The Rise of the Customer Centric Firm
Strategies for putting your customers front and center
Which of these companies would you say is the most customer-centric: Starbucks or Apple? The answer, according to the latest issue of IESE Insight magazine, is neither.
For all their customer-friendly services and gadgets, these two companies are "leaving huge amounts of money on the table by failing to take advantage of" some key principles of customer centricity, argues Peter Fader, one of the authors writing in the cover story on "The Rise of the Customer Centric Firm."
IESE Prof. Julián Villanueva, who guest edited this issue, writes in his article that companies that don’t pay attention to customer-centric issues, such as estimating the value of what their customers are worth, risk making some bad choices.
"They may spend too much on acquiring customers who are ultimately unprofitable or who do not remain loyal to the brand. They may waste money on activities that have little or no influence on consumer behavior or buying decisions. They focus exclusively on overall revenue, without considering the impact of customer acquisition and retention on the bottom line."
This is especially important as more and more people turn to the Internet to purchase goods and services. In light of the growing role of technology in service delivery, in another article A. Parasuraman revisits the well-known SERVQUAL scale 30 years after he codeveloped it, and provides a complementary framework to give firms’ service efforts much-needed direction and focus in this age of big data.
As well as reconceptualizing our customer management models, Tarun Khanna and Krishna Palepu stress the need to change our definition of what makes a market "emerging."
IESE’s Josep Tàpies and Lucía Ceja highlight the importance of psychological ownership, based on their studies of family businesses. Strong emotional ties, they say, boost productivity and performance.
This has certainly been the case for AJE’s Carlos Añaños, who tells IESE Prof. J.L. Nueno that the global growth of his family-run beverage business is thanks to this sense of belonging to a cohesive team.
IESE Insight is a quarterly research-based magazine, published in separate English and Spanish editions. Its premium content is linked to articles from the IESE Insight knowledge portal, which contains research and teaching materials, opinion articles, business indices, audiovisual materials and an extensive database of more than 20,000 scholarly references.
Go to the IESE Insight Review website.