Many companies focus on customers for their business. To clarify, consumers are those who buy/ use the brand. Customers are intermediaries like distributors/ retailers. Consumer-centric companies prioritise consumers over customers. For example, in Adidas, we had a motto of being ‘Consumer-focussed and customer aware’. The hierarchy is clear. Before we did that in the mid-90s, Adidas missed a lot of opportunities by catering to the customers and not sufficiently taking care of consumers’ needs and wants.
Brands like Nike and Apple are ruthlessly focused on the consumers and deliver so well to them that their customers are very aware that consumers want these brands. Apple and Nike always get pride of place with their customers. Other brands are traded off, negotiated with, and if required, weeded out.
Being consumer-centric is not about always delivering to whatever the consumers want. It is about being clear who your core consumers are and which consumer segments you want to cater to. Once you do this well for a while, you get a chance to lead the consumers. That allows you to differentiate you from your competition even better.
Consumer centricity is not just on paper in a strategy document or in brand communications. It needs to be reflected in behaviour at all levels, most importantly at the first point of contact between consumer and brand, at retail or in Customer Service. In some cases, it could be in a multi-brand store which doesn’t value your brand or a call centre staff who doesn’t feel any connect with your brand.
How do you ensure that the consumer gets the right experience? Most CEOs would say that they own the consumer experience but not often do consumers get to meet CEOs!
To have a successful brand, you don’t have to over deliver on everything that the consumers say they want from the product or the service. You need to differentiate on some of the most important.
Lots of brands and businesses think and claim they are consumer-centric, but come crunch time, they are mostly brand- and business-centric. They want ‘Brand Loyalty’ from consumers, but they are not loyal to their consumers. To me, consumer centricity is in place when your actions reflect consumer centricity. My hierarchy has been Consumer, Customers, Team and Company. How well we deliver to consumers and customers and manage our business, leads to sales and profitability for the company.
Let me move on to another aspect of consumer centricity—customer service. I prefer to call it consumer service.
Despite best efforts, mistakes do happen. Some consumers give you a chance to do something about this. Many don’t. I strongly believe that companies need to make it easy for consumers to seek redressal. Unfortunately, it is so often difficult to reach Customer Service. How many times have you tried calling an IVR and give up after 5, 10 or even 15 minutes? I haven’t had to wait for more than a minute at Amazon, and I am amazed at how empowered their call centre staff are. Fabulous!
Let me share an experience with Adidas in Singapore. Those days, I visited some sports retail store every day. This store was our own store. A consumer came into our store and talked about a problem with a shoe and the store manager responded, ‘Oh is that so? We have never had that problem before.’ The manager probably was being good to Adidas and casting doubts on the consumer without realizing it. I immediately went to the consumer, introduced myself and apologized for the problem and promised to fix it quickly. Almost immediately, we changed our policies on how we responded to our consumers. We made it easy for consumers to reach us, fixed the problem with replacements and gave them something extra for giving us a chance to make good. Looking back, we could have probably gone further.
Building brands unfortunately is not very inclusive, especially when you are building brands for coolness or brand love. It is not possible to be cool to everybody. You have to pick and choose your consumers. I may be wrong, but building brands is about defining your consumer segments and making the brand aspirational for. In some cases, you even manage the supplies carefully. Over-supply is an easy way to kill brand aspiration. May be this is difficult and not even realistic in many categories with low consumer involvement, but my learnings are based on my experiences with sporting goods and smart phones.
To have a successful brand, you don’t have to over deliver on everything that the consumers say they want from the product or the service. You need to differentiate on some of the most important. I am sure a lot of the Android consumers say the million things that their devices can do, yet the Apple consumers love their brand for what it has and ignore what it doesn’t. They get more from the beautiful aesthetics, the pride of ownership, the integrated way in which their hardware, software and apps and other services are provided.
You don’t see Apple being discounted by retailers. This may seem anti-consumer, but Apple consumers love it because they don’t have to run to 10 stores to see which store is giving a higher discount; similarly, with Nike, at least during my days. We tried to manage Adidas in Singapore, Thailand and Indonesia in a similar way.
Towards the end, I will make a case for why ‘Consumer Centricity’ may not be enough AND the need for ‘Society Centricity’ is also important.
