Why "People First" Is Better Than "Customer First"

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1:33There's no safe like SimpliSafe. From Entrepreneur Media, this is Problem Solvers, a show in which entrepreneurs do what entrepreneurs do best, solve unexpected problems in their business. We were completely wrong. And I'm just like, it's not selling. It was like we have to start from scratch. I'm Jason Pfeiffer, the editor-in-chief of Entrepreneur Magazine.

2:21different depending on which one you picked. That kind of thing where maybe a small word choice is different. An idea is just slightly different. And at first you think, ah, these are the same. These are the same things. But no, they're not. Because when you scale them out, it turns out they can make a really big difference like this. Being customer first and then being people centric. Customer-first and people-centric, or customer-first and people-first, however you want to put it. I mean, kind of sounds like the same thing, right? Isn't a customer a person? But there's another way of looking at it.

3:03And this, by the way, is Ra. So Jason, my name is Ra Mitani, and I am the head of marketing in the U.S. for Alibaba.com. And I met Ra over the summer in, of all places, Las Vegas, because Alibaba had put on a customer conference out there and they had hired me to come speak at it. It was a great event. And Ra and I were talking afterwards and he mentioned this distinction that he sees between customer first and people first. And I asked him to expand upon it. And eventually I said, wait, wait, wait, we just have to talk about this on the podcast because it's so interesting. And to really appreciate it, let's back up.

3:40We'll get to it. But first, here's where Ra is coming from. So I spent most of my career, Jason, in the automotive world. And I actually started prior to getting into automotive marketing. I went to school to be a designer. My thing was I had to design sneakers or cars. And I stumbled into the world of marketing. And I think through my career, I've been really lucky in that I've grown in the world of marketing. I've understood more and more. But a lot of my foundation is trying to understand people, where they come from, how they react to things, and then building around that. Is that the bridge, would you say, between your background in automotive and Alibaba, which does many things, but making and selling cars is not one of them?

4:26It's a good question. I think the bridge between almost any world can be understanding people, right? There's a measure of understanding customers, and then there's a measure of understanding people. And when you think about the psychology of how people react to things, how they do things, what makes them tick, then you can bridge almost any world together. So now you see where we're going with this, what People First really is. It's not just about serving customers. It's about understanding the humanity of those customers, because that is how you really connect to them. That's the conversation that Ra and I had for Problem Solvers.

5:05He has so many great examples, really made me stop and think, all coming up after the break. I lost my job in 2008, right before my wedding, actually. Getting let go would turn out to be my first step toward passive income, a fluid and dynamic way of earning income while changing lives at the same time. I found that online businesses are the best way to do that. It completely changed my life. My name is Pat Flynn. I created the Smart Passive Income Podcast back in 2010 for anyone who's ever felt even a little bit like I did when I got let go. People who want to create and sustain a passive income stream online so they can spend more time with the ones they love, achieve the lifestyle they desire, and turn their passion into a thriving business.

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6:16All right, we're back. I'm talking with Rob Matani of Alibaba. And to start, I told Rob this. I said, look, I hear the phrase customer first or customer obsession a lot. Amazon, for example, always presents itself as being a customer first company. I remember talking to the president of Reebok, who talked about the customer obsession that infuses his company. And I've always thought that that's a pretty good way of thinking about the business that you're in, of being obsessed with your customers. So what does it mean to use the word people instead? Well, you've painted a nice picture here, right?

6:54A lot of companies center themselves around being customer first and being customer obsessed, something that we also do at Alibaba Group as a whole, is incredibly important. I think the marriage between being customer first and then being people centric is the distinction in my mind that makes it truly important. So what do I mean by that? In short, kind of a customer first strategy is either marketing or building products or creating experiences that are built around your buyers or your customers' specific needs. Then as you transition into a people first strategy, you really try and understand the human experience.

7:35How can I build elements of my products or elements into my communication that makes people feel understood and seen? When you do that, that's where the magic happens. can you give a concrete example of that because that's a it's a really wonderful distinction but it also feels a little abstract right like what you're drawing out here is the difference between a customer and a person a person is a customer but a customer is a limited understanding of a person so what does it mean to think more about the person first and then the customer as one representation of that person. I would start one step back from that and say, hey, let's define a few really simple examples of what I'd view as a customer first strategy.

