The next level of Customer Centricity

About one year ago, Belgium went into full lockdown. Back then, most of us were hopeful everything would go back to normal after the summer. I thought the same. After all, 70 days after China’s first known COVID-19 case, the country reached a permanent plateau of about 80,000 infections in total. China’s health crisis was pretty much under control by May 2020. 

When lockdowns were announced in the West, the top priority was the survival of the business. Most companies went into crisis management mode to keep production up and running and retain customers and talent. Customer experience was not often top of mind as the house was on fire. 

By the fall, when a second lockdown fell upon us, we knew this new reality was here to stay. We were knocked off-balance and frantically started rethinking how we could serve both the practical and emotional needs of our customers in a virtual world. The crisis and social distance compelled us to pursue more human and purpose-driven goals. A supplier became a friend, managers became coaches, marketeers became philanthropists, and for the very first time we all remembered the name of the IT guy. Our relentless fear of the digital world was defeated. Without an online customer service, an e-commerce site, a digital marketing or remote communication offering we would lose customers and talent. But like toddlers learning to ride a tricycle, we were also discovering how it really worked. 

Yet, we now live with a new fear. A fear of making mistakes and fear of missing out on digital. We follow new digital transformation processes, models, flows, automations and optimizations - all to guide us to the best digital customer experience. China, however, has already evolved a lot further along that way and it can offer us some fantastic inspiration. 

IN THE INTERNET WE TRUST 

In the West, brands have cared a lot about their positioning, legacy and brand storyline to differentiate products from the competition. Nike versus Adidas, Apple versus Dell, Tesla versus Volvo. Our minds tell us which brand we identify with, and consequently we trust them. In China, however, in the past 20 years, most consumers have fallen victim to scams and faulty products from both online and offline purchases. Consequently, Chinese customers have developed a higher level of mistrust in brands. 

The primary goal of any brand active in China has therefore always been to gain the trust of the customer. Building a brand image always came second. It pushed Chinese brands to become more customer-centric than foreign brands who stood for high quality and a decent customer service. The Chinese consumers’ need to feel safe over their purchase, made them turn to the internet for reassurance. The lack of trust in merchants created the boom of China’s e-commerce platforms as they increased the customer trust with safer payments, return policies, ratings, reviews, effective delivery and integration of social media to receive friends’ or trustees’ opinions. 

The buyer mistrust that exists in China, has made its commerce the most digitized, mobile-friendly, automated, integrated and convenient marketplace in the world. This last decade, China’s big tech have invested massively into mobile payment, super-apps like WeChat, e-commerce capabilities, logistics and omnichannel retail. With this digital infrastructure in place, Chinese brands have focused on gaining the trust and hearts of customers. While Western brands are now implementing processes and strategies to help customers through the global crisis, Chinese brands are now playing at the next level of customer experience. They already know how to ride the digital bike, and are now on a cycling journey with the customer together. 

The whole journey is about building up mutual trust. Chinese brands are observing, listening, learning, sharing, committing and interacting closely with customers. They are fearless. The COVID-19 crisis helped Chinese brands to build on top of an existing culture of innovation, digital-savviness and customer-centricity to make every customer ‘a partner for life’ – to use the words of nexxworks Partner and CX expert Steven Van Belleghem. They are truly changing the way for brands when it comes to reaching, inspiring and building trustworthy relationships with consumers. Their full attention and speed of action revolves around three distinct customer-centric drivers to win over the trust of customers in a digital new normal: 

• Relevance,

• Reliability

• and Relationship (in this order). 

RELEVANCE – SOLVE REAL PROBLEMS FOR CUSTOMERS 

To understand and solve the needs and frustrations in the life of the customer, brands need to offer products and services which are relevant to them. Otherwise, brands are no longer trusted, regardless of their brand name. Most Western brands got burned at least once in China as they copy-pasted their Western advertisements for that audience. Chinese brands have learned to listen to their customers more carefully. The challenge for marketeers in China is scale and volatility. In a market of 1.4 billion people where nonstop change is a fact, most research or sales plans are outdated before they are implemented. 

This forces brands to rely on data to listen to the latest signals in the market. If you want to understand the wishes, dreams and worries of customers, there is no better place than China’s life-style superapps. China has a dozen or so life-style platforms beyond WeChat, such as AliPay, Douyin, Kuaishou, Meituan, Toutiao or Xiaohongshu. By sharing user journey data and insights, brands can learn about the changing needs and concerns of customers. 

Let me share two examples of how Chinese companies listen to customers to iterate products, services and communication according to the sentiments they receive back. The first example is about societal relevance; the second one about cultural relevance. 

Pinduoduo: social commerce for lower-income families 

Pinduoduo is the fastest growing social media brand in the world. They realized back in 2015 that although China had 700 million netizens, only half of them were buying online. The rest were people living in third, fourth and fifth tier cities in China who care more about the cost of vegetables or cleaning products than buying a new laptop or cat food online. All of them had a smartphone, but bought only at local supermarkets. For 350 million Chinese, the main relevance to not buy online had everything to do with price. 

