The Compliant Customer

Customer-centricity may sound like a good idea. But a new breed of companies focuses instead on getting the customer to comply with a company’s systems.

Image courtesy of Flickr user Pixelsior.

In academic marketing literature, companies are often advised to adopt an approach of “customer-centricity” that places an emphasis on customers’ needs and wants. What’s more, much of what has traditionally been written about market and marketing research assumes that interactions with dissatisfied customers and feedback obtained from them are valuable forms of research. We are told that complainers provide valuable market intelligence to companies for free. But what if, in the Internet age, companies have more efficient ways of gaining insights into customers’ wants and needs than personal interactions with dissatisfied customers?

Today, some innovative businesses are practicing what Alex J. Warlow and I have defined as a “customer compliance business model.” Such companies, which we call CCBMs, have used tools such as the Internet and call-center technologies extensively — and have in the process offered a new approach to handling customer complaints, service recovery, fulfillment strategies and market research. CCBMs — which can be found in a range of industries, such as travel, e-retailing and financial services — have grown their market share and expanded their markets by offering good value and a high level of service at considerably lower prices.

In particular, these companies have often introduced highly innovative service failure recovery and complaint management practices. We argue that CCBMs have replaced the costly “customer-centricity” thinking that is frequently recommended in academic marketing literature with “customer compliance” business models, where customers are expected to comply with a company’s systems, thereby allowing the company to reduce costs and pass on the savings to their customers. In return for compliance with company systems — such as following a company’s automated procedure for ordering via its Web site or interacting with voice recognition software during a phone call — customers are rewarded with low prices and good service. What’s more, many customers appear to have become “compliant” and understand CCBM systems well.

While some experts have advised that customer complaints offer valuable information to companies, the intelligence gathering and analysis value of complaints may be less useful to CCBMs.

Read the Full Article:

Sign in, buy as a PDF or create an account.