The modern business ecosystem is prone to constant change and fluctuation—trends and ideas come and go, but occasionally, some of them become long-lasting underlying principles. One of such principles that stands out the most is that customer-centricity is key to a company’s success.Customer-centricity isn’t really a new idea. Its foundations were laid way, way before the digital era, but it’s also safe to say that it has taken on a unique shape in recent years—more companies invest into CX than ever before. Plus, it’s fair to say that those that choose to incorporate this practice into their day-to-day decision-making enjoy greater returns, customer loyalty, and overall market share.However, customer-centricity is often treated in a somewhat reductive manner because it can easily be confused with the relevant yet simplistic idea of “the customer is always right." In fact, this practice is far more complex and demands a considerable commitment both in terms of mindset and business operations.So what does being customer-centric actually mean, and how do you even start working towards becoming an organization that puts its customers in the driver's seat?In this guide, we'll cover the basics of the practice and offer some concrete advice on building a customer-centric culture so that you and your customers can thrive in the long run. We also offer a template for gathering feedback during your research, which you can find below.
Alright, so what is customer-centricity?
At its core, customer-centricity is a shift in business thinking that emphasizes your customers' wants and needs. It's also about making decisions based on how they will impact your customers first and foremost.Customer-centricity requires you to think differently about how you do business with your clientele. Often, this means thinking about the long-term benefits of building strong relationships with your customers over short-term commercial benefits. This approach can be pretty demanding, but the payoff is a comprehensive experience that ensures that the people you cater to will be more likely to become long-term, loyal clients. At the end of the day, being customer-centric can make businesses up to 60% more profitable, according to some reports.However, it’s important to underline that customer-centricity isn’t just one thing. It encompasses a wide array of aspects, such as the voice of the customer (VoC), user experience (UX), and user-centered design (UCD), applied throughout the entire customer experience.It can also be defined as an organization’s ability to understand the needs and demands of its clients, competitors, stakeholders, and society as a whole. As a result, this allows balancing these factors, responding creatively, developing products that meet the customers’ needs, and earning their loyalty.
Customer-centricity in practice with Ferdinand Goetzen of Reveall
Ferdinand Goetzen, CEO and Co-Founder of Reveall, explains how teams can start actually centering their customers by adopting certain practices that will help you collect, analyze, and interpret customer insights on a regular basis.
Why is customer-centricity important?
The benefits of being customer-centric are well documented. Research shows that businesses that employ a successful customer-centric approach have a higher bottom line and suffer less impact during economic downturns. As mentioned above, customer-centric companies are simply more successful across the board. Let's explore some of the reasons why businesses need to center their attention on customers.
Customer-centric companies are viewed as more innovative, they grow more rapidly and are able provide better products and experiences than their competitors. These days, consumers have seamless access to information and their expectations of companies are higher than ever before. Studies have shown that 76% of consumers expect companies to understand their needs. Being customer-centric has become a major factor in many companies’ approach to branding. If your brand is how you wish to be perceived by the market, then you will want you brand to present your solution as one that is customer-centric.
This is especially important as businesses look to maintain a robust online presence. Online reviews and social media have given customers the power to make or break brands. Just look at brands that lost ground in their respective markets after being actively criticized on platforms like Twitter, Trustpilot, or Yelp. Taking a customer-centric approach can help boost a company’s brand perception and lead to increased awareness and loyalty.
Loyalty is probably the most important advantage you'll gain from being customer-centric. As much as 96% of customers say service is their deciding factor on whether or not to stay loyal to a brand.
Customers who feel appreciated and heard are more likely to be loyal, spending more money with your company and advocating it to other prospects that want to know why they should choose you over a competitor. A core part of retaining loyal customers lies in making them successful with your product or service. The best way to do that is to understand your users’ needs and expectations so that you can offer them the ultimate experience.
Ultimately, customer-centricity is also about building strong relationships with customers so they feel more closely tied to your company. Happy and loyal customers drive more value for businesses because they're going to refer their family, friends, and neighbors (your potential new customers) to you. Being customer-centric will get you there.
Raise perceived value
Customer-centricity can directly affect how much people are willing to pay for your product or service. If you incorporate customer feedback into your business practices, you can increase the perceived value of your product for each new customer. People will perceive what they receive as being of higher value because they had a hand in influencing it, so they are more willing to spend money. This also eventually trickles through to potential leads that will convert at a higher rate due to the fact that you can offer a better experience to them.
In fact, research shows that up to 86% of buyers are ready to pay more for a better customer experience.
Offer great products and services
Customer-centric organizations can offer new products and services that are tailored to fit the customers' needs. You'll be able to keep up with what your customer wants and how they want it. This will help set your products or services apart from others in the market because you can offer unique value targeted towards specific customer groups.
