Towards Balanced Centricity: Moving Away from Customer Focus

It is an undisputed truism that service providers need to be customer-centric to be successful. This kernel of wisdom is more and more finding its way into the discourse on water utility management. While this statement is indisputable in a competitive environment, its application to public services such as water utilities is not beyond doubt.

Some contemporary marketing scholars are reconsidering the primacy of customer centricity and introduced the concept of Balanced Centricity. Total customer centricity is a limited foundation for service provision because full implementation risks the sustainability of the organisation.

Balanced Centricity

Services are not created in a dyadic relationship between the customer and the service provider but through a network of activities involving a range of diverse stakeholders. Each stakeholder within the network is a beneficiary of the activities of another stakeholder. Value is co-created between the service provider and the beneficiary. Customers are not the end-point, but also maintain their value chain. Water has no intrinsic value in itself, and its value proposition is only realised when consumed. The value chain for water utilities thus extends far beyond the customer tap. Most customer taps are used by multiple people who use the water to achieve the 3Cs: Comfort, Cleanliness and Convenience.

Balanced centricity: example of a value creation network for water utilities.

An example of a value creation network for water utilities.

As public service providers, many aspects of service provision are dominated by professional judgement, such as public health considerations, which cannot be considered the domain of consumer experience. Tap water is an undifferentiated service where natural monopoly provisions prevent utilities providing individualised services. Customer centricity in public utilities is thus limited to those aspects that consumers are capable of influencing.

Balanced centricity is a situation where all beneficiaries in the value creation network have the right to satisfaction of what customers need and want. Regulators are a principal beneficiary within the value creation network for utilities. Water utilities service them through information provision. The environment is also a significant beneficiary of water services, which in Australia is managed through environmental water allocations.

This brief outline shows that being customer-centric is not the sole focus of public service organisations. Public service has inherent limitations on the extent to which consumer judgement can be incorporated in service design. Also, the value creation network perspective shows that the consumer is only one of the many beneficiaries of the value creation process.

2 thoughts on “Towards Balanced Centricity: Moving Away from Customer Focus

  1. Thanks for sharing this. City West Water has a strategic objective to “put customer value at the heart of all we do”. Engaging CWWs people, both customer facing and asset-centric staff, to bring this objective to life has been a recent focus of mine. The idea of a complex network of stakeholders co-creating value definitely aligns with my thinking so far.

    Do you have any thoughts around measuring value co-creation? How does this networked understanding of value co-creation intersect with customer satisfaction surveys or measurements of willingness to pay?

    • Hi Phil,

      I have not given much thought yet to measuring co-creation – an interesting concept. Firstly, value is always uniquely defined from the perspective of the beneficiary. Following the definition of balanced centricity, the value for each network actor need to be measured in accordance with each relevant perspective, e.g.:
      – Customer surveys
      – Water utility financial indicators
      – Water resource indicators
      – Compliance with regulation
      – And so on

      The point I am trying to make in this post is that we need to look after all stakeholders. There are many reasons why we cannot implement what customers want. Since I wrote this post I have further developed these ideas. My book on the topic will soon by published by the International Water Association. I hope we’ll bump into each other soon to have a chat.

      Peter

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