What Does Maslow’s Hierarchy of Needs have to do with Industrial OEMs, Digitization of Customer Experience & Installed Base?

Blogs | | Jun 2021

Maslow’s Hierarchy of Needs have to do with Industrial OEMs

TL;DR

  1. Maslow’s hierarchy of needs is a good framework for understanding how companies think
  2. Providing “food shelter water” is critical before satisfying higher levels of needs
  3. The high visibility projects of digitization (IoT, Servitization, sophisticated eCommerce, etc) are definitely in the upper tier of needs

I have a feeling that this analogy is going to cause some raised eyebrows in the Industrial OEM world. After all, what does a theory of the psychology of human motivation have to do with an OEM’s installed base?

A lot, as it turns out. Over the past two decades of working in the greater Industrial OEM ecosystem, I have been surprised by the lack of sophistication amongst many companies to truly understand and characterize their entire Installed Base, not just their top customers. This shortcoming is particularly severe in smaller OEMs, but not exclusively so. 

But with the huge emphasis placed on digitization of customer experience, Installed Base is having its moment in the sun. Of course, with sunlight comes a harsh spotlight on many of the shortcomings that were present in the past, but now need to be fixed (and fortunately, with software and AI advancements, they can be addressed more effectively now).

One of the starting point fixes is hinted at in Maslow’s hierarchy of needs. Specifically, the first four levels are termed deficiency needs in his framework – which arise due to deprivation and are said to motivate people when they are unmet. Also, the motivation to fulfill such needs will become stronger, the longer they are denied. For example, the longer a person goes without food, the more hungry they will become. 

But Maslow also said that these needs should be satisfied before the next level needs are addressed, though not exclusively so. Once these deficiency needs are *more or less* met, people start focusing on the last level, the growth needs.

How does this relate to digitization of the customer experience? Quite simply, the “food, water, warmth and rest” of a customer experience initiative starts with making sure there is a single source of trusted, complete customer data as a foundation of all these efforts. Without investing in this strong foundation, the next few levels of customer needs will be hard to meet – and many innovation investments will end in failure (or dramatically under-deliver) because they are built on the unstable foundation of poor and disconnected data. In fact, the longer an OEM goes without satisfying these basic needs, the more hungry they will become to satisfy these while becoming less likely to reach the highest level of potential. 

But if it is so obvious, are companies investing in it? Unfortunately not as much as you’d think (or want to see). Very often OEMs race to design and deploy a digital customer experience initiative – maybe around ease of ordering, self-serve portals, or IoT, etc. You will notice that these are all ingredients to acquire new customers, but aren’t particularly focused on retaining existing ones. Customer experience is more than these ‘in-trend’ ideas – it is about truly understanding a customer relationship, anticipating their needs, about highlighting recommendations that make their lives easier – or it can be as simple as a seamless omni channel experience. Easy to say, hard to do.

My recent article highlighted the problems caused by this disconnect and the challenges that need to be addressed. It is never too late to begin the journey because as the Chinese proverb goes, “The best time to plant a tree was 20 years ago. The next best time is today”.

 

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