8:26From a customer first perspective, I want to make sure that my buyer feels like or my customer feels like as they're browsing our site, they have what they need or what they expect from our company. And sometimes you go above and beyond that. You offer protections. You mentioned a couple of great retail partners that offer you fantastic protections in your buying journey, a 30-day money-back guarantee, a free 30-day trial of our product. Those are customer-centric or customer first ways to approach things. But maybe I'll give some real-world examples. Let's try three examples of people first ways to approach things.

9:07Great. I start with Apple. I think Apple really masters this specifically from a product design perspective. So just think about the lid of your laptop. And as you try to open the lid of most laptops, they are often made out of plastic. The hinges are not weighted properly. So you need to use two hands or unclip a little latch to open that laptop. But Apple thinking people first is saying, hey, people are carrying things, they're on the go, they're going between meetings, you're a creative, you're sketching something. You want to be able to open that laptop with one finger. And Apple matched mastered that with the little notch where the screen meets the keyboard, but also the weighting of that hinge.

9:53It's just a beautiful people first understanding, right? And you're not necessarily winning customers in the near term by doing something like that. But then the beauty you experience in having that with you every single day and then trying a different product, you lose something in there. That's part of the people first example. Before you move on to the next, can I just say, I have literally never thought about that little design feature. But of course, as you're saying it, I am in front of my MacBook Pro right now and I'm looking at it and I'm thinking about how I use it every day that you couldn't really build a marketing campaign around it, right?

10:33That can't be a customer first thing in that I don't, it would seem ridiculous, in fact, if that was on a billboard. But it is a hidden, don't even think about it kind of feature that makes the product better for me as a person. So it's a really great thing to zoom in on. Yeah. And as you say that, it's really important to know that whether you have a customer first or a people first strategy or you marry them together in a really magnificent way, without talking to your customers, you're not going to be able to build those customer first components. and then without digging deeper into, hey, Jason, who are you as a person?

11:18What's going on in your daily life outside of everything you do for work? You're not gonna understand those people first components that build the magic, if you will. And in being at Alibaba.com, out of any role I've had in the past, any company I've worked for, we actually spend the most amount of time talking face-to-face with our buyers. We wanna understand them as people and then build our products around that. So let me actually give a few more examples before I get to the practice that we put it in today at Alibaba.com. Great. So let's think about the touchscreens that feel natural to us today, right?

11:59Jason, you and I have talked about, we both have kids. And a very interesting thing is that kids can naturally master a touchscreen. They watch us using it. But for our generation, as we got introduced for touchscreens, I don't think we realize this, but there's a people first reason that we can use them so seamlessly. It's because we were taught how to use them. If you think about the original iPod, it had a physical moving click wheel. Yeah. And then that click wheel turned into a touch wheel. And then that touch wheel turned into more touch elements embedded into a screen or portions like non-physical buttons.

12:44Then we got touch screens. And Apple does a really good job of just teaching us how to get to where the end state is. We might envision the end state, but we have to know that people aren't ready to make a jump from a physical click wheel all the way to a touchscreen in a single generation of a product. So even if you know where you're going, you have to walk people there. It reminds me of a line that I use a lot when I speak on stage, which is people don't like new things. What they like are better versions of old things. So you have to start with the thing that they're comfortable and familiar with and then present them with something that feels like basically the same thing, but a better version of it.

13:29And instead of replacing everything that they know. And it's true. I hadn't really, again, hadn't thought about this until you bring it up, but I remember those intermediary steps. And those intermediary steps felt totally natural to me at the time. Now they seem absurd and antiquated, but we needed them. And I suppose that was because the team there understood fundamentally what kind of creatures they were selling to. And they were selling to human beings who have particular expectations and ways of adopting new behaviors. Yeah. Yeah, you're spot on. Now, I have another fun one in mind. Yeah.

14:11We both have kids and I've watched my son. I have a 20 month old son. I've watched my son interact with various objects very clumsily. And I read an interesting design report that initially when toothbrushes were designed for children, they were just shrunken versions of adult toothbrushes. what you picture in your mind as a typical toothbrush, skinny handle, small head, children's toothbrushes, they just shrunk them down and gave them to kids. But kids don't have that dexterity to be able to hold and utilize such a skinny small object. So there's a design firm called IDEO, and they were hired to develop a toothbrush that fit for kids.

14:59And they took that human understanding, that people first understanding and said, hey, kids aren't prepared for this. They're making messes. They don't have the dexterity. We need a wider handle, a slightly larger head, bright colors. So they they're seeing the fun and are attracted to it. And now you have the model for what all kids toothbrushes look like and feel like today. There's texture in the grip. There's the wide handle, the larger head. And that came from a people first understanding. It's not just saying this works for adult people. It's understanding the kids, the smaller people, and seeing how they interact with the world to develop a product.

