CHAPTER

Who Is a Customer?
3
WHO IS A CUSTOMER?
The common use of the term “customer” hides a somewhat com-
plex ambiguity. It is one of those words whose presumed meaning
is so well-understood that it is infrequent that any organization
actually has documented a definition. Yet in any initiative focused
on customer centricity, clarifying the concept of customer becomes
a critical task to precede data collection, analytics, process improve-
ments, and change management. Precision in terminology can influ-
ence decision-making, so it is valuable to explore the concept of
customer and how those considerations impact organizational cus-
tomer centricity.
In retrospect, over the past 20 years, the industry analysts, popular
technical press, and technology vendors promoting customer relation-
ship management often use phrases such as “360-degree view of the
customer” or “single source of truth about the customer” to suggest
that it is possible to have a single business application that can address
the conglomeration of all business process requirements necessary to
support the introduction of customer-centric policies and processes.
These types of phrases resonate with people in any business function
whose processes have a customer touch point, such as sales, marketing,
support, or customer service. And while from each business function’s
standpoint, the defined characteristics of a customer may be clear,
across functions there may be subtle differences in what is understood
to be meant by the term “customer.”

These subtleties may be irrelevant from a purely operational stand-

point, but may have impacts for analytical models that consolidate col-
lections of customer data convened from across the different business
function sources. Semantic or structural differences that do not pose
any material conflict typically won’t introduce any inconsistencies. But
there are times that differences in meanings may lead to nonsensical
aggregations. For example, the sales department might define a cus-
tomer as “the entity that has paid for the product,” while the support
Using Information to Develop a Culture of Customer Centricity. DOI: http://dx.doi.org/10.1016/B978-0-12-410543-0.00003-2
Copyright © 2013 Elsevier Inc. All rights reserved.
18 Using Information to Develop a Culture of Customer Centricity

department defines the customer as “the individual with the right to

request support.”

DEFINING THE CONCEPT OF CUSTOMER—AN EXAMPLE

Not only might these be different entities, they might not even be
related. Consider a hotel with a fitness center. The hotel management
might pay for an elliptical machine that is placed within the fitness
center that is used by the guests, managed by staff members who are
employed by the fitness center, with the equipment maintained by an
external service provider. In this scenario, there are at least six poten-
tial parties (a term that we can use as a place holder for an entity with
whom the elliptical machine company interacts) that could be defined
as the customer:

1. The hotel paid for the elliptical machine.

2. The fitness center “owns” the elliptical machine.
3. The finance manager at the hotel authorized the actual payment for
the elliptical machine.
4. The fitness center staff members oversee the use of the elliptical
machine.
5. The hotel guests use (and may have questions about using) the ellip-
tical machine.
6. The external maintenance company services the elliptical machine.
More details about the presumed customer relationship are pro-
vided in Table 3.1, and it sheds some light on the touch points the
elliptical machine manufacturer might want to manage. However, if
the manufacturer wanted to create an analytical environment used to
track all customer interactions, different departments might have inde-
pendent databases with information about one or more of these enti-
ties. And because the perception of a customer differs across these
different departments, if all these customer data sets were merged
together into a data warehouse or an analytical application, the aggre-
gated count of customers will be inconsistent from any business func-
tion perspective.

So how do you answer the question of “who is a customer?” in a

way that enables consistency in reporting and analysis? And more
importantly: how can you solidify the definitions so that analytical
results can be used to enhance the customer experience?
 Who Is a Customer? 19

Table 3.1 Characterizing the Customer Roles

Party Authority Touch Points

Hotel Owner of budget and completed payment for the Marketing

product Sales
Fulfillment
Fitness center Houses the product Fulfillment
Responsible for continued operations of the product Maintenance
Retention
Finance manager Individual authorizing payment Marketing
Sales
Fulfillment
Upsell/cross-sell
Retention
Fitness center staff Oversight Fulfillment
Maintenance Maintenance
Management of products
Hotel guest Uses the product Maintenance
Sales
Eternal maintenance Maintains the product Maintenance
company Retention

HOLISTIC ENGAGEMENT IDENTIFIES THE CUSTOMER

Basically, getting a single definition for “customer” will be a perennial
problem in data usability for customer centricity. The variations in
explicit or implicit definitions can lead to inconsistencies in reports,
“customer analytics,” and resulting customer profiles that are supposed
to inform any of processes for customer interaction.