There is a tendency of some leaders to hire teams that are more like them. It is easier to get the group to move fast when there are some things in common.
Thriving in Polarity AND…
Let me move from consumer centricity to a more complex situation, that of running a business. As a General Manager or Managing Director, I realized that along with consumer centricity, I needed to do many other things.
I knew that I had to focus on a few things. But, what should I focus on? I also realized that overdoing any one thing misses the opposite side, which was sometimes, equally important. If I focused on my work too much, I wouldn’t have my life. If I focused too much on the short-term, I missed preparing for the long-term. If I focused on the long-term, I may not have my job, as I would miss the short-term targets. My team may not even have the confidence that we could get there in the long-term. That’s when I realized, I needed to manage a few polarities, those seemingly contradictory objectives. It is not just balancing the contradictions. It is an intense focus on both sides of the equation. If I could thrive in some of these polarities that are important, that could be my mantra for success and my differentiation.
Managing or thriving in polarity is not an easy business. It can be confusing, and it can look like you are giving contradictory messages. Or you are being wishy-washy and not taking a stance. It is clearer to be black or white. I am looking at an intense focus on both sides—Black AND White.
Growth AND Profitability
The first polarity that was thrown at me as MD of Adidas Singapore, was a target to grow my business and also deliver a higher profitability. I had a long discussion with my boss and even cheekily asked him if the earlier MD managed the business very badly. How could I grow without investing? And if I invested in growth, my profitability would reduce and not increase, at least for a while. He gave me one look and said, ‘this discussion is over’ and that was it.
To grow the business, there is a need to invest in one or more areas. You also ideally need to invest in innovations. These require investments in time and money. Once you get economies of scale with size, there is a possibility that efforts can come down and so can costs, and hence, increases profitability. In the short-term, you don’t get the luxury of the resources that you would ideally want.
One way to earn trust and credibility is to generate part of the requirements from internal resources, by reducing or weeding out unproductive or low efficiency initiatives. It could be unprofitable lines, unprofitable brands, unprofitable customers or geographies.
So, at any point in time, I realized the need to manage businesses like a portfolio; there is a big chunk in the middle that should be well run with reasonable growths and profitability.
Then you are constantly weeding out unprofitable parts of businesses to unlock your time and reduce low profitability and use this time and money to constantly invest in new lines, businesses, experiments, innovations that have a potential for much bigger growths. A leader needs to be a visionary AND a farmer.
Change AND Continuity
There is always confusion around change. Everyone talks about how change is the only constant, but when it comes to crunch time, there is a lot of fear about change. A lot of people question change when things are going well. Why fix if it ain’t broken?
There is resistance to change as it disrupts the way we do things. There is a genuine fear that it may not work. While change is easier to accept when things are not well, your choices become sub-optimal by that time. In some cases, even then, some prefer to continue to do the same and expect different results. Many a time, you don’t get a second chance to make changes after a horrible event. I will share a couple of experiences: one with Adidas and one with Nokia.
Trefoil to Triangle
In the mid-90s when I joined Adidas, the primary logo was the trefoil logo. Adidas had brand history and heritage, but it was not seen as a strong performance brand. Even though it had strong product features, it was not seen as cutting-edge, especially in the US and Asian markets. Adidas decided to launch the Performance range with a new logo. There was a lot of fear and resistance with our customers and internally as well. I was shocked at the resistance in Germany, our home country, mainly with the employees. Many of us who were new to the brand welcomed the change as we saw the need for change. Our consumers accepted them very well, when we went ahead. The Original logo was used to launch a whole new casual/ streetwear range building on the heritage of the brand. Together, both the ranges and sub-brands grew dramatically to strengthen both the heritage and the Performance sides of the business. Imagine, if we had waited longer to make the change!
Not a Smart Move
My other story with Nokia is not such a positive one. When I joined Nokia in 2011, there was already a momentum towards smartphones. However, many in the organization in India and globally didn’t think that this was a big deal. I had seen the market in Singapore change overnight from regular phones to smartphones thanks to the telecom operators supporting the move.
Despite having some amazing smartphones with Windows OS, there was no buy-in with the team. I am not talking about the Nokia Symbian phones, but the Nokia Lumia range. The teams continued to focus on basic mobile phones—the devices you could use to talk and SMS and not much else. The focus was more on volume and less on value; more on sales and distribution and less on consumer experience.
