Executive Interviews: Interview with Bernd Schmitt on Customer Centric Organisations
December 2010 - By Dr. Nagendra V Chowdary

Bernd Schmitt
Bernd Schmitt
Robert D.Calkins Professor of International Business
Columbia Business School
New York

just a bundle of features and benefits - that is they help you complete tasks and solve problems. They also must fit into people's lives - into their lifestyles, so to speak. They must be fun, entertaining, and mentally stimulating. Companies like Samsung and Apple, or Volkswagen understand that.

• Your experience spans several fruitful years of research, teaching and consulting in the areas of consumer behavior and experiential marketing among several other allied disciplines. What specific changes have you noticed in the last few years (especially during the last 5-8 years) in the consumer behavior that has meant significant changes to the way companies understood consumer behavior?
  Products are increasingly undifferentiated along functional and utilitarian dimensions. They all deliver the same basic consumer benefits. That's why we have seen over the last few years a new differentiator: the customer experience. In consumer behavior, we must nowadays understand the customer experience. For example, what I call Sense, Feel, Think, Act and Relate belongs to that understanding. How does the customer sense a product? Are the five senses being stimulated by the product (sight, sound, smell, taste, touch)? What does the customer feel when he or she encounters the brand? Does the brand trigger thoughts and imagination? Does it fit into consumers' lifestyle and does it reinforce social relations?

• Several decades ago Peter Drucker said, "The single most important thing to remember about any enterprise is that there are no results inside its walls. The result of a business is a satisfied customer". Yet, there had been at best hard-sell sales pitch rather than genuine concern for what the customer wants. Why this dichotomy? Because many companies are inwardly focused on their operations and technologies. Becoming customer focused requires doing market research (and not only the traditional surveys and focus groups), but to observe customers, follow them around, understand them in-depth. It requires, as I argue in Big Think Strategy, creative consumer understanding and strategy development - for example, benchmarking outside, not inside, an industry, and questioning long-held assumptions (for example. that consumers are rational beings). They are as much driven by emotions as by rationality.

• Every MBA program across the world offers specializations in many functional areas of management - finance, marketing, operations, IT and human resources management, etc. However, no business school offers any specialization in customer experience management. It is after all the customer that provides the 'fuel' and 'reason' for every other department to exist. Why then no specialized and focused course on customer experience management?
  At Columbia Business School, I teach customer experience management as part of marketing. That's where it belongs because marketing says that the customer is the most important asset of a firm. No customer, no business - it's that simple. But, of course, customer experience management must also reach out to other disciplines in an organization, for example human resources. In service businesses, in particular, people often deliver the experience.

• What according to you is Customer Experience Management (CEM) and how it is different from customer relationship management?
  CRM is a buzzword for database marketing. It is often purely transactional, recording when the company had an exchange with the customer when and how, and how much the customer spent. It has little to do with CEM. I wrote more detail on that in the introductory chapter of my book Customer Experience Management. CEM is a unique approach. I feel it is the first management approach that takes the customer really serious and views the management and the business from the customer point of view.

1. The Multi-Branding Strategy Case Study
2. ICMR Case Collection
3. Case Study Volumes