In his book, Customer Centricity: What It Is, What It Isn’t, and Why It Matters, Peter Fader, Professor of Marketing at the Wharton School of the University of Pennsylvania, defines customer centricity as “a strategy to fundamentally align a company’s products and services with the wants and needs of its most valuable customers.”

One of the areas of customer centricity that Fader explores is customer development. By matching products and services with the wants and needs of their most valuable (focal) customers, customer-centric companies can increase repurchase rates, up-sell or cross-sell a variety of different products/services to existing customers, and realize price premiums—as loyal customers tend to be less price-sensitive.

In his article, The Skinny on “Fattening Up” Customers, Fader identifies Wells Fargo as an example of a company “whose relatively robust success through the recession seems due…to its customer development efforts. The average Wells Fargo household has over five different bank products, roughly twice the industry average, while about 20% have an impressive eight or more products from the bank. And Wells Fargo credits cross-selling with lowering its selling and advertising costs, given that it’s cheaper to target existing customers than new customers.”

Wells Fargo’s success with cross-selling to existing customers reminded me of an experience I had several years ago with the Denver-area furniture store where my wife and I had spent thousands of dollars furnishing our new home in 2000.

The arrival of our first three children between 2001 and 2004 prompted the need for additional chairs for our kitchen table. So, in early 2005 (five years after originally purchasing a kitchen table and four chairs with custom-upholstery depicting the French countryside), I phoned the store to order two more matching chairs.

After placing the order, I asked to be transferred to the store manager. When he came on the line, I introduced myself and mentioned the order I’d just placed and what prompted it. I then inquired as to whether or not his sales staff ever followed up with young couples who bought tables (with expansion leafs) with only four chairs after some period of time to determine whether or not their needs had changed and, if so, how the store might be able to serve those customers now.

I don’t recall the specifics of our conversation but I do remember that the store manager seemed preoccupied and dismissive during our call. It’s likely that he and his sales staff were busy servicing the prospective customers on the sales floor, reviewing sales forecasts, and planning the next direct marketing or advertising campaign that would ensure a steady stream of foot traffic in the showroom.

While customer acquisition is vital for growth, all too often companies squander opportunities to increase their market share amongst existing customers—what Fader refers to as “share of wallet.”

What if the furniture store had developed a simple customer relationship management (CRM) database that captured the formal demographics of its customers together with casual insights gleaned by the salespeople who had spent hours with customers coordinating furniture, selecting fabric, securing financing, etc.? And what if salespeople accessed this information afterward to reconnect with existing customers and make informed product recommendations to them?

No doubt this would have required an investment of time and money. Based on the robust economy in 2005, creating a CRM database (in order to gather information and better understand the unique characteristics and expected value of its focal customers) may not have seemed like the best use of the store’s resources. Although, as the Wells Fargo example illustrates, using customer data to capitalize on cross-selling opportunities has proven to be particularly effective in recent recessionary years.

Now consider your situation. What can you do today to develop your own customer base?

(Don’t wait. The furniture store waited and eventually closed in 2010 after being in business for 45 years.)

Have you ever been treated to a fine dining experience where the host hands you the wine list saying, “Why don’t you select the wine. Remember, it’s my treat.”

As you scan the wine list, a bottle of Far Niente Cabernet Sauvignon catches your eye but at $200 a bottle, you continue to scan down the list until you find a wine that’s priced more modestly. After all, you don’t want to appear to be taking advantage of your host’s generosity.

When the wine arrives, your host and other dinner guests will no doubt compliment your selection but you’ll be thinking of that Far Niente as you prepare to taste your second (or seventh…) choice.

Last week, I received a holiday catalogue from Tiffany & Co. The catalogue, as you might expect, contained many images of fashionable models wearing attractive Tiffany & Co. jewelry and accessories.

But what you might not expect is that the catalogue contained no prices. Instead, Tiffany & Co. included a separate, detached price list enabling ladies to peruse the catalogue and select their preferred merchandise—without censoring their favorite pieces due to price.

This also allows buyers to conceal the prices paid for gifts—providing discretion while ensuring their sweetheart doesn’t have to settle for her second (or seventh…) choice. Brilliant.

In his book, Customer Centricity: What It Is, What It Isn’t, and Why It Matters, Peter Fader, Professor of Marketing at the Wharton School of the University of Pennsylvania, defines customer centricity as “a strategy to fundamentally align a company’s products and services with the wants and needs of its most valuable customers.”

While reading the book, I was reminded of the Aristotle quote: “There is nothing so unequal as the equal treatment of unequals.”

