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Of Course, I Know Who My Customer Is! … I think?

By Guillermo Jasso - Amazon Robotics

Senior Business Operations

STORY INLINE POST

Of Course, I Know Who My Customer Is! … I think?

Connectivity: Both Opportunity and Pain Point

Everyone today claims to be customer-centric; the “customer” is at the middle of most companies’ mission, vision, values or in all of these. But, down in the trenches, where the real deal takes place, does everyone know who is “the customer” they are serving?

Today’s enterprises and businesses are complex multidimensional matrices that look more and more like a neural network than simple org charts, and understanding and defining your customer within a large organization is paramount. It is the foundation upon which successful product development and customer services are built, and the key to ensuring the right level of accountability. However, this seemingly straightforward task can prove to be a labyrinthine challenge for many organizations, with some even blinded to the actual problem.

This article delves into the complexities of identifying and prioritizing customers within a large organization, drawing on insights from renowned authors and experts in the field of business and marketing.

The Elusive Nature of the Customer

Peter F. Drucker's Perspective:

Renowned management guru Peter F. Drucker, in his book, The Practice of Management, underscores the ambiguity in customer identification. He emphasizes that customers are not a monolithic entity but are diverse, with varying needs and preferences. Drucker's insights highlight the first challenge: the sheer diversity of customers within a large organization.

Segmenting Customers:

To tackle this diversity, organizations often resort to customer segmentation and classification, a distinction must be made between them such as: Consumer – Ultimate buyer of the product or service; Stakeholder – Inside customer with influence on funding and scope; and Internal Customers – Intermediate teams that receive and provide deliverables inside the production process.

Prioritizing Segments:

In large organizations, not all customer segments are equally valuable and even within these segments, there are different levels of impact depending on the team’s scope and position on the process. The question is not what the teams “Could do,” but what they “Should do” based on the always constrained resources, value proposition and objectives to achieve as an enterprise.

The Dynamics of Customer-Centricity

Theodore Levitt's Insights:

Theodore Levitt's seminal work, Marketing Myopia, argues that organizations often fall into the trap of being product-centric rather than customer-centric. This shift in perspective requires not only understanding who your customers are but also what they truly value. Organizations must address the "So What?" question — why should customers choose their products or services.

Customer Value Proposition:

To answer the "So What?" question, Michael Lanning and Edward Michaels, in "Delivering Profitable Value," emphasize the importance of a well-defined customer value proposition (CVP). This involves crafting a clear and compelling message about how an organization's offerings solve customers' problems or meet their needs. Defining the CVP is crucial, but it demands an in-depth understanding of who your customers are and what they truly want.

Customer-Centric Culture:

Achieving customer-centricity within a large organization is not solely a marketing task. Employees at all levels must be customer-focused, understanding the customer's perspective and priorities. This sounds simple enough but requires a deep understanding of customer Jobs, Gains and Pains, they may say why they want but not necessarily know what they need.

Technology and Data Challenges

Philip Kotler's Vision:

In Kotler on Marketing, Philip Kotler draws attention to the influence of technology on customer identification. With the advent of big data and advanced analytics, organizations have access to a wealth of information about their customers. However, this abundance of data creates its own set of challenges.

Data Quality and Privacy:

Authors like Timo Elliott and Bill Inmon, in "Mastering Data Management," highlight the importance of maintaining data quality, ensuring accuracy, and respecting customer privacy. Mishandling data can not only lead to incorrect customer profiling but also legal and ethical issues.

Leveraging Technology:

In their book, Competing on Analytics, Thomas H. Davenport and Jeanne G. Harris argue that organizations must effectively leverage technology to extract valuable insights from the data. The challenge is not only collecting data but also making it actionable for decision-makers.

Even without malicious intent, with the right set of charts and percentages, data can show what we want it to show, hence, organizations have to be particularly careful on the directions drawn from it.

In conclusion, defining who your customer is within a large organization is a multifaceted endeavor. The diversity of customers, the dynamics of customer-centricity, and the technology and data challenges are just a few of the complexities organizations face. Prioritizing customers requires considering factors like impact, value proposition and value creation, alignment to organizational goals and potential for growth. The trap of identifying one’s customer as only the final consumer, produces holes in the process and unassigned accountability, neglecting even stakeholders. Organization leaders must emphasize customer identification throughout their teams, assign specific responsibilities and ensure the processes are mapped entirely to avoid “dropping the ball” in the middle.