when you're not disagreeing with what he says?  

A1: In so far as Professor Fader is arguing for what I will go on to demonstrate is a sub-set of a broader whole, I am not disagreeing with his specific sub-set (which makes sense in and of itself) but rather some underlying philosophies and their ramifications on the customer experience. 

Q2: In what way is customer-centricity as outlined by Peter Fader a 'sub-set'? 

A2: I'd argue that true customer-centricity should be judged from all customers' perspectives. We're using 'customer-centricity' here to distinguish it from 'product-centricity', where companies are focusing on analysing their customers to increase their profitability, but while the central goal remains the companies' wealth and not the customer's well-being the tactic isn't so much 'customer-centric' as it is 'company-centric with insights from customers'. With this in mind, my take on customer-centricity is even MORE customer-centric in a true sense, because I'm concerned with all customers, while Peter Fader's customer centricity (*important proviso below) is a triage mechanism which focuses the maximum resources on attracting and retaining a small group of customers deemed to be valuable and gives them a better customer experience than the rest. 

Q3: Oh dear, so is this just semantics? What are those ramifications you spoke about in a real sense? 

A3: This is where it gets fun. You see, making the leap from VALUABLE customer-centricity (sub-set) to TOTAL customer-centricity (all customers) is as big a leap as the one from product centricity to customer centricity in the first place. Remember that the key point with this latter approach is that you often end up doing the very same sorts of things but with a different initial intention, so the outcomes are different? Small changes at the start - e.g. in 'initial motiviation' make a big difference later on. The defining ramification here is one of consumer trust. Can ALL consumers walk through your store's doors and trust that they will receive the best service from friendly salespeople who will advise them in their personal best interests, or is it rather a case of ALL customers walk through your doors and trust that they will receive the best service from friendly sales people IF they are categorised to be valuable customers, who will advise them in their best interests IF that advice still enables extracting the maximum profit from them later on? 

Q4: Ok, and why is corporate trust important? 

A4: We've already spoken over and over again about how consumers are getting more discerning and they need to be able to trust your brand and your company. If presented with two competing companies and the only distinguishing factor is that the one is trusted and the other isn't, consumers will always go with the one they trust. By implementing a corporate policy which only favours a limited sub-set of consumers based on what will be best for the company in the long-run, a company will at best be at risk of losing their customers' trust and at worst be vulnerable to being accused of hypocrisy (marketing messages tend to make all customers feel that they'll receive the VIP treatment when in reality only the valued sub-set do). 

Q5: So what is the alternative? 

A5: I'm not saying that 'traditional' customer-centricity is a completely bad thing, in so far as it entails actually getting to know your customer base more and figuring out how you can delight them with products which are matched to them. Where it gets to be a bad thing is where you filter out the customers you deem to be less profitable right at the start, tailoring everything only for the richest's needs.This affect is further exacerbated when you use data you gain on your customers (more than some would feel comfortable with you having in some cases) to sell to them at times when they are weak, despondent or less able to make rational decisions, solely in favour of making a sale. I'm going to call it as I see it, and that is manipulation. The real alternative here is a moderated approach: get customers buy-in to share their data with you to deliver services to them which surprise them pleasantly, and keep your focus on ALL customers equally in recognition that customers you'd skip over otherwise now may actually be great later on. Do this so that customers can genuinely trust you, not only confident that they'll attract your attention in a real manner when they exude wealth (whether physically through their clothes or intangibly through the data categories you have on them).

IMPORTANT PROVISO: Why single out Peter Fader?I have nothing against Peter Fader personally - I don't know him, apart from his words in these videos. The picture he has painted with those words in no uncertain terms paints him as an advocate of the limited form of customer-centricity, although in reality he may have all kinds of fuzzy 'be nice to all consumers' philosophies that he just hasn't shared here. I'm happy to allow for that, so when I talk about 'Peter Fader's customer-centricity' it is only as a label to distinguish it from what I'm proposing. 

