What is customer-centricity?
Customer-centricity, also known as client-centricity, is a strategy and a culture of doing business that focuses on creating the best experience for the customer, and by doing so builds brand loyalty. Customer-centric businesses ensure that the customer is at the center of a business's philosophy, operations, or ideas.
As a term, customer-centricity first trended when organizations started adopting customer relationship management and vendors of CRM software used it a lot. Last but not least, there’s the definitions given by smart marketers that shed another light on it and make it more tangible.
How does customer-centricity vs product-centricity benefit a company?
No one buys a product that doesn’t respond to needs. Furthermore, customer-centricity doesn’t end with buying products. It’s part of a bigger picture. You want customers to buy again, you want to reduce churn. So, customer-centricity looks at the total customer lifetime value.
Product-centricity starts with having a product or service that responds to customer needs and then getting as many customers as possible who have these needs.
Customer-centricity starts with the individual customer and aims to meet the needs of that customer everywhere and as much as possible. So, both are not in conflict, strictly speaking.
What’s more important is that the financial objective for a company that competes in a product-centric way focuses on optimizing value created by each product, while customer-centricity focuses on optimizing value created by each customer.
And that’s a crucial difference. It’s where the customer lifetime value comes in, where customer service comes in, the customer experience, the full end-to-end picture. The buying again, most of the advocacy, the retention and loyalty, etc.
What are the benefits of customer centricity?
Companies choose a customer-centric approach for several reasons, but the biggest one is that new customers are hard to find. Unless you are providing a brand new good or service, the majority of customers evaluate your business against competitors or equivalents. For example, consumers typically compare the pizza shop at one end of a street to the pizza shop at the other end.
Acquiring new customers is generally expensive, requiring the issuance of discounts or promotions. So a business makes more by keeping the customers they have and selling them more. For example, a pizza shop adds pasta and drinks to its menu, gaining more of its existing customers' restaurant budget. A financial advisor adds an estate planner, retirement specialist, and tax advisor to the team.
A more concrete example is Apple builds a smartphone and then creates a closed ecosystem around it to maintain a seamless and safe user experience. Customer retention is not as simple as the examples provided. It takes thought and careful consideration of the customers' needs, both anticipated and real. So there is just as much effort given after the sale as it is before to attract new customers, maintain an existing customer base, increase loyalty, and drive profits.
Locking in customers with superior service is the go-to strategy for client-centric companies. They strive to create an experience so good that their customers can't imagine receiving the same level of support and attention from any other company.
Of course, there are natural limitations on how many products and services one company can offer while maintaining superior quality. Some client-centric companies expand their suite of services too broadly, eroding the core services that made them outstanding in the first place. As with any approach, taking it to an extreme is as dangerous as not practicing it at all.
How do you become a customer-centric company?
Becoming a customer-centric business allows you to anticipate customers' needs and delight them with products and services.
As an example, Apple’s entire strategy revolves around customer-centricity. Their product makes customers fall in love and their Apple Centers provide world-class customer support to help them get set up and out the doors with a smile on their face.
Thus, a customer-centric brand creates products, processes, policies and a culture that is designed to support customers with a great experience from initial discovery to point of purchase and beyond.
To achieve better customer-centricity, here are four best practices to help your business stand out:
1. Hire for customer success
Employees are the front-facing workforce that will shape many of the experiences with customers. Regardless of role, focus on hiring talent that can be aligned with customer-centric thinking and the importance of customer experience at your business. Customer success should be your overarching goal, because if you don’t focus on helping your customers achieve their goals, you can’t consider your company to be a customer-centric organization.
2. Put relationships first
Customers are not numbers to be measured and analyzed in a revenue performance report. They are people and benefit greatly when you establish a mutually beneficial relationship together. You can’t just have a transactional approach towards your customers. You need to focus on creating long-term relationships with your customers by helping them get as much value as possible from your offerings.
3. Democratize customer data
Adopting a new customer-centric strategy requires centralized access to customer data and insights. Having a CRM database can help facilitate a better understanding of customers to provide a unified front that delivers better customer experiences.
4. Connect company culture to customer outcomes
Employees will be motivated by a customer-centricity strategy when actions can be linked to results. For example, strategies to reduce customer wait times or making transitions easier for a customer can be captured in real-time to highlight successful strategy implementation.
5. Listen to your customers
Don’t just hear what they are saying, actively listen to them. When you collect customer feedback or get reviews, don’t just leave them unread. You need to read them and act on them. You need to show your customers that their opinions matter and that you are taking their suggestions seriously. You want your customers to feel heard. Simply collecting customer feedback and not acting on it makes your customers feel like you do not care about them.
