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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
Customer Acquisition Cost (CAC)
Customer Churn
Customer Data Integration (CDI)
Customer Data Management (CDM)
Customer Demographics
Customer Due Diligence (CDD)
Customer Dynamics
Customer Effort Score (CES)
Customer Engagement
Customer Engagement Hub (CEH)
Customer Experience Management (CEM)
Customer Lifecycle
Customer Lifetime Value
Customer Loyalty
Customer Needs
Customer Psychographics
Customer Perceived Value (CPV)
Customer Retention
Customer Service
Customer Service Management
Customer Relationship Management (CRM)


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