CONCLUSION: Corporations have for too long run on faulty premises. We recognise on a personal level that the majority of the world is classed as poor, and therefore we are arguing (with no melodrama) against humanity when we want to pursue tactics which automatically benefit the richest people unfairly (i.e. we give them the best service before they even have to buy it from us). Another faulty premise is that permanent improvement is possible. Again we recognise individually that this is impossible, and time and again companies' management are placed under mind-bending pressure to try and deliver improving results in declining economies. Just like there will only be one winner in a race, not all companies can be winners. A final faulty premises is that the data doesn't lie. It does - too often we can see from profiles that search engines build of us based on what we search for (for example) that the picture a sub-set of our data paints about us is completely not who we are in reality, so anybody using that data to target us would make wrong decisions all day long. The bottom line is that if ALL companies switched to absolutely perfect customer centricity overnight, there would still be businesses closing down simply because there is constant competition for share-of-wallet/mind, and we'd just have shifted the goal-posts. Let's take a moment to pause sometimes and ask what will be genuinely sustainable and ethically sound, and what will earn us the unreservedly genuine trust of our staff, customers and suppliers.

Phew, that's it. I'd love to know your thoughts. Sometimes I get the feeling we're so busy trying to make the 'right' decision that we lose sight of our shared humanity and the kind of world we actually want to live in.

This is South Africa

Usually tourism videos about any country are pretty cringe-worthy, but South African Tourism finally knocked one out of the park. Obviously there's a LOT more to the country than this, but it's a beautiful snapshot of one possible tourist experience (with a twist at the end).

The Perfect Business Model

Nothing in life improves consistently, no matter how much effort you put into it. Businesses, however, are expected to unfailingly deliver improvement ... better products, more customers, and most of all MORE profit. No wonder there's a vast amount of tension: managers are tasked with 'managing' the impossible.

So this got me thinking, what WOULD the best business idea look like? Here are a few thoughts:

• It would be a business you could start up with ZERO in the way of input required - no funds needed, no special infrastructure. Just a smooth transition from 'not here' to 'here'.
• It would obviously require NO STAFF. Staff are a minefield all of their own, with legal issues and sick days and retrenchments and health and safety and wages. Better just leave them out the picture ... maybe do leave room for like-minded individuals to volunteer their own time completely at their own risk. Is that even legal?
• It will be ultimately FLEXIBLE. Are you making pencils today? Tomorrow you should be able to be selling coffee, or the day after that mowing lawns or stitching up patients.
• It will be FUN. Yes, this will be a business that you will personally want to get involved in, because you enjoy it and are personally invested in it. However, that is bearing in mind...
• ... it will be completely OBLIGATION FREE. Don't feel like work? No problem, head to the beach!
• It will make LOADS OF MONEY. Like exponentially. You'll need to open new bank accounts just to hold all the money.
• There will be NO RISK. Without this point, the perfect job would seem to be a life of crime, wouldn't it? However, being a criminal is a risky job - there are those police to consider, the back-stabbing from your fellow criminals, and don't even get me started on how unflattering the colour black is.

And ... *end of the road* That's how my thought process always stops, as soon as I realise that you have to HAVE something that other people want. It's right on the label: products or services. People don't give you money for nothing, or do they? Of course, money isn't the only capital worth having ... and therein lies the secret. 

What is it? I'll let you know as soon as I've successfully launched the company and copyrighted it 100 different ways! 

#WhyImVotingUKIP, Not!

I'm not going to say that I personally brought down the UKIP - it appeared from what I've seen that they are more than capable of that themselves - but I will say that it's hugely gratifying to see this awesome story with some hilarious Twitter users lampooning UKIP with the #WhyImVotingUKIP hashtag.

Two awesome examples:

This is particularly awesome because back in August last year I'd written this open letter to Nigel Farage, giving him a piece of my mind, and as far back as January last year I'd already written this piece on the UKIP's scary 'Romgarians'. I'm not saying I personally made the Internet do something awesome now, but I'm definitely a long-standing part of it!

So then, why are you #NotVotingUKIPuntilTheyStartServingFrostedMilkshakesInHell?

PS: In other news, this is what my blog's web-counter was just sitting on. What were the odds I'd be online to see it happen?

