Are customers overrated?

Customer is king?

From time to time, we are reminded that the customer is king. Some of us may have graduated from induction programmes designed to etch this into the neuronic landscape of our brains. There is strong economic logic underpinning this assertion; customers pay our salaries and thus fund our lifestyles / keep a roof over our heads.

There are exceptions to this of course.

If someone owns the only pub or food store within a two hundred mile radius, then they can call the shots in respect of the relationship.

But for most of us, that is not an issue. The fact that we have choices in this respect creates competition between providers, which generally creates an upward pressure on the experience we receive.

Your people create experiences

But the world is changing. In the industrial era, the customer bought into the corporate brand. The people that worked for the company were generally faceless cogs. In some cases, we specifically didn’t want to know anything about the workers, particularly when we were buying cheap apparel.

We would rather not have it brought to our attention that we are funding an economic prison populated with underage labour.

But as the economy has transitioned from products to services, the disposition of the workers has become more important. Surly front-of-house staff can have a curdling effect on the customer experience. As more of the back office processes become automated, it is increasingly likely that all staff will become customer-focused.

These workers might not necessarily be customer-facing because of a growing preference for a device interface. But they will still impact the experience by virtue of their role in such activities as:

• App development.
• Service ideation.
• Service innovation.
• Service implementation.
• Service management innovation.

Accept no substitutes

There are of course certain industries where the engagement experience is strongly correlated to the worker. The sports and entertainment industry come to mind.

We pay a premium to specifically witness Usain Bolt have a crack at a world record, or to have Ed Sheeran mine your memories with his evocative lyrics.

We have paid for a specific individual and not to see someone who is simply faster than us or who is a competent singer.

In general, where the service leads to the growth of a relationship, say with your hairdresser, your loyalty moves away from the salon and towards the person who handles your hair. Even where the individual is not directly involved in the experience delivery, you might well choose a product/service based on the fact that a certain renowned individual was responsible for its design. This works well for artists who as a result are no longer a bottleneck in respect of meeting the demands of the market.

** An executive’s guide to data **

Hyperconnectivity-fickleness convergence

The pace of change was also much gentler in the industrial era. Once your organisation fell upon a market-pleasing offering, it could enjoy the associated profitability for years, if not decades. But as we enter the digital era, hyper connectivity and increased customer fickleness requires us to up the innovation clock speed.

So, innovation becomes less of an event prompted by a downward turn in an organisation’s fortunes, and more of a continuous state.

Innovation, at least for the next few years, is done best when we put the creative capabilities of people to work. Those who can apply their cognitive capacity to creating differentiated customer experiences that either command a high margin, or capture a large chunk of market, or both will be very much in demand. This won’t simply be a case of finding, acquiring and retaining a modern day Leonardo Da Vinci. You will need to create and feed an army of Da Vincis along with a workplace that turns their collective cognitive capacity into a market-slaying super-consciousness.

New model army

Most importantly this is an army of individuals. So, any attempt to make them all look and tweet like Leonardo would be a mistake. In the digital age, the corporate brand is the sum of the brands of its artists. This is inconvenient from a marketing and PR perspective. If you visit social media, you can witness today how some of the world’s most talent-rich organisations insist on denaturing their people, resulting in bland tweets that could literally have been sent by any bright person.

The market is increasingly buying (competent) humans.

So are they?

The question remains, ‘are customers overrated?’. Possibly we need to look at this on a market by market basis, but ultimately it boils down to supply and demand. Is there enough talent to generate enough cognitive power to create differentiated value to feed the ever changing wants and needs of the market?

Given that most people in the developed world have been bred to be ‘factory workers’, whether that be in a traditional factory or a furnished one (both being process-driven operations), there is a dire shortage of the kind of talent needed to fuel the digital age economy.

McKinsey raised this as an issue several decades back. Though back then the definition of talent probably revolved around being process-oriented and bright rather than innovative. Back then we had R&D (Research and Development) functions for such people. Today R&D is not a department, it is the primary business activity.

So, if we assume that buyers are increasingly attracted to talented individuals and that there is not enough of these individuals to go around, then the challenge for businesses is less about finding and retaining clients and more about acquiring and retaining talent.

For that reason, I believe that in the digital age, business leaders must prioritise talent management over customer management.

Only those that fundamentally believe that the customer is king will take this radical step.

No

In conclusion, customers are not overrated. The ‘customer is king’ aphorism lives on. But ironically, we need to spend less executive energy on the customer, in order to serve them better.

A measure of whether an organisation gets this will be the extent to which talent management is represented within the senior executive team.