In this interview (with Dr. Nagendra V. Chowdary), Prof. Bernd Schmitt suggests several measures to make organizations customer-centric

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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 creative consumer understanding and strategy
development.
Professor, congratulations for your well-appreciated and best-selling books –
Big Think Strategy, Customer Experience Management and Experiential Marketing
– and being an award-winning teacher with rich international exposure? In all
these years of research, teaching and consulting what insight according to you
has been the most defining moment of your life?
The insight is that companies need to be customer centric. They cannot just focus on
products and technologies. Computers, televisions, cars and other products are not 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
EFFECTIVE EXECUTIVE DECEMBER 2010 26

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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
Bernd Schmitt
5-8 years) in the consumer behavior that has meant
is Robert D.Calkins Professor of International Business at
significant changes to the way companies understood Columbia Business School in New York, where he also directs the
consumer behavior? Center on Global Brand Leadership. He is CEO of The EX Group, a
Products are increasingly undifferentiated along functional and consulting firm focusing on innovation and customer experience.
utilitarian dimensions. They all deliver the same basic consumer Schmitt has authored or co-authored seven books which have been
benefits. That’s why we have seen over the last few years a new translated into 20 languages, including Experiential Marketing
differentiator: the customer experience. In consumer behavior, (1999), Customer Experience Management (2003), and Big
we must nowadays understand the customer experience. For Think Strategy (2007).
example, what I call Sense, Feel, Think, Act and Relate belongs He is a frequent keynote speaker at conferences worldwide. His
to that understanding. How does the customer sense a clients include leading companies in the consumer package goods,
product? Are the five senses being stimulated by the product automobile, electronics, software, financial services,
pharmaceuticals, beauty and cosmetics, hospitality, and media
(sight, sound, smell, taste, touch)? What does the customer feel
industries.
when he or she encounters the brand? Does the brand trigger
thoughts and imagination? Does it fit into consumers’ lifestyle He has been profiled on CNNfn's ‘Business Unusual’ and has
appeared on BBC, CNBC, CNBC-Asia, CNN, NHK and on The
and does it reinforce social relations?
Daily Show with Jon Stewart. He has contributed articles to The
Several decades ago Peter Drucker said, “The single
New York Times, the Asian Wall Street Journal, and the
most important thing to remember about any Financial Times.
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
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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. e
The interview was conducted by
Dr. Nagendra V Chowdary
Consulting Editor, Effective Executive
Reference # 03M-2010-12-05-06
EFFECTIVE EXECUTIVE DECEMBER 2010 28