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Customer Centricity

Customer Centricity means putting your customers and their needs at the center of your organization, and consistently supporting that perspective through your people, culture and how you do business[1]

Customer-centricity is the discipline of attempting to see things from the customer’s viewpoint rather than from your own and the goal is to keep the customer’s viewpoint and the customer’s ultimate wellbeing at the center of everything a company does.


Customer Centricity Model
source: Insites Consulting


Customer Centricity - Transforming the Organization[2]

Customer-centricity matters in all aspects of an organization. But since “everywhere” can so often devolve into “nowhere in particular,” an organization look at becoming more customer-centric in the following three areas:

  • Product: What we manufacture. A generally brilliant product design that doesn’t incorporate initial customer input or respond to customer feedback over time is destined for the junkyard, or at best to be found in a museum as an oddity, rather than opening customers’ hearts–and wallets–and finding that proud place in the customer’s garage or driveway.
  • Process: How we manufacture, how we sell. Over time, processes can devolve in directions that no longer suit your customers–assuming they were even designed with the customer in mind in the first place.
  • Business Model: How our company is conceptualized. In most organizations, there are aspects of the business model conflicts with customer-centricity. A simple example is an incorrectly incentivized sales model, where rewards conflict with doing the right thing for the customer.


Customer Centricity Vs. Product Centricity[3]

Don Peppers explained the difference between customer-centricity and product-centricity on LinkedIn a while ago. Product-centricity, he says, starts with having a product or service that responds to customer needs and then getting as much customers as possible who have these needs. Customer-centricity starts with the individual customer and aims to meet the needs of that customer everywhere (all divisions) and as much as possible. So, both are not in conflict, strictly speaking.

Customer-centricity also means having a decent product or service to start with. If you look at product-centricity as focusing too much on the product instead of the customer, then you fail of course. No one buys a product that doesn’t respond to needs. Furthermore, customer-centricty 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-centricty looks at the total customer life time value.

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 life time 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.

Customer Centricity Vs. Product Centricity
source: Don Peppers

By using the graph above to contrast customer centricity and product centricity, the difference between these two competitive strategies is obvious:

  • A product-centric competitor focuses on one product at a time and tries to sell that product to as many customers as possible.
  • A customer-centric competitor focuses on one customer at a time and tries to sell that customer as many products as possible.


See Also

Customer Centricity is a business approach centered around creating a positive experience for the customer at every point of their journey with a company, from initial awareness through post-purchase support. This strategy involves placing the customer at the core of every business decision, operation, and strategy to build long-term relationships, enhance customer satisfaction, and drive loyalty and advocacy. Customer-centric means understanding customers' needs, preferences, and values and tailoring products, services, and interactions to meet those needs.

  • Customer Experience (CX): Discussing the sum of all interactions a customer has with a company and its products or services over the duration of their relationship, highlighting the importance of a seamless, positive customer experience in customer-centric strategies.
  • Customer Relationship Management (CRM): Covering the practices, strategies, and technologies that companies use to manage and analyze customer interactions and data throughout the customer lifecycle, aiming to improve customer service relationships and customer retention.
  • Voice of the Customer (VOC): Explaining the process of capturing customer's expectations, preferences, and aversions is essential for businesses aiming to be customer-centric by truly understanding and addressing customer needs.
  • Customer Feedback Loop: the structured process of asking for, analyzing, and acting upon customer feedback. Implementing effective feedback loops is a key component of customer-centricity, enabling continuous improvement based on customer insights.
  • Personalization: Covering the practice of tailoring products, services, and communications to the individual needs and preferences of customers, a hallmark of customer-centric businesses.
  • Customer Journey Mapping: Explaining the visualization of the process a customer goes through to achieve a goal with a company, highlighting how understanding this journey is critical for optimizing customer interactions and touchpoints in a customer-centric way.
  • Customer Lifetime Value (CLV): the total worth to a business of a customer over the whole period of their relationship. Customer-centric approaches often focus on maximizing CLV through enhanced customer satisfaction and loyalty.
  • Segmentation, Targeting, and Positioning (STP): the process of identifying specific groups within a market, targeting these groups with specific products or services, and positioning them in the minds of consumers, emphasizing the role of customer-centricity and ineffective market segmentation.
  • Brand Advocacy: Explaining how satisfied customers can become brand advocates, positively influencing others about a brand or product. Customer-centric businesses often experience increased brand advocacy due to high customer satisfaction.
  • Omnichannel Strategy: Discussing a multi-channel sales approach that provides the customer with an integrated shopping experience, a key aspect of customer-centricity ensuring consistency and connectivity across all customer interactions.
  • Net Promoter Score (NPS): Covering a metric used to measure customer loyalty and satisfaction based on the likelihood of customers recommending a company's products or services to others. NPS can reflect the success of customer-centric strategies.
  • Service Design : Explaining the process of designing services to meet customers' needs and deliver value, focusing on the quality and interaction between the service provider and customers, crucial for businesses adopting a customer-centric approach.


References

  1. Definition - What does Customer Centricity Mean? MCorpCX
  2. Where can an organization be transformed via customer-centricity? Forbes
  3. How does customer-centricity vs product-centricity benefit a company? i-scoop