Escaping Your Specific Closet

I've never been one to really care about peer pressure, but that's been mostly because I've never let anybody close enough to me to pressure me. I've never looked up to friends, so never felt desperate for their approval ... I understand it's not like this for everybody.

In school I was the quiet kid who fell in love with so many girls - never quite got around to telling them all - that I wasn't distracted by trivial things like friendship. Ok, I'm over-emphasising the point - I did have some great friends, but there were also plenty of times when I was 'between friends' and perfectly fine with that too.

So why that tragic bit of over-sharing? Just because it ties in with this video I'm about to share. We all go through some really confusing patches growing up, and it DOESN'T end in school ... it just keeps going. Why then do we frequently make it harder on ourselves than it really has to be, by trying to internalise some pain, or not having hard conversations we should be having?

Who better to share some amazing insights into hard conversations than this lesbian speaker at TEDx? Trust me, what she has to say will speak directly to you: Coming out of your closet: Ash Beckham at TEDxBoulder

Some key take-aways:

• "Hard is not relative. Hard is hard."
• "I think we all have closets. All the closet is, is a hard conversation."
• "Sure, it would have been easy to point out where they fell short. It's a lot harder to meet them where they are and acknowledge they were trying. And what else can you ask someone to do, but try?"
• "Apologize for what you've done, but never who you are."

Thanks for that Ash. Another reminder in this plastic world that it's ok to feel.

Hijackings in South Africa: Carjack City video

I realise I've been posting too many upbeat things on this blog, so here's a reality check I just stumbled across today.

It comes with a big disclaimer: a video like this will easily leave international visitors feeling as if South Africa is a war-zone, but it's simply not. There IS however a lot of crime, but with sensible precautions and a reasonable amount of luck you can easily live without ever coming into contact with any of it.

As proof of that, I'm 28 years old, have lived in Johannesburg for five years, and now living in Cape Town, and have never personally witnessed a car being hijacked. That being said, my first car *was* stolen out of my office parking lot in Johannesburg, but I was nowhere near it at the time and nobody saw it ... it just vanished.

Similarly, I've never been a victim of a house robbery, but places I've lived nearby have been broken into. The security arrangements where I live are definitely one of my top concerns now, and I pay more than I should on rentals just for that peace-of-mind.

You know what they say about statistics: there are lies, damn lies, and statistics. In this case I'd just ask you to put South Africa's crime figures into the context of the country's scale (we have 50 million people living here - over that probably if you count illegal immigrants) and poverty levels. I don't fear for my life every day and 90% of the time my decisions in life allow me to not have to ... other people, like those in this video, are not that fortunate.

How do we address this problem as a society and even international community? If you consider poverty on a global level, there should be a LOT more crime than there is: the fact that we can still all live relatively normal lives is actually an indicator that the majority of the world's poor people have managed to do the right thing and refuse the allure of crime. I have the deepest admiration for those people: being so poor that you cannot support your family, and yet refusing the easy ways out offered by crime shows a level of determination most people never recognise.

One criminal in the video above justifies his actions by talking about 'survival of the fittest', and that's not true. Being a criminal doesn't make you a better man than anybody else. But being a victim of crime doesn't either, nor does being an unthinking part of a capitalist system that marginalises more people than it uplifts.

This isn't going to just go away until we collectively find a sustainable manner of providing for society's most vulnerable. As for what we do about society's greediest - at all levels ... that's a thornier question. Maybe technology has a solution, and a moderated version of the Big Brother State - where the perpetrators of crime are immediately identified through monitoring and biometrics and held accountable - is the only alternative. Live in fear of Government or your fellow citizens: those are your options. Which do you choose?

I know I promised to not just Content Aggregate, but...

... oh please, just forgive me for posting the two most hilarious videos I've seen in a long time. You know, just to counter all the soppiness. And yes, to build off my last post, this is also part of what I like.

And yes, of course there's a second video:

Oh man, I've got serious carpet burns from ROFL in my mind.

Things I Like, Part Who's Counting Anymore?

I swear I'm getting sentimental in my old age - old age being almost 30 - but I'm starting to realise that who WE are is very much a compilation of everything we like. There's a lot of stuff that we like that we can change, or stop liking, or like even more, but sometimes some stuff will just always resonate with us.

