Thursday, February 11, 2010

How Do Customers Want to be Treated By Their Suppliers?

I write in this blog about creating a customer-centric company.  I write to an intended audience of suppliers. My point of view is from the inside of a supplier looking out to customers.  Is this the perspective that is needed understand managing a customer-focused organization?
I was inspired when I watched the below short from a London Business School professor.  Julian Birkinshaw @ LBS on Innovative Management Design Flaws  He correctly states that the field of managements is taught from the perspective of managers.  What should managers to do influence, to enforce, to inspire, to guide employees?  These are the questions for which answers are posed inside MBA classrooms and in large companies.    
Birkinshaw goes on to identify this as a "design flaw", suggesting that this paradigm should be flipped on its head.  Take the employee's point of view.  In what way would the employee prefer to be commanded, to be controlled?
By parallel reasoning, the question for leading an organization toward success with customers may be best answered by turning the compass.  How does the customer want to be sold to, to receive goods, to be billed, to learn about your offering?
This mindset means being open to embracing the customer experience by looking inward. Instead of starting with what you can do to for the customer, begin with the needs and best interests of customers in mind.  Like employees to managers, customers are stakeholders in the success of your company's success.   You must serve them to enable their high performance, which in turn propels you to your desired outcome.

Tuesday, February 2, 2010

Customer Intimacy 2.0 @ Amazon.com – How Leading New Economy Businesses Handle Customer Intimacy

Amazon.com is a business driven towards scale. Since its inception as the world’s biggest book store, Amazon leveraged its size to drive breadth and, above all, low cost for its consumers. While Apple (as discussed previously) pursues the classic differentiation strategy, Amazon is a classic low-cost player.

Amazon's traditional book selling business has three touch points with customers. 
  1. The first is virtual, where folks surf around in their web browsers for inventory. 
  2. The second interaction is at the checkout transaction or “shopping cart”; 
  3. The third is upon opening the box that a customer has ordered. 
Is there any room for customer intimacy?  Upon closer look, I see the virtual realm chocked-full of chances to entertain, listen and react to customers. Amazon thoroughly tracks and customizes the user experience. This is a tremendous capability for the business and adds huge values to customers as well.

By comparison, how often do brick & mortar retailers undertake customer intimacy in the three user links mentioned above (searching for product, checkout and delivery)? Rummaging around a store for products is likely to be constrained by the physical location of inventory. Obviously not true on amazon.com. Further, could most retailers present you with a basket of recommended items right when you walk in? Amazon’s recommended list does this. 

At checkout, Amazon has what every business would love to have in its CRM. At this stage, they’ve remembered your payment preference and where you’ve received products in the past. Even the delivery is a tailored experience for the customer. One-touch simplicity allows customers to avoid having to lug home a huge box. Lastly, the breadth of products certainly reflects an aspect of customer intimacy. In this regard, the user has an almost limitless opportunity to purchase a wide variety of goods in one place. 

In all, customer intimacy isn’t happening the way it used to. New business models and digitization of interactions offer new ways for businesses to mesh with customers. The increasing complexity is daunting. Leaders like Amazon and Apple have untangled the complexity and are controlling it to their advantage.

Monday, February 1, 2010

Customer Intimacy 2.0 @ Apple – How Leading New Economy Businesses Handle Customer Intimacy

Is Apple’s strategy based on listening to its customers? How about that of Amazon.com? Neither of these companies is traditionally seen as being customer intimate. There aren’t any sales reps out there developing deep relationships with customers, but there are other ways to be customer intimate. Both Apple and Amazon strive to maximize their understanding of how customers use their products. They’ve built big, loyal customer bases.

Apple is built on the design instincts of Steve Jobs, and the company strives to have the easiest to use, most elegant products wherever it plays. In the traditional sense of strategy, Apple is a differentiator. Look at the company’s envoys into retail however, which is a customer-intimacy-enabling play.

Smartly, the Apple stores align with the traditional strategy of the company: the stores are just as differentiated as the product. Elegance is the best word to describe both the iPod and the company’s flagship Manhattan store. 

Apple’s stores serve two purposes for customer intimacy. The first is simply a control issue, wherein a competitive advantage stems from access to point of sale information in-house and oversight of the people/place that customers interact with salespeople. Second, the stores’ Genius Bars offers Apple a chance for personal connection. Customers can get their products fixed, learn about the technology or gain customizations that are tailored for what they want to get done with the products. The Apple store offers a retail angle on intimacy, and I suspect that the stores allow Apple to learn a great deal about how customers are using its products.

Further, Apple’s increasing ownership of the functionality on its iPhone platform. Playing the game of its rival, Apple is rumored to be replacing Google’s mapping features for mobile. Collecting the data directly from users in this key function offers greater insights into customer behavior.

In all, customer intimacy isn’t happening the way it used to.  Apple has a unique strategy here for getting close to customers, providing value and extracting insights for upcoming generations of products.