Customer value ecosystem: The habitat for business survival

There is a small quaint photo-frame shop near my home, which I often pass by. The most apparent thing which crosses a viewer’s eyes is a hanging board on the shop which reads:

“Gift wrapping not done here. We do not keep paper bags. No exchange policy. No warranty for lights.”

It is as if the shop-owner made a list of all the requests he would have seen his customers make over the years, and decided one fine day to make it clear to his potential customers what his service offerings are, albeit by giving a negative list. No scope for negotiations; no room for keeping any grey area alive.  

The easiest way to compete with this shop is – set up a photo-frame shop exactly adjacent to this shop and hang a board which reads:

“Free gift-wrapping. Attractive paper bags. Easy exchange policy. 3 months warranty for lights.”

The aforementioned problem isn’t specific to the photo-frame shop near my home, but extends equally and universally to some of the largest corporations, which not-so-long-time-ago ruled the markets they served in. These organisations failed to understand the entire ecosystem their customers and end-users operated in, and kept themselves alarmingly aloof from the apparent myopia they were functioning with. Or perhaps, on receiving feedback and requests from their customers, they preferred to tighten their screws on them.

We live in a world where convenience is the new commodity. A lot of progressive and so-called disruptive business models have been built on the mere premise of offering convenience to the end-users. These businesses dissected and understood the totality of the environment their customers operated in, thereby gaining insights on the attributes which their customers perceived to be of value. Their understanding of the typical customer kept evolving with time. These businesses, thus, were able to cater to the complementarities which existed around their core-offerings. Such organisations were able to scale up quickly, since they understood the pulse of their customer requirements.

Very often, a nagging customer is synonymised with a troublesome customer. However, the customer who asks for more may be the embodiment of all other customers who prefer to stay quiet. A nagging customer can be the most crucial feedback point which a business can ever ask for. The comments and expectations of these customers are akin to the windsocks for gauging the direction where the market winds are headed.      

A plethora of engagement letters and contracts which business organisations (including professional service firms) sign tend to define their scope of work through what do their scope of work will not cover. They use negatives to define what their positives are. The caveat pages outnumber the pages which their ‘scope of work’ cover. Yes, it is good to be transparent upfront and there is no second thought about the importance of disclosures. However, such contracts are a big turn-off since customers will always be more interested in knowing what business houses can do for them, as opposed to knowing what the business houses won’t do for them.

As markets deepen, customers will evolve. Or perhaps, it can also be the other way around. This is true for every market, irrespective of its nature, geography or dynamics. Customers’ tolerance levels for inefficiencies, inconveniences and incongruencies will decline, making way for those businesses who get their value propositions right. The competition matrices of well-established incumbents also prominently include the names of coming-of-age new-comers, who armed with their fresh lines of thinking are challenging the conventional beliefs. Starting with a fresh slate and beginning anew is considered more of a privilege than a shortcoming, since there is no burden of a track record to be maintained.

Disruption is a loosely defined word, and has almost transitioned itself to a venerated corporate jargon. What we are witnessing as disruption, is crudely, a significant exploration of complementarities and gradual step-up improvements in the customer value chain. It is merely a by-product of having understood and profiled the customer better than anyone else, and having acted upon this mine of knowledge and information with poise.

Business organisations are in the constant quest of not only staying competitive, but more importantly, for staying relevant to their customers. Relevance, which is established, nurtured and maintained through design as against default, is a phenomenon capable of long-term sustenance. The race to relevance, if not deliberated by understanding the customer’s value ecosystem, is a lost battle, long before the contest even begins.

The photo-frame shop near my home, therefore, needs a major overhaul. Editing that hanging board can be a worthy starting point!

Note: This article first appeared here.

(Author Urvish Mehta is an Arijit Singh devotee, life’s very own disciple, a perennial seeker of humour, a notoriously spiritual mortal, a treasurer of memories, an enthusiast for metaphors, a religious cricket fan, a keen admirer of the intricacies of the human mind with a penchant for pen, and amongst other things, a Chartered Accountant. Urvish has authored various articles on multifarious subjects, including accounting, strategy, leadership, management, spirituality, humour, corporate governance, cricket and marketing. These articles have been published in various forums, newspapers, magazines and websites. He blogs at urvishmehta.tumblr.com and can be reached at [email protected])