That's what I want to share here, to brighten your day a little. Just look past the cheesy music to embrace the awesome humanity expressed in these videos:

1: Matt Harding's 2008 video:

2: Can it get better? Oh yes, it can. The 2012 video:

3: The full back-story ... click here.

PS: You're never going to enjoy it unless you watch all the way to the end, and see the little nuances. Like how Matt breaks the rigid dance moves in the first video, or where his wife and his kid join him in the second video.

I like this.

Cannot connect to WiFi network? That dreaded 'Cannot Connect' error!

Has your laptop suddenly started refusing to connect to your WiFi network? I've been struggling with this for about the past two weeks without having done anything different on my side ... just one day it was working, then it wasn't. Now I have the solution, and I just had to share!

[UPDATE: It's taken a few extra months but I have a new theory. Read it below.]

A quick Google (from my phone - doh) identified that the problem may be a faulty device driver update, which I'm guessing my laptop helpfully did in the background. The solution, on Windows 7, is just this easy:

Start -> Control Panel -> Device Manager -> Network Adapters -> [Select your wifi adapter] -> Driver Tab -> Roll Back Driver.

One click of that, and everything works like an absolute charm again - no reboot or anything needed. Just in case you'd like a visual cue, it looks like this:

Thank you for fixing my Internuts, Internuts!

UPDATE: 23 July 2014.
I can't tell you how many times I'd updated my Windows software, rebooted, adjusted the power settings, and all the other tricks in the book, before finally stumbling across an all-new solution which really seems to work. I've been using an Android cellphone as a mobile wifi hotspot, and I'd started to suspect that it was the root of both my and my wife's laptops being kicked off the internet and then not letting them back-on. The solution is as weird as it is simple: just unplug the cellphone from the charger! Don't ask me why, but this results in perfectly stable wifi connections. Plug it in again, and bang ... symptoms immediately re-emerge. So it probably is some power-related issue (genius deduction there), but I don't think there's been a how-to written online that explains it. At least now there's a solution, and hopefully it helps you too.

On Marketing and MOOCs

If you've been following this blog for a while, you'll have noticed the recent updates to my blog. One of the reasons? I've been studying a free marketing course online through Coursera.

Yes, that's right - the blog now has a new tag-line (friendlier for Google), an About page (complete with e-mail subscription form), a cleaner design (hello white space) and a raft of other minor tweaks. Ok, so it's nothing that special, but it was just a natural side-effect of what's really a fascinating course: Introduction to Marketing

This happened to be my first Coursera course, but it won't be my last! I'm a third of the way through (this course is nine weeks long), and am finding it really fascinating. The lectures are all in video form, and the quality is good - presented by the University of Pennsylvania. Best of all? I took my first quiz last night, and scored 20/20 :D Hey hey ... if you can't brag just a little on your own blog, where can you????

Long story short, I recommend that you give the world of free education a spin. It turns out that there is a surprising range of quality courses available for free, a robust student interaction on the courses' dedicated online forums, certificates to track your achievements (and even list on your CV if you want), and in Coursera's case a biometrically-linked Signature Track they keep trying to sell you for $50 (but which isn't mandatory) which helps to prove that it really was you who took the course (opinion is still divided over whether this is of any value to employers).

My favourite quote about studying: "Reading is how humans install software into their brains." That's so true, and if it can benefit your job - and many of those courses can - then so much the better!

Back to the start, what do you think of the blog updates I've made?

South African Elections 2014: Reflections on 20 years of democracy

For my international readers who might not know, Wednesday (May 7) marks South Africa's next national elections. It's particularly poignant considering that it's 20 years after the country's first democratic elections in 1994, and this is going to be our fifth election since then.

What else makes this special? Well, it will be the first South African elections without Nelson Mandela alive - and being shamelessly used in electioneering by the ANC. It will be the first democratic election where South Africans have been quite as disillusioned by the ruling party ... name your controversy and we've had it recently. The president's Nkandla scandal, e-Tolling in Gauteng, our first rolling electricity blackouts in years only a recent memory, the unfortunate rise of Julius Malema as a political force ... you name it, we have it.