This is a slippery slope in customer service because, when taken to extremes, it appears to be prejudicial service, where one customer is prematurely judged as less valuable or important than another customer. (Think about the scene in Pretty Woman when Vivian, played by Julia Roberts, was snubbed by saleswomen based on her immodest appearance while shopping at an upscale boutique along Rodeo Drive.) And, of course, this is wrong.

That said, there are many who will say that all customers should be treated equally. I’d like to make a distinction here between the terms equally and equity:

• Equally means having the same value as another.
• Equity means the state, quality, or ideal of being just, impartial, and fair.

Equally means 50:50. Equity might mean 60:40 or some other unequal ratio—based on what each party needs and deserves.

I have four children. The three oldest receive allowance but their allowance is not equal. The financial needs of my 5^th Grader differ from those of his 1^st Grade sister and their individual allowances reflect that difference. Their allowance is not equal but it is equitable.

In the same way, customers who have flown 100,000 miles with an airline and achieved elite status in its frequent flyer program deserve to board the airplane ahead of those passengers who fly less often. And retail customers with a history of significant spending deserve to be notified of sales before the general public in order to preview the best selection of sale merchandise. These perks may not be spread equally among the customer base but they are distributed equitably.

I agree with Fader’s assertion that “the customer” (a generic term used to represent every customer in a company’s customer base) does not exist because every customer is different. According to Fader, “You must not only accept but celebrate the idea of customer heterogeneity (or uniqueness). By putting forth the effort to better understand the habits, tendencies, and value of each and every one of your customers, you can build better, stronger, and more profitable companies.”

So gather as much intelligence as you can about your company’s very best customers and then look for opportunities to recognize and delight them.

Doing so will reinforce their personal importance (not their importance as people—that’s equality—but their importance as customers) while recognizing the value they bring to the business through personal spending, loyalty and referrals.

I welcome all questions, comments, bouquets and brickbats.

This post is the eighth in a series that will identify 10 different customer service obstacles that have emerged from my analysis of customer satisfaction data. Maybe you will have encountered one or more of these obstacles in your own business? The eighth obstacle is a lack of confidence in the service provider.

Can you think of a time when two or more employees were available to serve you and you made a conscious choice to work with one employee over another? What led to that decision? Was it his appearance? Was he smiling and attentive?

Chances are that your selection was influenced by the confidence you had in that particular employee’s ability to accurately answer your question, efficiently complete a transaction, or capably respond to some other need.

Whether face-to-face or over the telephone, customers are adept at detecting clues that either reinforce or undermine the confidence they have in an employee and the brand he or she represents.

Recently, I emailed a printing job to my local OfficeMax. In the message, I included a request to be contacted regarding pricing and an estimated completion time.

A couple of hours later, since I had yet to hear back, I phoned the store to follow up:

Me: “Hello. I’m just calling to follow up on a job that I emailed to your print services department. Is someone from that area available?”

Employee: “No. They’ve all left for the day.” (Avoid saying “no” to customers. An alternative might have been, “I’m sorry. Our print services staff has left for the day. Is there something I may be able to help you with?”)

Immediate access to current information bolsters confidence. Many businesses could learn from the example of Apple Stores and cross-utilize staff. There’s no reason why a store employee cannot access the print services department’s computer and determine a job’s status in the four hours that remain between the closing of print services and the closing of the store. In fact, store hours don’t even need to be a factor. FedEx Office offers its customers 24-hour online access to print job submission, proofing, payment, and shipping/delivery with real-time status updates.

Me: “What time will someone from print services be in tomorrow morning?”

Employee: “Someone is usually in at 9:00 am. Why don’t you call back then?” (“Usually” does not instill confidence and, if it can be avoided, customers should not be asked to call back. The employee could have easily taken my name and number and passed it along to the incoming member of the print services department.)

The next morning (after not hearing back from anyone in print services), I placed another call:

Me: “Hello. I’m calling to check on a printing job. Is someone from that department in this morning?”

Employee: “Yes, but he’s with a customer.” (Avoid saying “but” to a customer. Whenever possible, substitute the conjunction “although” or “and” in place of “but” for a softer tone. Here’s how it might be worded: “Yes, although he’s with a customer at this time. May I take your name and number and ask him to return the call within the next 5 minutes?”)

Me: “Okay. I emailed a file that I need to have printed in order to pick up this morning. I requested to be contacted before running the job and haven’t heard back from anyone. Could you tell me, is it their practice to check messages first thing?”

Employee: “Typically.” (“Typically” does not convey confidence. It’s kind of like hearing “sort of”, “maybe”, “probably”, “I’ll try”, or “I think so.” There’s not much confidence associated with these types of responses.)