How do you build a customer-centric culture?
“The key is to set realistic customer expectations, and then not to just meet them, but to exceed them - preferably in unexpected and helpful ways.” — Richard Branson, Business Magnate
Customer-centricity is more than a simple strategy or a marketing buzzword. It’s not just something you can suddenly implement in no time. It's a philosophy that must be built into the DNA of your organization if it has any hope of being successful. Building a great customer experience is a never-ending process that results out of a constant conversation with your users. Many companies have taken steps to transform their business practices, but in most cases, this is only the first step in creating a customer-centric culture.
When building a customer-centric culture, everyone in your company needs to be on the same page regarding the importance of making the customer successful, even if that means investing into resources or training to help implement customer-centric thinking and strategy. You'll have to train your marketing and sales teams to manage expectations and put the customers’ needs first. You’ll have to work with customer support and customer success teams to make sure they build strong relationships with the customer and offer the best service. You’ll have to work with product and UX to offer the best features and user experience. You’ll also need to work with more operational teams like HR, finance and legal to ensure the customer experience is always at the center of decision making.
To build such a culture in your company, you have to be clear about your brand promise and consistently deliver on that promise to customers. Many new companies are in the habit of over-promising and under-delivering. The key to a customer-centric mindset is to manage expectations and work relentlessly at over-delivering on those expectations whenever and wherever possible.
One important thing to note however is that customer-centricity is not about offering amazing service to anyone who ever engages with your business. The key to being successfully customer-centric lies in really knowing who your very best customers are and how to best serve them. This video by Peter Fader really drives this point home:
Why culture matters in customer-centricity
At first glance, it may seem that your organization’s corporate culture may have little impact on its customer-centricity. But it’s important to underline that enacting a customer experience strategy isn’t exclusively the responsibility of upper management.
On the contrary, employees are the first point of contact for your customers—whether or not the former will provide the latter with good service, document their needs, and identify patterns in their needs is at the discretion of the customer-facing worker. Good corporate culture is what stimulates employees to be engaged with their workplace and commit to helping the organization grow and their customers succeed.
And there’s plenty of data to back these claims up. For instance, a McKinsey report suggests that organizations with a healthy corporate culture outperform those that don’t by a factor of three. In this context, a healthy culture implies an organization-wide alignment around a common vision and an overarching commitment to innovation.
More importantly, a healthy corporate culture provides for successful and continuous transformation. Organizations that commit to people-related activities have shown an increase in the probability of successful transformation by up to 79%, according to the study we mentioned above.
How do you know if your company is customer-centric?
If you're not sure whether or not your company is truly customer-centric, here are a few questions you can ask yourself:
Does my company really listen to customers?
How often do we speak to customers?
Do we gather insights into our customers?
How do I know what my customers really want?
Do we make changes based on our customer feedback?
If you are truly customer-centric, you will know because your customers will tell you. If you make a lot of effort to understand your clients’ needs and you act upon the insights you gather, then you can consider your business to be customer-centric.
The best ways to learn about the people you cater to is either by conducting research (i.e., talking to them through interviews and focus groups) or by gathering feedback. You can use tools such as CustomerThermometer or Typeform to send out NPS (Net Promoter Score) or CSAT (Customer Satisfaction Index) surveys as well as other forms that help you gauge your customers’ level of satisfaction as well as gather more insights into their needs and expectations.
Finally, if you’re making an active effort to conduct research and collect feedback from your customers, you need to make sure you make the most out of those insights. Tools like Reveall can help you turn customer data into actionable customer-led insights.
Developing a customer-centric model for your organization
When the time comes to implement a concrete strategy, it's important to give enough attention to each pillar of customer-centricity; these include people, processes, strategy, leadership, and platforms. Developing a customer-centric model is a great way to make sure customer-centricity is built into your business’ processes.
In his book “The Experience-Centric Organization,” Simon Clatworthy, an internationally recognized expert in Service Design, provides a summarized overview of the key characteristics of a customer-centric organization. It goes as follows:
"The Experince-Centric Organization" by Simon Clatworthy
Before we dive into the conversation about developing a customer-centric model, it’s important to create a clear distinction between a customer-oriented and a customer-centric organization.
While the two have similar names, their worldviews are very different. A customer-centric company doesn’t typically try to adapt its offering to its customers. Rather, it asks, “What products can we provide to truly satisfy our customers’ needs?”.
While the difference can appear subtle, the customer-oriented organization is fundamentally preoccupied with itself. Its business goals are its sole focal point, while the customer-centric organization places the customer in the middle of its decision-making.
It’s worth mentioning that this isn’t exclusively a change in mindset—customer-centricity affects all facets of a company’s operations. Here are a few things that need to be taken into account.