Pinduoduo introduced a social commerce concept, where you can get discounts if you buy products in group with your friends or family through WeChat. In a really fun and socially-engaging way, millions of users started buying together to get more discounts, even free products. It is super relevant for the lower-income families, but also for smaller and local brands. By channeling analytics around consumer behavior and preferences, Pinduoduo now enables any brand to produce and sell products on their platform tailored to specific users’ needs. 

This accelerated the consumer-to-manufacturing (C2M) trend in China, where more and more factories produce only what is solving consumer needs today, not what brands believe the market would need in future. The factories are becoming brands and the platforms offer them market research.

Neiwai: a social movement of female empowerment 

Neiwai, which means ‘inside-out’, is a Chinese lingerie brand. Their focus is on liberating and empowering women with comfortable, functional clothing which accentuates the natural beauty. In the Chinese media, the harsh beauty standard for women is to have slim legs, a tiny waist and white skin. The result is that a very large number of Chinese women feel anxious about their body shape. 

By listening closely to the millennial and GenZ population online they noticed two more trends. Due to exposure to foreign brands, Chinese are looking for great design, but secondly, they are more willing to purchase ‘made in China’ products. With the input from netizens, NEIWAI launched a campaign for International Women’s Day on March 8th titled ‘#No Body is Nobody’. The hashtag has already gained 7 million views as the brand was able to resonate with many Chinese women who wanted to defy social expectations and become more assertive. The relevance of this brand lives on as a social movement of female empowerment and liberation from stifling past cultural standards. NeiWai states that its underwear is “not just made to be worn, they are Made To Live In”. They challenge traditional stereotypes by embracing body imperfections, making many Chinese women feel accepted while gaining their trust. 

RELIABLE – MAKE SURE CUSTOMERS CAN ALWAYS RELY ON YOU 

To ensure that customers keep trusting companies, being reliable is paramount. When Western brands talk about reliability, we refer to the quality of our products, processes, systems, etc. These are symbol for the quality of Western brands, which Chinese consumers love too. What we often forget is that most high-quality Western products are produced in China with excellent processes and systems too. Great quality is the new minimum offering that Chinese brands can already match with foreign brands. That brings me to quality of service and convenience. With an obsession of digital to earn the trust of customers, Chinese companies integrated digital into the life of consumers through as many touchpoints as possible. This is how new retail was born in China by merging offline-and-online. It offered consumers the ultimate convenience and a direct link with brands. 

China is a digital paradise for consumers. However, in uncertain times, reliability goes far beyond great products and service. It is now a synonym for flexibility, availability, sustainability and speed. Consumers in China are spoiled by brands who will do whatever it takes to enhance customer experience. During the pandemic, the extreme resilience of Chinese brands stood out compared to the rigidity of many Western brands when lockdowns hit them. 

In no time, brands and stores were livestreaming sales, retail staff was hired out to online platforms or turned into online personal shoppers, and organizations got reshuffled to deal with the new reality. Chinese brands’ readiness to think different and adapt quickly resulted in a fast recovery of consumer confidence and trust. The below two examples show how Chinese manufacturers became anti-fragile, to use Nassim Taleb’s concept of things that become stronger in the face of disorder. 

Huawei: investing in anti-fragile R & D 

Huawei is not the first name that comes to mind when we think of reliability. The distrust that the brand has encountered geopolitically, has made us look away from the excellence in quality that this company has to offer. With 200,000 employees of which half are involved in R&D, it is no surprise to see how they became the third largest R&D investor in the world last year. This is all just numbers. But are we avoiding the most important questions about Huawei? 

How can a global company that is being undermined by the whole Western world survive? Why did they increase investment in R&D with 28% in 2019 when global customers stopped buying? Why are engineers and managers sticking around? The answer is simple: anti-fragility. 

Huawei doubled-down since 2018 on sustained investment in R&D and talent to keep creating even more value for customers. This is how, even in 2020, Huawei kept growing and had net profit when all odds were against them. It takes boldness and bravery to not just manage a crisis, but see it as an opportunity. Their attitude to customer-centricity is to focus on becoming ever more reliable with their products and services, and there where politics is not an issue, customers still love Huawei as partner. 

Hai’er: delivering mass customization

Hai’er, Midea and Gree are the three Chinese home appliance companies that generated the highest revenue and were most profitable in 2020 amongst all white good brands globally. Their capability to reconfigure their organizations quickly was their secret to adapt to a high-volatile market during the coronavirus outbreak. 