15:39And yet, as you will learn as your 20-month-old grows up, shocking number of years will go by before your kid will just brush their damn teeth. You have to every morning and every night. It doesn't matter how good the toothbrush is, though I agree. It's a lot better than what you're originally describing. But, Rob, this is interesting because the things that you're highlighting, they all work because they're intuitive to the user, even though they weren't intuitive at the point of creation. And I bet that as people are listening to this, they might think, but what is the opposite of that? Like, what's the customer first version of those examples that don't necessarily work?

16:20Like, is it that when you lock yourself into the idea of thinking of people as a customer, then what you end up doing is trying to think, well, how do I just sell as many of the thing that I made to them as possible instead of stepping back and saying, what's the version of this that people already want? Like, what's the opposite of the stuff that you're presenting? Yeah, it's a hard question, but I think if we distill it down to, like, who failed at it without calling anybody out. Sure. We don't want to talk negatively about anybody, but who failed at it? Let's just use an example. I actually have a really good one for my everyday life.

16:58A large transportation company used to have a bus that served my town. and slowly but surely they reduced the number of routes that they had and there was little to no communication with people about it and then a couple months go by they removed all service from my town and people are left wondering like how am I supposed to get into New York City to do my job now and for context I live really close to New York City so transportation from suburbs into Manhattan, really, really important. Right. And just for context, a lot of people live in New Jersey specifically because there's some form of regular transportation into the city and that's where they work.

17:44And then they go and enjoy the more space and higher property taxes in New Jersey. Yeah, exactly. Yeah. The exact life that I enjoyed today. So to me, that's a failure to customers and to people, right? It's not communicating at all. We have no understanding about why did this bus service leave? Something that some people relied upon. So then how do you understand the failure in that? Well, new bus service enters our community and they start communicating with us via email in a way that I have seen almost no company do in the past. And this is a very key example of people first versus customer first.

18:30On a weekly basis, I would get an email from this bus company and they would say, hey, we are running this route. It is an exact replica of the route of the bus company that left your area previously. However, we are seeing this much ridership. So our buses are X percent filled and we are losing this much money on every single route that we run because of toll costs. gasoline costs, driver costs, and bus rentals. Great. Now I know exactly what's happening. The next paragraph tells me, hey, we need this many more riders to break even. At break even point, we feel comfortable continuing to service you.

19:10If your loyalty continues, we think we can turn a profit in two quarters. That is a people first way. I want to be spoken to like, one, I'm an adult. I don't need you to sugarcoat things. I don't need you to tell me that You're making something up. I don't want to feel like you're blindsiding me with fake information or something like that. So I think a really pointed example of how do you take another company's failure and flip it into your success by just understanding how people want to be communicated to. So what's so interesting about that example, and it's a great one, is that both of these companies, the one that left and the one that came in its place, both these companies want customers.

19:53They are oriented around customers. People don't take the bus, then there's no business. The decision that seemed to be made from the first company, we can only be left to assume because we don't know, was that they looked around and they said, you know what? Our customers just aren't here. I guess we'll go where our customers are. And presumably they didn't go out of business. They just went somewhere else. They went to towns that had more ridership. This new company comes in with a different approach. And that approach is, well, you know, I don't see customers, but what I do see is a lot of people.

20:25And maybe those people want to be customers, but they don't know. They don't know the situation. They don't know what's going on. And they, like you said, want to be spoken to like adults. And so this new company just kind of starts a conversation with the people that they see. And that conversation with people, I'm going to guess, created more customers. Exactly. Yeah. That's exactly what happened. And now their ridership is at a minimum of 100 % capacity on all their buses. Minimum of 100%. How can it be higher than that? Well, there's waiting lists that they have in place and they explain to us why.

21:00So yeah, they won the people first strategy. That's incredible. You had said earlier in the conversation, so you laid out a couple examples, which I love. You said earlier in the conversation that as you at Alibaba think people first, that you've had more interactions with customers than you have had in previous roles. You guys are always talking to people. What comes out of that? What's that process like for you? So we make sure that we do physical events and then we do a lot of online communication with our customers. Now, primarily through those physical events, meaning we are present at a variety of offline trade shows or we host our own events where Jason, you and I met.