In the book Up The Loyalty Ladder by Murray Raphel, the author cites a nationwide survey of buyers across the United States who were asked the question, “Why do you buy where you buy?” (And no, the number one answer was not price.) The number one reason people buy where they buy is confidence. Confidence in the business—the people and the products/services offered.

People want to shop where they feel they will be taken care of, where the quality of the product is consistent, and where what’s promised is what’s delivered.

Are your front line service providers communicating the confidence your customers are looking for?

Last week, I brought my car into Car Wash Express to remove the window paint my son had used over the weekend to decorate the car for his playoff football game.

As I pulled up to the attendant’s station, I saw there were three different wash packages offered: $6 Basic Wash, $9 Super Wash, and $12 Ultimate Wash.

The attendant, Dane, asked me which option I would prefer. I responded, “Whichever one will remove this window paint.”

Dane suggested the $9 Super Wash. I agreed, paid for the wash, and pulled my car forward onto the conveyor belt that would pull my car through the automated wash. The wash began with an employee using a scrub brush to manually tackle the obvious spots—in my case, the window paint.

Since the car was being pulled slowly forward on the conveyor belt, the employee was limited on the amount of time he could spend removing the window paint. As a result, after the car wash ended and I pulled forward into the lot, remnants of window paint remained.

Now you might recall that, at the beginning of this post when Dane asked which wash package I wanted to buy, I answered, “Whichever one will remove this window paint.” And he had advised me to purchase the $9 Super Wash.

About this time, Dane appeared beside my driver’s side window and motioned for me to pull back around for a second run through the car wash. When I arrived at the entrance, there was Dane with a bottle of degreaser and a scrub brush. He personally ensured that all of the window paint had been removed before my second trip through the wash.

Let me just say that, based on previous experience in similar situations, Dane’s commitment to ensuring that the window paint had been completely removed was unexpected. Ordinarily, a car wash attendant who processes hundreds of cars each day through an automated facility, would accept payment, issue a receipt, and move on to the next vehicle—very process-focused and transactional.

But Dane chose to express genuine interest in the cleanliness of my car by following up at the end of the wash cycle to ensure the window paint had been removed. And when he saw that traces of the paint remained, he took steps to correct it.

Although my son’s team lost its playoff game, Dane’s follow up won me over as a customer.

Have you ever enjoyed a bottle of wine at a restaurant and then, days or weeks later, could not recall the wine’s name?

On occasion, to improve the odds of recalling the wine, I’ll either take a picture of the bottle with my phone, scrawl the wine’s name and year on a cocktail napkin, or pocket the cork.

But what if my phone’s not handy, I don’t have a pen or the wine has a screw top in place of a cork (as many premium wines now do)? Or, what if I simply don’t think to take a picture, record the wine’s name or pocket the cork?

Well, Mollydooker Wines has thought of that.

Last night, I opened my first bottle of Mollydooker’s 2009 Maitre D’ Cabernet Sauvignon*. As I inspected the bottle, I noticed there was a removable tab on the back label with instructions to “Peel Here.”

I thought this was brilliant for several reasons:

• Since it has a screw top, there’s no cork to serve as a physical reminder of the wine.
• All of the critical information to locate (and purchase) more bottles of the same wine is contained on this small paper tab.
• By virtue of presenting this tab with instructions to “Peel Here,” Mollydooker is compelling its customers to remember this bottle of wine.

I’ve forgotten the names of many enjoyable bottles of wine over the years because I didn’t take steps to remember them. In a crowded marketplace, with wines from all over the world hoping they will come to mind when it’s time to buy, Mollydooker Wines has done something about it.

Cheers!

* For those who are interested, I would describe this wine as fruit-forward with a long, leathery finish. Priced under $25 in most markets makes it an excellent value. Here’s the wine makers’ introduction to the vintage.

This post is the seventh in a series that will identify 10 different obstacles that have emerged from my analysis of customer satisfaction data. Maybe you will have encountered one or more of these obstacles in your own business? The seventh obstacle is a lack of clarity of purpose.

A lack of clarity of purpose exists whenever employees know WHAT to do and HOW to do it but do not know WHY they are doing it. This is most often the case.

When I ask five employees with the same job title WHAT they do and HOW they do it, 80 percent of the responses are similar. This is no surprise since these employees are simply describing their job functions (duties and tasks associated with a job role).

However, when I ask the same five employees WHY (from the organization’s perspective*) they do it, 80 percent of the responses differ.