Overall, a huge opportunity was lost because we were too slow to respond to consumer needs. Smartphones business is a very dynamic business. It is shocking that it happened to Nokia. For 150 years Nokia was selling carbon black, paper and other natural products and shut all that and moved into telecom in the 90s. 15 years later, it was struggling to focus on smart-phones. In the earlier case, Nokia was the outsider and disruptor; and in the later situation, it was the insider resisting change. Could we have as an organisation intensely focused on both mobile phones and smartphones by reorganizing the Product Development and Sales teams?
Alignment AND Diversity
Alignment is definitely important to deliver outcomes in a fast, efficient and effective manner. There is a tendency of some leaders to hire teams that are more like them. It is easier to get the group to move fast when there are some things in common. You see that especially when an organization hires a new leader from outside. The new leader brings in a team of trusted lieutenants from the previous organization.
It is important to have diversity of thought and experiences. You could have diversity of gender and race and still be subject to group think. As I mentioned in my earlier point, most disruptions come from outside the industry. Most innovations come from ideas transplanted from one industry to another. A diverse set of people with diverse experiences is willing to work with different ideas much better, although it can be challenging in the early days to achieve some semblance of a coherent way of working.
It is important for brands and businesses to move with the times and be more in sync with the new generation of consumers.
To bring alignment, instead of hiring people aligned to the leader or group think, it is worth considering aligning on purpose. In Adidas, I found it easy to align people by hiring for interest in sports. You need not be a top athlete, but you needed to be at least interested in sports—even the accountant or the person in the warehouse.
Learning AND Contribution
Quite a few organisations and some of my bosses too liked to have people fill a role when they are 100% ready for the role. I strongly believe that everyone should get an opportunity to get into a role in which they can learn and contribute.
‘Only learning’ is too expensive for the organization and ‘only contribution’ is not as exciting for the individual. You don’t have to compromise on learning to be part of a reputed brand or organization, if your job is not exciting and doesn’t allow you to learn. I am not talking about training and development here, but about trying experiments and learning from them, especially the mistakes.
My early experience at Pond’s was amazing. The opportunity to learn and contribute at Pond’s was incredible. As an Assistant Brand Manager, I was rolling out Vaseline Intensive Care Lotion across the country after a previous pilot launch, made a TVC for Vaseline Prickly Heat Lotion for which the mix was work-in-progress, and developed a mix for Vaseline Antiseptic Cream to compete with Boroline, the poor person’s alternative to Pond’s Cold Cream. Not to forget Vaseline Lip Guard and early work on Vaseline Heel Guard—Right out of IIMC! It was a dream come true. I am very grateful to the Pond’s leadership team for making that possible.
Consumer- AND Society-Centric
I had left the consumer centricity piece saying that it was not inclusive. What your consumer segment wants may alienate another consumer segment. What if, what your consumers want is not morally right? What if their want is marginalizing others? What if their want is reinforcing current regressive stereotypes? Also, you have the millennials and Gen Z who are very conscious of some of the social issues. Whether it is against pollution or child labour, Women’s’ and LGBT rights or climate change, they are far more aware.
It is important for brands and businesses to move with the times and be more in sync with the new generation of consumers. If they are not already your consumers, they will be your potential consumers soon and if the brand and business is not in sync, they will not be your consumers ever.
It was always the right thing to do, but most brands got away as consumers then were not as demanding. Some brands are already beginning to move in that direction. I can name a few international brands, but I was looking for some examples in India when a friend suggested the Tata Tea Jaago Re campaign. I liked it.
I haven’t done enough research to see if Tata Tea is using this just as an advertising campaign or supporting this with a fundamental change at the organisation level and following through with activation on the ground. I do hope that this is more than an advertising campaign.
To sum up, there will be polarities thrown at you and it is important to learn to manage and even thrive in polarities.
I talked about a few ANDs:
Growth AND Profitability
Change AND Continuity
Alignment AND Diversity
Learning AND Contribution, and most importantly,
Consumer AND Society Centricity
I am not suggesting that the AND mindset will always be suitable. But do consider it as one of the options and explore the ‘Power of AND’, not a wishy-washy AND, but an intensely focused AND. n