What Customer Centricity Actually Means

My parents’ favorite car that they ever owned was a 2014 Volkswagen Passat Diesel TDI. Great performance. Incredible acceleration. And an unreal fuel efficiency.

I remember my dad saying to me once “I don’t know why everyone doesn’t use this engine. It’s unbelievable.”

Turns out it was literally unbelievable.

The West Virginia University’s Center for Alternative Fuels, Engines, and Emissions didn’t believe it and, after extensive testing, they busted Volkswagen for cheating the EPA’s emissions tests.

It created an interesting dilemma for my parents.

On the one hand, they loved that car. They were bummed to give it up. They still talk about it. But on the other hand, they also love clean air and want their kids and grandkids to be healthy. They were PISSED at Volkswagen.

If Volkswagen had asked my parents what kind of car they wanted, they likely would have told them that they wanted something with good performance, good fuel efficiency...

AND a car that complies with all state and federal regulations.

But of course Volkswagen didn’t ask...

Because we’re not supposed to ask customers what they want. We’re supposed to know. And we’re supposed to pursue that vision relentlessly. Obsessively.

Thanks Henry Ford.

“If I had asked people what they wanted, they would have said faster horses.”

The modern incarnation of this ethos is Amazon. Amazon’s vision is to be “earth's most customer-centric company.” They relentlessly optimize everything they do for the customer.

But they never ask customers, including me, what we want.

If they did, I would tell them that I want the most convenient selection of products, fastest delivery times, lowest prices...

AND for them to not fund think tanks, like the Competitive Enterprises Institute, that deny climate change is real.

AND to pay their goddamn taxes.

AND to treat their workers like human beings.

Amazon would argue that they can’t do all those other things AND continue to give me the selection, convenience, and prices that I clearly value.

But here’s the thing — they never actually say that part out loud. They choose to maximize profit instead of being honest with me.

That’s fine. Whatever. It’s clearly a winning strategy.

But it’s not customer centric.

Hiding the difficult tradeoffs from your customers in order to win their business without triggering their revulsion is not customer centric.

In financial services, every provider (banks, credit unions, fintech companies) like to think of themselves as customer centric. But much like Amazon, this claim is suspect for most.

People love to complain about all the fees that banks charge, but the problem with banks isn’t the generic concept of fees.

The problem is free checking.

We’ve been conditioned to think that demand deposit accounts should be free, but in reality they’re not free. The costs have just been shifted.

Fees that give most customers the illusion of a free product while hammering a small segment of those customers into the ground isn’t being customer centric (even for the customers that aren’t paying the fees).

Fintech isn’t immune from this problem.

Simply appending “tech” onto the end of something doesn’t magically reduce all costs to zero or eliminate the need to be honest with customers about the tradeoffs inherent in delivering financial services.

Building your business to lose money in pursuit of growth by burning through all this abundant VC money and saying that you’ll “pivot to profitability later” is depressingly common in Silicon Valley. It’s not customer centric.

Raising money by claiming that banking is broken while charging customers as much as $400 for a $1,000 credit builder loan isn’t customer centric.

Disrupting the payday lending space with a digital community that creates “mutually beneficial outcomes” for lenders and borrowers, in which a borrower could pay up to 1,916.25% APR on a permitted 4-day loan isn’t customer centric.

Your customers are adults. They deserve the truth. They deserve to understand how hard it is to deliver all the amazing products and services that they’re accustomed to. They deserve to know how much it costs and why they have to share those costs.

That’s being customer centric.