Learning to be buyer-centric
Designing value around people
It's hard to imagine a mantra more powerful in modern commercial circles than 'identify and meet customer needs'. It's also hard to imagine one more mesmerising in its delusions. To 'get' buyer-centricity we need to rise above its amazing mind-bending qualities.
First, let's appreciate the power and subtlety of this mantra.
* It has infinite potential and therefore appears complete; it means we have to search no further for answers. Human needs and wants have no bounds, so at first glance the mantra leaves us nothing else to consider. This effect is subtle but hugely important: it shuts down curiosity. We no longer have to worry about what we are doing, only how well we are doing it.
* It's both a call to action (what to do) and a guide to action (how to do it). To meet customer needs we first have to identify these needs, which means we need to focus on customers, understand them and gain insight into them. This is a clear agenda for work and progress.
* It is a moral justification. What better a win-win is there than prospering by meeting customer needs? Everybody benefits; everybody is striving to serve the customer better. Success is a reward for doing the right thing.
Put these three qualities together - completeness, practicality and moral purpose - and you have a recipe for ideological triumph.
Now let's consider the assumptions the mantra smuggles in along the way. All of them are perfect expressions of an industrial age mindset.
* A corporate perspective. As soon as you utter the mantra 'identify and meet customer needs' you leave the world of the individual and cross the fence to the other side. You are no longer looking at the world through the eyes of an individual. You are looking at 'customers' and potential customers through the eyes of a corporation. You have externalised yourself, becoming an outsider 'focusing' on an object of interest (You simply cannot 'focus' on yourself from the inside. Try it). That's why, behind its ritual exhortations to 'get close' to customers, mantra is in fact, both the expression and a cause of deep estrangement. Marketers' quest for 'closeness' to their customers is just a symptom of the huge and irrevocable distance that has been created.
* A control perspective. The mantra 'identify and meet customer needs' unwittingly sucks you into a deep and almost invisible assumption. It is the corporation doing all the identifying and meeting: the corporation is doing everything; the customer is doing nothing. The corporation is active; the customer passive. The corporation is the subject; the customer the object. The almost inevitable baggage of the 'identify and meet customer needs' mantra is that the individual is powerless and passive, ie 'needy'.
* The supply perspective. As soon as you utter the mantra 'identify and meet customer needs' you assume a massive and insurmountable division of labour between customers and companies. Needs are met by producers who produce. Value resides only in the processes of supply. All the consumer has to do is consume.
* Corporate narcissism and the assumption of 'customer capture'. By definition, a customer is someone who buys things from us. The word 'customer' assumes a pre-existing, one-to-one relationship between the company and its customer. The customer agenda is only about the value provided by that particular company - not the value needed by the customer. At the same time, it defines customer value in terms of what that one particular company produce.
This last assumption generates a huge blind spot in the world of marketing. The real, underlying reason for the mantra is not because marketers want to meet peoples' needs, but because they want to make money selling stuff. The real purpose of the mantra is to ensure the customer buys this particular marketer's particular product or service.
That's why, in reality, most day-to-day activities of most marketers do not revolve around 'identifying and meeting needs'. They revolve around something entirely different: trying to influence customers and potential customers to choose their particular offerings. Here, marketing quickly flips over from 'identifying and meeting customer needs' to 'changing customer attitudes and behaviours'... for the company's benefit. It's not about meeting customer needs, but meeting the needs of the corporation.
This leaves one set of customer needs completely sidelined and ignored: the need to 'make the right choice for me and my circumstances'. No marketer is interested in meeting this need. It might lead the individuals to choose an alternative supplier.
To see just how limiting and limited the mantra really is, consider an alternative. 'A buyer-centric business or service helps individuals make and implement decisions better.'
Making better decisions is the fountainhead of all value, because it necessarily leads us to the right product or service. It also takes us way beyond all those industrial age assumptions. It looks out at the world from the point of view of the individual. It's about better use of information, as distinct from the supply of products or services. It's about the individual being active and in control, not the corporation. It's about the individual's purposes being placed centre stage.
Also, in the process of making better decisions, we as individuals cannot help but identify and articulate needs - thereby overcoming the estrangement generated by the marketing mantra.
"Helping individuals make and implement decisions better" isn't a perfect description of what Right Side Up businesses and services do, but it's a start. Can you help me improve on it?
When the UK market research company CCB FastMap asked consumers which method they most wanted companies to use when communicating with them - e-mail, phone, letter and so on - 63 per cent ticked the box that said "Not at all".
Even where consumers have an existing relationship with a company, 23 per cent prefer not to have marketing communications from it. The rate rises above 50 per cent for some large utilities and banks.
Consumers are also increasingly unwilling to divulge data. The same research found that 86 per cent of consumers routinely tick the third party opt-out box when providing personal information. "People have become less happy about revealing information and especially allowing third parties to share it," says David Cole, managing director of CCB FastMap.
This was not what customer relationship management was supposed to deliver when it was first touted in the early 1990s. The more data companies could gather about their customers, it was argued, the deeper the insights they would generate. This would lead to longer, more profitable relationships.
Instead, many companies have found themselves stuck between a rock and a hard place. On the one hand, most organisations' transactions with their customers are too limited for them to get an accurate picture of their motivations and any data they gather quickly goes out of date. On the other hand, subsequent attempts to fill these holes by gathering more data simply intensify concerns over intrusion.
A research project in vendor relationship management at Harvard University Law School's Berkman Center for Internet and Society has suggested a way through the impasse. The core idea of vendor relationship management (VRM) is simple: the more empowered individuals are when it comes to managing and using personal data - including the ability to manage their relationships with vendors - the greater the benefits to both sides.
"In the future, customers will come armed with many tools they don't have now," says Doc Searls, co-ordinator of Project VRM. "They will have personal data stores that help them to maintain and control much more data and to share much more data - but on their terms."
As individuals increasingly use digital data to organise and manage their lives, they will demand software tools and services to help them gather, store, protect, analyse and use this data efficiently.
Over time, a personal data store will create a rich picture of an individual's life. So instead of many organisations each trying to construct their own restricted view of their customers, they could negotiate permission to access relevant parts of individuals' data stores.
Meanwhile, new technologies such as infocards (which create a secure "pipeline" for two parties that want to share information online) make it possible for customers to "co-manage" customer databases. Addresses and contact details can be updated in advance, so that organisations do not discover that the change has taken place too late.
Together, personal data stores and volunteered personal information could strip huge amounts of waste out of marketing by letting organisations communicate with the right customers about the right things at the right time.
The price of these benefits, however, is that customers will have the power to deny organisations access to personal data. "VRM turns the relationship between organisations and customers round," says Mr Searls.
Project VRM is instigating research projects at Harvard and other universities to test its hypotheses. It is also encouraging pilots such as the UK-based social enterprise Mydex, which will enable individuals to volunteer information such as "I am moving home" or "I am interested in receiving information about X".
Vendor relationship management is also stirring interest among mainstream technology suppliers.
The Liberty Alliance is a global body that establishes policy and technical standards for digital identity management. Its members include BT, Intel, Oracle, Novell and Sun.
It is setting up a working group to create and integrate policies for the sharing of volunteered personal information.
Brett McDowell, executive director of Liberty Alliance, expects a high percentage of member companies to seek certification for the VPI standard. "If these programmes are put in place, there is no way this won't change the way markets work," he says.
Alan Mitchell is a member of the Project VRM steering committee
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