Interview: Professor Mark Jenkins
Customer Centred Strategy:
Thinking Strategically About Your Customers
SM
This is a Cranfield School of Management podcast, I am Steve
Macaulay and I am interviewing Professor Mark Jenkins about his
book The Customer Centred Strategy: Thinking Strategically About
Your Customers.
Now, managers are regularly implored to be customer centred and to
be strategic, but without much idea of how or even why. There is a
book that does get specific and we are here today to talk to Professor
Mark Jenkins about that. So Mark, why customer centred and why
strategy?
MJ
I think the origins of this book come out of many conversations that I
have had with managers on a variety of programmes at Cranfield.
What you tend to find is that in dealing with the problem of strategy,
managers, organisations are looking for something that they can
really hang to, to give them some focus, some clarity and my view is
that should be the customer. There are a lot of platitudes, there are a
lot of general statements made about customers, but it’s only by
really getting into a clear focus on who your customer is and what
they really need that you can get clarity and strategy. So for me the
two go together: a strategy that doesn’t have a clear statement
position on who the customers are that we are actually focusing on,
what they value, how we are going to deliver it, cannot provide the
clarity for the organisation to move forward.
SM
Interesting, so one of the things I noticed about your book is that you
go into quite a bit of detail, challenging the way customers are
viewed. One of the things I noticed was you talked about customers
as strategic stakeholders. I remember reading the book some long
time ago, and the two things that struck me at the time were you
talked about people, not just markets, and different people within
your own organisation see customers differently. Would you like to
expand on how you view customers?
MJ
Yeah. I think one of the issues in the way many organisations look at
their environment and gather information is to think about markets,
products and sales of products typically – market share versus their
competitors. That is all well and good, but what it doesn’t do is give
them real clarity about how they create competitive advantage and in
Customer Centred Strategy
my view that can only be achieved by getting this clear focus on who
these customers are, where they sit, where they live and what it is
they value. And so it is moving to that extra level of detail, away
from focusing on market share, away from focusing on competitors to
say let’s really be clear, what is it that our customers are really
looking for and how can we deliver that, and how can we deliver that
better than the competition?
SM
One of the things you do is offer some descriptions of tools and
frameworks that companies can use to help them achieve that. I
remember there was one called customer matrix – would you like to
expand on some of these just to give the listeners some thoughts
about that?
MJ
Yes. Essentially the book covers a number of different tools drawn
from different areas – some have been developed at Cranfield,
others not. But all really help this clarity and this focus on the
customers. The customer matrix is a good example of that – it
essentially starts from the customer’s perspective: how does the
customer see the world? And it splits out the value for money
dimensions into the value dimension and the money dimension. In
other words, as a customer, what value am I going to derive from
acquiring this product and what price do I have to pay to acquire it?
And if you think about that as a landscape of positioning competitors
and also defining our strategy, it gives us a sense of where we are,
where we are trying to move to. But in order to do some useful
analysis and some useful thinking on the customer matrix, you have
to be clear as to who your customer is.
SM
Now, one of the things that you talked about in the book is that
managers should consider not just today’s customers, but tomorrow’s
and one of the things that I saw in the book was about scenario
planning. Now I have always held, maybe wrongly, a view of
scenario planning that it’s something the likes of Shell do and it’s a
very complicated process. Could you expand on just what you see it
is and what you see it can be to companies?
MJ
Well, I think scenario planning is a generic approach to help you think
different possible futures. The level at which you apply that depends
on your business. Clearly someone like Shell in the global
petroleum, global energy business, is going to take a very wide view
on that in terms of growth, global changes, technologies, political
influence – all those factors. What I am suggesting is, as we start to
think about our customers more specifically, scenario planning
actually helps us again think about different possibilities for those
customers – who the future customer might be, what it is that they
are going to look for. So I am using the principles of the technique
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but applying it in a more focused way around the customer and what
it is we think they are going to be looking for in the future.
SM
One of the areas that you explore in the book is looking at the
competencies of the organisation and what it can actually deliver and
then balancing that out with the needs of the customer. Can you say
a bit more about that?