The people in your company should have a customer-centric mindset. If you're organizing, training, and developing programs for your employees, be sure to include sessions that teach them value-based selling, empathy towards customers, and the fundamental principles of excellent products and services.
Management should also encourage employees to develop relationships with customers through social media or other online platforms and invite clients into the office for tours and discussions.
A company's culture is also important in customer-centricity, so companies must surround themselves with people who believe in treating customers well. To achieve this, you may want to hire the right talent or create an environment where your employees can bring their whole selves to the office.
Your company's processes should be geared towards ensuring that your customers are always at the center of attention. This includes everything from how you communicate with them to any decision about a new product, service, or marketing campaign.
Building your process around the customer experience will help you consistently deliver on your product or service promise.
It's important to realize that customer-centricity is not just a strategic aim, but it should be the fundamental foundation of your company in many ways. The ultimate goal is to have a business centered around customers by making them the heroes of the story at every level of your organization.
Having a long-term strategy can be difficult, but in order to consistently deliver great customer experiences, you have to know where you're going.
Leadership needs to articulate a strong vision for customer-centricity to get everyone on board with this new mindset. They must also make it clear to employees that customer-centricity is the leading strategic goal for your organization. The CEO/Management team should communicate this vision compellingly and commit themselves to make big changes when necessary.
Using good instruments to measure your success is key to ensure that you are on the right track. It's essential to use tools that offer real-time customer analytics and give an overview of how your company is performing relative to competition and industry benchmarks.
It's also important to integrate customer-centricity into your business systems, from CRM to your web presence. The most important thing to know here is that customer-centricity should translate into every aspect of your business, from the products you offer to the interactions between employees and customers.
The Voice of The Customer
Perhaps one of the most valuable concepts for customer-centricity is that of the Voice of the Customer (VoC). This is the collective voice of all your customers/clients talking about how you are doing as a company and what they would like to see moving forward.
There are many ways you can gather data to make decisions around the Voice of Customer. Here are the most common ones:
Surveys and questionnaires;
Website visitor feedback;
Social media monitoring;
Sentiment analysis and reviews;
Successfully implementing VoC is all about asking the right people the right questions in the right way. If you succeed in doing that, you will have a lot of valuable insights to work with.
Examples of customer-centricity
Nothing explains a concept like showing concrete examples. Below we have listed a few examples of companies successfully implementing customer-centricity.
Amazon and next-day delivery
When the voice of Amazon customers collectively complained about long shipping times, Amazon took action. They set off to find a solution and created Amazon Prime, which offers free next-day shipping on millions of items for a fixed annual fee. Amazon Prime has since become one of their most standout features and one that companies across the world have tried to emulate. This is a great example of how customer-centricity doesn’t need to be rocket science. It doesn’t take much to know that consumers ordering products online want to get their product delivered as fast as possible. What sets Amazon apart is that they understood that fast deliveries were the ultimate priority and effectively acted upon it.
Today, Amazon is known as being a leader in customer-centricity. They have gone out of their way to focus on the needs and wants of their customers, which has led to them becoming one of the most valuable retail giants in the world.
JetBlue's unique service model
When you book your flights with JetBlue airlines, they give you 24 hours to back out of the booking for a full refund. This is an interesting way to deal with customers in a very clear-cut manner: if they are not satisfied, JetBlue will make things right. Their strategy gives them an edge over traditional airlines and makes them stand out from the competition.
Again, this is a simple solution that helps the company differentiate itself from the competition. The key here is that customer-centric companies often are willing to make short-term sacrifices for long-term gains.
Netflix and personalization
Personalization is becoming the cornerstone of many customer-centric businesses. It is the ultimate practical implementation of customer knowledge for digital products.
A notable proponent of this approach is Netflix, which takes things one step further by recommending movies based on users’ profiles and their expressed preferences within the platform. By giving the customer the option to provide direct feedback on their preferences, they have direct control over their experience by receiving tailored recommendations on what to watch.
Beyond this, Netflix spent a lot of time investing into creating original content; something that racked up huge costs but allowed them to offer their users the best programming and therefore the best experience. Their long-term reluctance to crack down on password sharing also contributed to their customer-centric image as well as their viral growth.
There are countless examples of customer-centricity out there. Some are big and flashy, whilst others come in the form of small improvements and optimizations that gradually create a better experience for the customer.
At the end of the day, all of this focus on customer-centricity isn’t surprising, considering that most companies see it as the main competitive factor, no matter the market they are in.
The important thing to know is that customer-centricity is a journey, not a destination. It's the process of constantly learning from your customers and using that knowledge to make better decisions for them in the future. As you learn more about your customers you will look for ways to innovate based on their needs and will end up creating more value for them.
If you’re gathering insights on your customers and are struggling to get the most out of them, you can check out NEXT.
If you want to learn more about improving customer and user experiences check out our blog.