The best case is from Hai’er, whose factories resumed to full capacity by the 25th of February 2020. The company is built as an ecosystem of thousands of self-managing microenterprises nurturing an entrepreneurial mindset with clear communication channels. Even though most of its production was shut down in China, due to its distributed governance model, they could reroute orders to factories overseas, and vice-versa later on. 

Hai’er’s customer-centricity model makes every customer a lifelong participant of their ecosystem through digital platforms. They drive regular engagements with users to get insights that enable them to make small improvements to products or services. This adaptive micro-innovation model, combined with its advanced IoT platform will enable Hai’er to deliver mass customization in future. This is how you become a reliable partner-vendor and it leads me to the last step in the customer-centricity process, which is to build a partner-relationship.  

RELATIONSHIP - DO CUSTOMERS FEEL YOU TRULY CARE? 

Assuming you are a most reliable vendor that offers the most relevant products, somehow you still need customers to feel you truly care. Chinese customers expect that you not only care about them, but also about the common good. Chinese brands saw the COVID19 crisis as an opportunity to build a rapport with their customers. In the West, the initial response felt much more company internal-oriented towards team, supply-chains and fix budgets. 

During the lockdowns, Chinese got very detailed daily COVID updates on all media and social apps; all Chinese masked up and stayed at home willingly; and existing digital services were quickly deployed and adopted nationwide. Yet, their trust in science, the government and the system made all the difference to combat the virus. More than a hundred million were locked down, but very few felt locked out as all essential industries kept open. They really appreciated the contribution Chinese brands made to help out; from Hai’er producing masks in their factories, Ant building QR health applications, JD.com deploying self-driving cars to deliver food in Wuhan, and many more. 

Many Chinese companies donated money, resources and services to the most affected areas without any hesitations. This resulted in an increasing preference for buying from local brands, especially amongst the younger population. Chinese consumers felt local brands in general were more sensitive to Chinese values, identity and purpose than Western brands. One could say that in times of crisis, one recognizes its true friends. Let me conclude with two examples that show how Chinese brands have built up the relationship and trust with customers during last year.

Perfect Diary: KOCs instead of KOLs 

Perfect Diary (PD) is one of the most disruptive five-year-old consumer brands in China. They embody the perfect combination of relevance, reliability and relationship. Consumers truly love them: the price is affordable, they are part of a close-knit community, and the packaging and product quality compares to those of L’Oréal or Estée Lauder. In contrast with Western brands, Perfect Diary never plays it safe. In their logo, “P” stands for “Perfection” and “D” for “Discovery, Different and Diversity”. 

When in China Western brands were all hiring Key Opinion Leader Influencers, Perfect Diary leveraged the grassroots Key Opinion Consumers (KOCs). KOCs are ordinary consumers whose key value is based on their relatability and trustworthy nature; not their large followers base like KOLs. Perfect Diary has managed to turn many of their buyers into live-streaming advocates. This is the trusted relationship consumers have with the PD KOCs that boosts private traffic on social media. 

Perfect Diary also created a virtual influencer, operated by many PD employees, to offer one-one-one customer engagements with customers and include them in a group chat community to share interests and beauty insights. When most of Perfect Diary’s stores were closed early 2020, beauty staff were all put to work live-streaming sessions. It was not about PR, but they answered questions, gave advice on how to stay safe, maintain hygiene and offered mental support for customers in confinement. Their sales sky-rocketed. It’s this personal touch and empathy that PD showed to millions of consumers individually, that was a testimony for their caring nature. 

Online platforms helping out the service industry

Online platforms in China came to the rescue of the service industry when they had to close their doors. Looking back, that industry in China survived quite well. That is partly due to online platforms that bailed them out in Q1 2020, as opposed to the local governments who mandated business owners to keep paying salaries. Alibaba’s Hema grocery stores and its delivery services hired thousands of staff temporarily from restaurants through a “sharing employee” platform they developed. 

The food delivery platform Meituan waived all Wuhan restaurant commissions during the lockdowns and even gave a 40,000 Euro pay-out to a legal beneficiary of any restaurant owner or employee that died of COVID-19. JD.com which is the only e-commerce platform that fully operates its own logistics, helped farmers to sell and deliver their produce directly to consumers. Dozens of initiatives that the tech giants launched - from interest-free loans, waiving service fees to not raising product prices - kept many SMEs alive. 

Moreover, new philanthropic foundations were set up by Tencent, Alibaba and Meituan reaching over 200 million Euros that were donated to people affected by COVID-19. More importantly, as Chinese super platforms offer services for every moment in people’s life, covering every industry imaginable, they had a unique position to use their resources to help millions of SMEs and businesses to survive. These online giants took their responsibility to act as a true partner-in-life of customers and consumers during a period of deep crisis. 

This inclusive, collaborative, altruistic mindset is seldom how we think of China, but it’s probably the most powerful force of Chinese brands. They are more than aware that in times of crisis, every partner, customer and community will be judging these brands on how much they truly care. It’s their moment of truth.