MJ
Yes. I mean, essentially, one of the challenges in following the
customer is you have got to follow it in a way that is going help you
create advantage. So, maybe customers all want a certain kind of
product, but it may be that you cannot produce that product as well
as your competitors, but you can produce a slightly different product
that appeals to a niche group of those customers. So it’s about
alignment. It’s finding those areas where you have an advantage,
that it’s more difficult for your competitors to compete with you, and
that can be done by being clear about your own specific
competencies and aligning those with groups of customers who are
going to value what you do.
SM
Would you see people being able to do that on their own – it feels a
bit academic in a way, some of these tools . It’s very well us sitting in
here in an ivory tower world, but a manager on the spot, are they
able to pick up some of these?
MJ
Absolutely. I think all strategy tools for me are thinking tools. They
are not black box tools – you put the data in and it gives you an
answer. The problem with strategy is that managers have to make
sense of a situation and to analyse and synthesise the data, and then
find a way forward – a strategy that they can follow. So it’s about
helping them think about their situation, challenging some of their
accepted wisdoms to say well perhaps there are different ways of
thinking about these things. So every tool has to challenge, but has
to provide a basis for people to discuss, think through, articulate,
develop logic and that is exactly what these frameworks do. So it
may be an individual can work through it, it may be a group of
individuals, but what is important is that it provides a common
language for those debates.
SM
Now you have got years of experience of working with organisations,
using these tools. Are there any companies that stand out and you
can say, well they seem to be doing what I have just talked about and
that seems to be working well?
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MJ
Yeah. I think some of the great examples recently are companies like
Tescos in the retail sector, who have been able to use a lot of the
data they collect from Clubcard and so on to be very targeted in
terms of the segments that they work through. Interestingly you also
see it in areas like mobile phones. A company like T-Mobile have
focused on some of their potential weaknesses. One of the problems
with their network is that it doesn’t work so well in rural areas so their
market segmentation has been focusing on younger teenagers in
cities, which differentiates them slightly from other companies – their
competitors like Vodafone and O2 – by focusing on this segment and
building a strategy that focuses on the segment and therefore creates
advantage in that area.
SM
Now, the book came out in the late 90s and the world has moved on
since then – have you seen changes in this area? Are we more
customer centred, are we more strategic?
MJ
I think we have more of the trappings of being customer centred, for
example, technologies in CRM, customer service work – all these
sort of areas. So I think the language has become more
sophisticated, the tools have become more sophisticated, but I still
see that fundamental challenge of how you embed that kind of ethos
in the organisation. I think organisations are still grappling with that.
And of course the other problem is in many markets that speed of
change is increasing. So, actually trying to get clarity and
adaptability in a way that you look at your customers is an increasing
challenge for organisations.
SM
So, finally, I would like you to give some advice to the average
manager that might read this book – are there any tips and traps that
you might want to point out?
MJ
I think for me the critical piece in this book is to say to a manager
reading it, believe in yourself, believe in the data and instincts that
you have. What this book does – it doesn’t give you answers, but it
helps you think through issues and make decisions. At the end of
the day, the individual still needs to make a decision. Someone
needs to say yeah, this is the way we are going to go and build the
commitment around that. So don’t feel you have to have all the
data, all the answer before you make a decision and you find a path
forward. I think increasingly managers have got to synthesise a
situation, take really imperfect information but find a way forward and
really stick to that and I think that is the challenge that is facing most
managers today. This book is not a set of answers, it’s a way to
help think and craft conversations around customers and I think that
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is the way to take it forward.
SM
One of the things that struck me in the book is about challenging your
own assumptions about customers – do you want to say anything
about that?
MJ
Yeah. I think as organisations change, as customers change, what
you sometimes find is that an organisation is built around – the
products, the approaches – are built around a customer that no
longer exists. I always remember a company I used to work for in
agricultural machinery where essentially the product manager
designed a tractor in this case, around his brother in law who was a
farmer, and everything ended up being designed really based on that
kind of customer. But of course the markets move on, the kind of
practices move on. So one of the challenges is being clear about
who actually is the customer that is informing our decisions and how
do we ensure that we are moving forward with that customer, rather
than essentially serving a customer in our minds that is really ten,
fifteen years out of date.
SM
It’s a very important point. Thank you very much. We have had a
very useful look through at some key areas. Thank you.
MK
Thank you.
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