21:40Yep. We spend a lot of time just going directly to those people, introducing ourselves, saying, hey, we're a representative for Alibaba.com. We would love to know more about your business. We start there. It's always about, hey, what do you do? How have we been valuable to you? And how can we be more valuable to you? And through those types of conversations, you really start to understand, hey, there's some deficiencies that we can fit. Or there's a better way to approach a certain tool. And I actually have a really cool example for you with a very specific tool that we have that without customer conversation, we wouldn't have been able to evolve it to where it sits today.

22:19Cool. Yeah, what's that? So that tool, it's called RFQ. It's request for quotation. And if I take a step back from there, our entire business is built around connecting buyers or small business owners from around the world with the world's largest collection of global suppliers. Both the buyers and the suppliers are using our platform simultaneously. They both want to reach each other. So there's a lot of mutual benefit. However, you go to a diner and you realize that you're overwhelmed by too many choices. And the same thing happens the larger a company scale, the more choice you offer consumers, the more overwhelmed they can become.

23:06Yeah. We quickly realized, now customer first, we quickly realized for our customers, we needed to correct that. And we introduced this tool called request for quotation. and essentially it boils down to we allow you to reach out to many of our suppliers at once with a singular set of requirements on what you want to create, what product you want to build, allow multiple suppliers that fit that expertise to come back to you with that quotation. Now, we iterate on that tool all the time and in my view, very customer first way to do things. So what I mean by that, we've introduced predictive sentence completion within that tool.

23:50And that tool requires you to type in your product requirements, every detail and spec that you expect out of it. But because of our expertise in the industry, we can predictively complete the sentences that you're filling in. So you could just tell me, I want to create a rolling suitcase with a leather handle. And now, Jason, you don't have to type in all the detailed specs, the size, the materials, the thickness, the shipping time. We're going to predictively complete all of that for you. Oh, interesting. A couple of human components of that that we quickly realized. And one of the current sort of deficiencies with some AI tools is that it takes the human element out of creation.

24:33So if you look at here's a little nested loop, if you think about the IKEA effect, I don't know. Have you ever heard of the IKEA effect? I have, but I can't remember. You're going to have to fill it in for me. For me, the IKEA effect is that I am reminded anew every time about how much I hate assembling things myself. That's my IKEA effect. But what is it? You have the, I guess, the opposite impression of what psychologists determined from IKEA products and similarly Lego. But in short, the effect is that the value of self-made products is increased when you have to build it yourself. Oh, yeah, that's right, right.

25:17Which, by the way, do you know this about the baking mix industry that they discovered decades earlier? You know, you buy a cake and... Or you buy a cake. You buy a cake mix and you take it home and it's a mix and it's basically a bunch of powder in a bag and you put it in a bowl and you got to add water and an egg and some other stuff and you whip and now you got a cake. so they could make the egg baked into the powder. You don't need to add the fresh egg, but they found that people valued the cake more if they added the fresh egg themselves because it seemed like a more homemade thing. And so they started making the thing a little more complicated to make and people actually valued it more.

25:58So yes, it is possible that I am just the outlier here. But yeah, that's really interesting. So sorry, continue. Yeah, I mean, that's it. That's the Ikea effect, why the DIY industry is so great. And yeah, to your point, why should I buy refrigerated, pre-shaped cookie dough that's unbaked when I could just buy the ready-made cookie? But there's something about buying that that makes me happier, right? Yeah, yeah. And that's the human element that we kind of latched onto with our RFQ tool. As people are going in and we're auto-populating these fields, well, damn it, they want that control back and they want to be able to edit portions of it.

26:37So we allowed that. But then we want to step further and we realize that as these people are creating these requests for quotations that go out to suppliers, there's a bit of a difficulty that they have with the image generation. So what did we do? We actually enabled the ability to predictively create the image that they want to create based off of all of their inputs. And this again comes back to, right, Jason, we talk to our buyers. We want to understand what they need. And then we want to develop our tool based off of that. Right. Because ultimately your buyers are not people who it's like, but they're not are machines that know how they're not like human machines who know how to develop product in a very technical specific way.

27:24They're like humans who have an idea for a thing that they want to get made. And those are somewhat different things. I have certainly, I'm not in any kind of product development, but I can think of, for example, times where I wanted to advertise something that I made, a book or a podcast or something, and I would go to some platform. And it would require me to create this hyper-specific thing with these different pixels and this level of size. And I was so annoyed because I'm a person who just made a thing and I want to market it. Well, I don't know how to make all this. What I really want is for you to just make it for.