Then you have the 'everyday' South African headaches: rising unemployment, lowering education standards, continuing racial tensions (stoked by Black Economic Empowerment employment policies and various politicians' calls for nationalisation and increased distribution of white-owned assets), the constantly moving crime target, corruption scandals and general maladministration.

On the one hand everybody feels quite sure that the ANC won't do as well in the next election as they'll be hoping - at least by enough to again stave off their getting a sufficient Parliamentary majority to make unilateral changes to our Constitution. It is clear that more and more former ANC voters are finally getting disillusioned: 20 years IS an awful long time to hold onto flaky electioneering promises, and Nelson Mandela has passed on and therefore the insult to him won't be as bad if you vote against HIS party.

On the other hand, however, all of the above isn't exactly the great news that it really should be for South African opposition parties. Consider, for example, that the general consensus is that while the ANC will be losing voters, those voters aren't all going to be rushing en masse to South Africa's largest opposition party, the Democratic Alliance. Still plagued by being overly 'white' - and still headed up by an elderly white lady who every so often tries to dance on public stages like a black woman, with embarrassing results - the DA isn't the home that it should be for these black voters.

Rather, they're coalescing around other more radical parties, not afraid to make the very same unreal campaign promises the ANC made at the start - and still makes half-heartedly at least every four years. You know the types: more jobs (even the DA is harping on that tune ironically), more wealth (they're vague on how), and ... well, that's about it really. The most radical of these is the Economic Freedom Fighters (EFF), and their entire policy is summed up in their name. They're fighting to divide by zero.

For once white South African voters aren't sure whether they'd rather see black voters leave the ANC for the EFF, thereby strengthening the 'opposition' on paper, or stay within the ANC's docile grip! Making it even worse, there's talk about the DA and EFF even considering a partnership in South Africa's province of Gauteng, which would be a massive sell-out to voters for both parties but maybe a Good Thing in the long run (if the back-room squabbling could ever be sorted out). Bearing in mind that the EFF's leader is being tried for tax evasion, and you REALLY don't want a political alliance with the guy ... especially because he's widely quoted as saying he's not against white people, he just wants their hard-earned money equally distributed.

Welcome to South Africa, twenty years on. We're still here, barring what the naysayers thought as they fled overseas in 1994 and later years. Many of us have done relatively ok, others have done a little worse, and really nobody can say that life here is definitively worse or better than in any other country in the world. At least it's not North Korea, or Ukraine, or the Sudan. The only concern, however, is that we don't have any dream that following the elections on Wednesday, we're going to have our 'Obama' moment and everything will be amazing.

There is NO party I as an educated and middle-class South African voter want to vote for, and I'm not alone. Nobody out there is really representing ME or anybody like me (and even those poorer voters who are being 'represented' aren't necessarily being represented in their best interests). The politicians are either corrupt, ignorant or just plain out of touch - and sometimes a combination of the three. South Africa has issues to solve, and nobody to solve them ... yet we're all going to take a day off work (that's the positive side, isn't it?) and dutifully stand in a long queue to make a cross for a party we reckon will be the best of bad options. This isn't the first time, nor the last.

I AM South African. It's just a pity that after 20 years we're not so much Proudly South African any more as Sadly South African, or maybe - slightly more optimistically - Hopefully South African. Here's to the next 20 years, assuming we get that much.

Country Vibes, Anyone?

If you're anything like me, it's a rare joy discovering something beautiful in a world which is increasingly dominated by negative emotions. This blog, to a large extent, is my Happy Place, and you're invited. Here's my latest discovery, after I successfully googled the lyrics I heard and loved as a backing track in a TV series:

Edward Sharpe and the Magnetic Zeros - Home

On the topic of songs about 'home', here's a chance to share a Proudly South African song: Michael Lowman's Crayon Boxes:

Now all the best songs have a moment which links to our lives, and the one above has a cool True Story for me. One afternoon while collecting my wife from work, that song was playing on my car's radio. The very second my finger hovered over 'Home' on my GPS to select it, the lyrics burst in ... "All we need is love, and a place to call home." Poignant? Why yes.