* Human motivation theory is beyond the scope of this post. Simply recognize that each employee’s personal WHY (motivation for his/her individual work commitment or performance) is unique and, though it may be complimentary, likely differs from the organization’s WHY.

Most of the time, an organization’s WHY is unknown to employees. Or, this WHY is known but is misunderstood or misinterpreted by employees. There are a variety of reasons for this variance: lack of communication, awareness, understanding, credibility, interest, etc.

Let’s say the organization’s purpose (its WHY) is reflected in the vision statement:

“We will strive to provide exceptional customer service to our coworkers and customers, vendors, and other stakeholders in order to create promoters of our company.”

That may be the organization’s stated purpose—you know, the one that’s framed in the executive offices and perhaps is referenced during the company’s new-hire orientation—but it cannot inspire people without being reflected in the culture, policies, and practices of the company and without being brought to life daily in the words and actions of company leaders.

I recently read the book, Start With Why: How Great Leaders Inspire Everyone to Take Action by Simon Sinek. In it, he affirms:

“To inspire starts with the clarity of WHY… When a WHY is clear, those who share that belief will be drawn to it and maybe want to take part in bringing it to life… Average companies give their people something to work on… (The best) organizations give their people something to work toward.”

What are your people working toward?

Last week I came across the story of an Arizona college professor and mother of four, Dr. Erin Carr-Jordan, who discovered alarmingly unsanitary conditions at several area McDonald’s children’s play areas. If you missed it, here’s the story and a shocking video tour of her local McDonald’s Playland.

As a parent of four young children myself, I find this story disturbing on many levels. Aside from exposing children to harmful bacteria and pathogens (including fecal contaminants) due to apathy and negligence, McDonald’s has also displayed indifference towards Carr-Jordan’s feedback and violated the Corporate Values trumpeted on its website.

Although she complained to four different managers on six separate occasions (in addition to sharing her concerns with McDonald’s Corporation), nothing was done over a period of weeks to address the cleanliness of the children’s Playland structure seen in the video.

If McDonald’s is willing to neglect public areas like Playland structures, what happens behind the scenes in parts of the restaurant that are off-limits to customers? And if they disregard a mother’s feedback concerning the safety and well-being of her children—especially during this time of unprecedented transparency inspired by social media—what do they do with feedback that other customers share pertaining to other issues?

While McDonald’s is heralded as the model of operational consistency, it appears as though its actions in response to Carr-Jordan’s revelations of the appalling conditions within its Playland structures have been decidedly inconsistent with the corporate values expressed on its website.

In a section of its website titled McDonald’s Corporate Responsibility = Values in Practice, the company asserts that “corporate responsibility is about living our values each and every day. It’s about taking action, achieving results and always maintaining open lines of communication with our customers and other key stakeholders.”

“…maintaining open lines of communication with our customers…” Really? How does banning Carr-Jordan from visiting eight local McDonald’s restaurants in an attempt to thwart her efforts to hold them accountable and silence her criticism demonstrate corporate responsibility?

McDonald’s elaborates further on its corporate values:

We place the customer experience at the core of all we do
Our customers are the reason for our existence. We demonstrate our appreciation by providing them with high quality food and superior service, in a clean, welcoming environment, at a great value.

“…in a clean, welcoming environment…” Really? Have you seen the video?

We operate our business ethically
Sound ethics is good business. At McDonald’s, we hold ourselves and conduct our business to high standards of fairness, honesty, and integrity. We are individually accountable and collectively responsible.

“We are individually accountable and collectively responsible.” Really? How does ignoring Carr-Jordan’s feedback and banning her from its restaurants support this value?

We strive continually to improve
We are a learning organization that aims to anticipate and respond to changing customer, employee and system needs through constant evolution and innovation.

“We are a learning organization that aims to anticipate and respond…” Really? How does devaluing Carr-Jordan’s findings and attempting to silence her contribute to this value?

Instead of resisting its critics, McDonald’s should embrace them. Consider how this story might have played out if McDonald’s decided to acknowledge Carr-Jordan’s feedback as valid and initiated protocol to ensure the proper maintenance and sanitation of its children’s play areas.

It should not require YouTube videos, unflattering media reports, public pressure, and regulatory action to force McDonald’s and other corporations to do what is in the best interest of their customers and in alignment with their professed corporate values.

I’m not lovin’ the way McDonald’s has responded to this important issue. While Carr-Jordan is doing the heavy lifting of consumer (and child) advocacy in this case, I am committed to promoting her cause and boycotting McDonald’s restaurants until this issue has been addressed in a meaningful and responsible way.

Will you join me?