image showing uncooked rice

The ‘C’ word

Customer Experience (#CX), Customer Service, Customer Journeys, CRM, multi-channel – these are all complex, modern day challenges that current businesses face. There isn’t a single business today that doesn’t mention the ‘c’ word somewhere in their offices, in their stores, on their website or in their brochures – the customer is king, long live the king! And, throw in social media (word of mouth to the uninitiated), and we all know a company’s brand can be enhanced or destroyed based on the most trivial of vignettes or sound bites.

So, these are all modern day challenges in the 21st century – right? Well no ,you’re wrong! Every tradesman or business has had to deal with these same challenges since……the year dot actually! When the very first man (and it probably was a man!) decided to exchange something he had made, raised or grown for some form of currency, these same challenges existed except they didn’t have the same buzz words that we use in business today.

In 1996 Dr Christian Grönroos, a leading Finnish academic, published one of his seminal papers about a merchant in ancient China, which encapsulates all of the above.

In a village in ancient China there was a young rice merchant, Ming Hua. He was one of six rice merchants in that village. He was sitting in his store waiting for customers, but the business was not good.

One day Ming Hua realised that he had to think more about the villagers and their needs and desires, and not only distribute rice to those who came into his store. He understood that he had to provide the villagers with more value and not only with the same as the other merchants offered them. He decided to develop a record of his customers’ eating habits and ordering periods and to start to deliver rice to them.

To begin with Ming Hua started to walk around the village and knock on the doors of his customers’ houses asking how many members were there in the household, how many bowls of rice they cooked on any given day and how big the rice jar of the household was. Then he offered every customer free home delivery and to replenish the rice jar of the household automatically at regular intervals.

For example, in one household of four persons, on average every person would consume two bowls of rice a day, and therefore the household would need eight bowls of rice a day for their meals. From his records Ming Hua could see that the rice jar of that particular household contained rice for 60 bowls or approximately one bag of rice, and that a full jar would last for 15 days. Consequently, he offered to deliver a bag of rice free every 15 days to this house.

By establishing these records and developing these new services, Ming Hua managed to create more and deeper relationships with the villagers, first with his old customers, then with other villagers. Eventually he got more business to take care of and, therefore, had to employ more people: one person to keep records of customers, one to take care of bookkeeping, one to sell over the counter in the store, and two to take care of deliveries. Ming Hua spent his time visiting villagers and handling the contacts with his suppliers, a limited number of rice farmers whom he knew well. Meanwhile his business prospered.”

As you read through this story, I’m sure you will have recognized some familiar themes – the importance of having a direct dialogue with your customers, understanding your customers’ needs, delivering a service that meets “their” requirements, multi-channel, keeping records on your customer preferences, and delivering a differentiated and reliable service that ultimately provides value to your customers.

So, businesses today face the same challenges as businesses did in the past, which is somewhat reassuring given how easy it is to get lost amongst all the jargon of our day!

Published by

Stuart Allan

I have worked in the IT and business processing outsourcing industry for nearly 30 years. I joined Sopra Steria in January 2006 and currently head up the UK Transport and Utilities sector, a £30m business unit with more than 700 people working in it across the UK, Germany and India. Prior to joining Sopra Steria, I worked for several large financial services and insurance organisations, including RBS and Capital One Bank, and in the Lloyds of London insurance market in a variety of senior management positions.