The difference between customer-focused and customer-centric organizations has recently become one of the hottest business topics, and for a good reason. While the distinction between the two philosophies might seem very subtle if not non-existent, in reality it is that proverbial “devil in the details” kind of thing that can make or break a business. We live in the world that is driven by consumers, and a lot of business decisions are made with the assumption that the customer is always right and will “vote with their wallet” when they don’t get what they want or need. This means that one of these two philosophies will most likely be ingrained into the guiding principles of any company: they will be either customer-focused or customer-centric by design.
To recap, the key differences between being customer-focused and customer centric are:
- Customer-focused companies care about WANTS.
- Customer-centric companies care about NEEDS.
In a nutshell, the main distinction between the two is whether we focus on short-term customer satisfaction and “fast cash” or on long-term commitment to a customer’s needs. This approach translates to almost every area of business, from product development to bookkeeping to customer service. What we wanted to discuss today is how customer-centric or customer-focused philosophy translates into working with key accounts, and how leveraging both of them can help drive success as key account managers.
A journey from "want" to "need"
First of all, there’s nothing wrong with listening to what our customer, especially our key customer, wants. Wants and needs don’t have to be mutually exclusive, as there is always a reason behind them. In fact, “what is it that you want” is one of the first questions we should ask when we speak with our customers. As Amy Slater puts it, “ask questions, and don’t worry about the outcome. Ask…really, just ask. [...] We all have an agenda. If you ask, I will tell you mine.”
By asking our customer what it is that they want, we can accomplish a few valuable things:
- Earn trust: We shift the focus to the customer, and thus confirm that we value them and their expertise. We show that we care as opposed to just trying to get into their wallets.
- Initiate introspection: All too often people are tempted to look for a “silver bullet,” a solution to all of their problems - only they haven’t thought about what those problems are yet. Asking them about what they want might catch them unaware, but it will also set the introspective analysis gears in motion.
- Learn about their current situation: As we try to figure out why they want what they just said they wanted, we dig deeper and find out what led them to come up with this request in the first place.
The difference between customer-focused and customer-centric philosophy here is not in how we phrase this question, but in why we decided to ask it to begin with.
Customer-focused teams are apt to find out what the customer wants, so they are able to go back to their developers / factory / consultants and create just the thing their customer asked for. Unfortunately, blindly scratching a customer's itch is not a wise move, because soon after getting what they asked for they might realize that the results are not what they expected, and ask for something completely different. And before we know it, we will be buried under a pile of such requests...
Customer-centric teams have a different reasoning. When their customer requests a service or feature, they aim to find out why it is that they want it. After they locate the actual reason, they will try and find a remedy for the very need that drove the request, not just put a band-aid on it.
When we wrote about four different customer relationship stages, we discussed how important alignment of vision and long-term goals becomes when the customer and the vendor become interconnected. If we consider this statement in light of customer-centric or customer-focused philosophy, we will see that long-term goals are inseparable from fundamental needs, while wants are often connected to short-term, non-strategic initiatives. Yet often there is an important link there that should not be missed: figuring out why they WANT something is the most direct way to get to the root cause and locate an actual NEED.
Your wish is (not necessarily) my command
For the customer, understanding what those needs are can be really hard because it would require an unbiased analysis of this company’s current situation. This kind of introspection might prove difficult for any organization or person, because, according to multiple studies, self-assessment can hardly ever be objective and impartial, especially if one lacks methodology and there is nobody around to coach and help through the process. Luckily, at the interconnected stage of customer / vendor relationship there is a solution.
Customer-focused account managers will spend most of their time surveying their customers for what they would like to see in their next offering, and liaising with the rest of their company to make it happen. If not, the customer might become disappointed and eventually leave. In this case we risk ending up chasing our own tail, only thinking about pleasing this key account and losing sight of our (and possibly their!) goals and resources.
On the other hand, as customer-centric key account managers, we don’t ask the “what is it that you want” question just to gather feedback and bring it back to our product development team. We go several layers deeper. We want to know why, and we want to help them understand why. In this quest, the core reason might surface that has little to do with the initial wish. For example, we can ask them:
- Is it some immediate pain point you are currently experiencing in your work that makes you want this product / service? What is it?
- How critical or urgent is this desire? Is it some emergency we’ll need to patch up before looking any further, or can we dig into the root of this?
- Where does this want come from? Do you want XYZ because you saw your competitors do / have it? Or was it an ad, a recommendation from a friend, or our competitor knocking on your door? Why do you believe that XYZ is a right fit for you?
- What perfect outcome do you envision after XYZ solution is implemented? Are there any alternative ways we can think of together that will get you this result?
Most importantly though, we should ask them this:
- How does this align with our overarching goal and vision that our two organizations share?
This is the ultimate key to unlock the right course of action whenever a customer asks an account manager whether they can have this feature added or that thing done for them. It definitely helps having a platform like Synap where these plans and goals are stored so that we can refer back to what has been agreed upon with this key account over time.
If we have a point of reference that we can check back on and measure our efforts against, it will ensure that not only do we keep our eyes on the prize, but also that we help our customer stay focused on the end goal despite distractions. Constantly checking in and making sure our values and vision are aligned with our customer’s will help us achieve strategic synergy as opposed to being pulled in random directions that are momentary and detract from the long-term goal.
Reconciling customer-centric and customer-focused
Key account management is a strategic endeavor that requires 360 degree vision. It’s also a long game, so it makes sense that we treat it as such. Approaching it from a customer-focused perspective and trying to scratch every itch and grant every (somewhat grant-able) wish a strategic customer might have is a sure way to spread ourselves thin and get torn between several directions that we never wanted to go.
That said, there are times when a customer-focused approach is necessary: like putting out a figurative fire when the customer discovered a flaw in your product, or prioritizing a certain project or feature because it is absolutely crucial for our key account. In a state of emergency (like burning customer support issues) there is no time for lengthy analysis or practicing Socratic maieutics with the customer - we need to act instantly to remedy the situation, often following our customer’s lead.
However, in non-emergency situations, strategic account management requires a different, much deeper approach. We aim to analyze and understand every aspect of our key customer’s business that is even remotely relevant to what we do together. We regularly check in with them to make sure we are aligned in our goals, vision and the direction our partnership is going. We nurture our key accounts and come up with unexpected ways to bring them additional non-monetary value. We build our partnership on trust and openness, and ask a lot of “why” questions to get to the root of every wish or issue. In other words, we drive our relationships with strategic accounts by being deliberately customer-centric.