To continue our example in which there is a collection of potential

customers for a company that manufactures elliptical machines sold to
hotel fitness centers, recognize that each interaction and touch point
provides a means of branding and marketing the product and the com-
pany. Consider one particular use case in which one of the elliptical
machines stops working correctly:

• A hotel guest experiencing the failure will report it to one of the fit-
ness center staff members.
• The fitness center staff member will contact the external mainte-
nance company to evaluate and fix the problem.
• The maintenance person comes in, checks out the machine, and
determines that a part needs to be replaced, and that the broken
part should be covered under the machine’s warranty.
20 Using Information to Develop a Culture of Customer Centricity

In this scenario, each potential customer’s experience will influence

his/her perception of the quality of the product and perception of the
manufacturer in slightly different ways. Of course, at this point, the
desired outcome of the process is to have the machine fixed as quickly
as possible so that it can be put back into productive use at the fitness
center for the benefit of the hotel guests. However, which customer
will be expected to initiate the support process? Is it the hotel guest
who experiences the failure? The fitness center staff member? Or the
finance manager acting as the guardian of the hotel’s investment?
From the perspective of the elliptical machine’s manufacturer, rapid
customer support may be a differentiating factor for driving product
sales, and to promote the perception of rapid customer service, the
manufacturer might not care who calls, as long as there is traceability
associated with the process ensuring that the broken machine is indeed
under warranty. As far as the manufacturer is concerned, any of those
parties is the “customer,” and awareness of the various relationships
among those parties is valuable in ensuring the fastest response.

Examining specific use cases such as this example demonstrates the

folly of attempting to come up with a single definition of customer.
In essence, any individual playing any role as part of a business
process can be considered to act in a role of “customer.” In other
words, the operational definition of “customer” can include any party
with whom the organization interacts, and the operational scenario
characterizes the attributes necessary for providing customer service
(i.e., supporting the customer touch point). Using that definition, we
can suggest that customer centricity involves more than just knowing
which individuals or organizations qualify as customers; rather, it
means understanding the ecosystem that emerges around the life cycle
events of the customer relationship.

REFLECTIONS: CUSTOMERS AND CUSTOMER CENTRICITY

The fitness equipment example may seem somewhat contrived, but it is
crafted to prove a point: any company must understand a complex set
of customer relationships to ensure the provision of a desired level of
customer support. In turn, there is a challenge of discerning exactly
who the customers are, and through this examination one might chal-
lenge the desire to have a single definition of customer because there is
 Who Is a Customer? 21

no single definition of customer. Different individuals or organizations

play different aspects of the “customer” role at different times and that
attempting to homogenize the concept of customer might be
counterproductive.
In essence, any individual or organization with which your business
has a touch point plays one aspect of the role of customer. Any inter-
action with a party is an opportunity for strengthening the corporate
relationship with that party, polishing the corporate brand, and estab-
lishing goodwill within the market. Treat every interaction as a
customer-centric interaction. To be customer-centric means developing
processes, training staff members, and instituting measures for enhanc-
ing the experience of any party with whom there is a customer
relationship.

ENTITY VERSUS ROLE

Different parties play different types of customer roles within different
use cases and processes. At the same time, there may be different pro-
cesses that engage the same parties acting in different roles. The trick
lies in enhancing your processes to ensure that all party interactions
(even ones that are not specifically “customer-oriented”) are customer-
centric. That suggests that there is value in segregating the concept of
“customer” from the party playing the role of the customer, implying
the need to determine who a party is as well as the role that party
plays in the different facets of each business context.

Again, the fitness center example helps to demonstrate: the hotel

finance manager authorizing the payment for the elliptical machine
plays the role of customer along a financial facet. The technician from
the external maintenance company plays the role of customer along
the service contract facet. The hotel guest who might call the company
to get instructions on how to best use the machine might be playing
the role of customer along a user support facet. And so on among the
entire breadth of customer roles and facets.

Instead of trying to create a single view of a customer, recognize

that there are multiple views that drive the creation of value in differ-
ent ways. This realization will help in showing how managing the
aspects and facets of customer information can help in developing a
strategy for customer centricity.
22 Using Information to Develop a Culture of Customer Centricity

SUMMARY: DRIVING CUSTOMER CENTRICITY

The perceived definition of a customer can help drive a corporate
strategy for customer centricity, especially when recognizing the
many different facets of the customer role that can be played by indi-
viduals at different times in different scenarios. That realization also
allows us to consider some high-level suggestions for how a customer
centricity strategy can create value in the organization:

• Consider every interaction with any entity (individual or organiza-

tion) in which there is an exchange of value as a customer
interaction.
• Treat every business process touch point as an opportunity for
exchanging value.
• Presume that the data collected from every business process touch
point has potential for improving your organization’s methods of
customer profiling.
• In each business process, examine how customer touch point data
can contribute to creating value, either by leading to increased rev-
enues, decreased costs, reduced risks, improved productivity, or
through enhanced customer experiences.
Internalizing these concepts should lead to the desired outcomes of
business value improvement. In particular, these ideas are fundamentally
dependent on data, information, and information services that enhance
the creation of actionable knowledge driving profitable customer centric-
ity interactions and decisions.