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How to make your business more customer-centric

Last updated

28 February 2023

Reviewed by

Miroslav Damyanov

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On the surface, "customer-centricity" may seem like an obvious business strategy. The term suggests it has something to do with putting customers at the center of all business decisions and actions. So, you wouldn’t be wrong to believe that becoming a customer-centric business involves genuinely caring about your customers, providing the best solutions for their needs, and delivering exceptional experiences.

However, like any good marketing principle, it is not that straightforward. Becoming a true customer-centric business requires you to go beyond these surface-level efforts and embrace customer-centricity as a core business tenet. You must deliberately commit to principles that may run contrary to short-term tactics and put customers first in all decisions.

This article explores the different layers of customer-centricity and provides practical strategies you can use to make your business more customer-centric.

What is customer-centricity?

Customer-centricity is a business approach that puts the customer at the core of all decisions and activities of an organization. It involves focusing every aspect of a business, from product development to marketing and sales, on customer needs, interests, and preferences.

A customer-centric business considers the effect of the outcome of every business decision and activity on the customer. It designs products and services with the target customer in mind, and creates and delivers exceptional customer experiences at every stage of the customer journey—before, during, and after the sale.

The goal of customer-centricity is to boost customer experience, satisfaction, and loyalty, which can drive profits and build a competitive advantage.

Why is customer-centricity important?

Customer-centricity is important because of the following reasons:

It increases customer satisfaction

Customer-centricity allows organizations to identify and address various customer pain points in their products and services. This insight allows them to improve their offerings, which helps them meet customer needs and expectations, thereby increasing customer satisfaction.

It improves customer loyalty

Satisfied customers are more likely to build a long-term relationship with a company and recommend it to others. These recommendations increase the number of loyal customers due to the power of word of mouth. Positive customer experiences build trust, which enhances brand reputation and increases credibility among customers. It further builds loyalty.

It increases revenues

Loyal customers continue doing business with a company for the long term. These repeat sales increase revenues over time. Additionally, according to research, a 5% increase in customer retention can increase profits by 25% to 95%. Even just a small improvement in customer-centricity can significantly increase revenues.

It leads to growth and innovation

By understanding the needs, preferences, and pain points of customers, organizations can identify new opportunities for growth and innovation. It will enable them to develop new business models or products and services that help them grow by catering to the needs of their customers.

It leads to cost savings

A customer-centric approach proactively addresses customer needs and concerns. This helps organizations avoid the costs associated with customer issues and complaints, increasing profitability.

These benefits of customer-centricity translate to higher revenues and profits. According to Deloitte and Touche, customer-centric companies are 60% more profitable compared to non-customer-centric companies.

How do you make your business customer-centric?

As we mentioned, you must go beyond surface-level efforts and make customer-centricity a part of your business philosophy, mission statement, and values. To become a customer-centric business, it must be a company-wide commitment.

Your organization can make that commitment to your customers by following the steps below.

1. Identify customer needs

Before you start putting the customer first, you must understand them. What are their needs? How does your product or service satisfy their needs?

To answer these and other related questions, you can conduct customer research as part of market research, user research, or design research followed by a customer needs analysis to gain a deep understanding of your target customers. The process can involve surveys, focus groups, deep interviews with customers, etc. A customer needs analysis can reveal not only what they want today, but also help you anticipate what they will need in the future.

2. Collect customer feedback

You can use customer feedback to improve products and services. You can collect it from customer communications through various channels, such as emails, chats, phone calls, etc., or conduct customer research. Some of the techniques you can use to research include:

  • Conducting surveys like customer satisfaction and product surveys

  • Launching usability testing to evaluate your products and services by testing it with users

  • Making direct calls to customers for a personal conversation, which results in more robust feedback compared to text

  • Utilizing social listing to collect live feedback about your brand, service, or product

3. Be easily accessible

Many businesses believe that the harder it is for customers to reach support, the less they spend on servicing customer issues. But this contradicts customer-centricity. To achieve customer-centricity, make it as easy as possible for customers to reach you by prominently displaying your contact details.

4. Meet with customers in person

Hosting in-person events, in the current age of low in-person contact in favor of online interactions, will set you apart from the competition and help your business become more customer-centric.

5. Provide proactive customer service

Proactive customer service is a strategy of customer service that anticipates and addresses customer needs before they become problems. The customer service team reaches out to customers before they ask for help. It improves the customer experience and builds loyalty and trust.

You can provide proactive customer service by regularly checking in with your customers, sending helpful tips and advice, and monitoring and responding to customer interactions on social media.

6. Adopt customer service tools

Customer service tools can improve customer-centricity by delivering seamless support systems that provide immediate solutions to customer problems. They will help you understand your customers better. Some critical customer service tools include customer relationship management (CRM) software, social media management tools, and automated customer service tools.

7. Look beyond the purchase

You can provide customers with added benefits that help them solve their needs and create memorable experiences. It will improve their experiences, attract more customers, and boost revenues and profits. Some of these benefits include warranties and return policies, free samples and trial periods, loyalty programs, training and education, and follow-up services.

8. Create an onboarding process

After you make a sale, you can build a good relationship and ensure the customer gets the most out of the product by offering onboarding services. The onboarding process introduces your products and services and helps the customer understand how it will meet their needs. Each customer's need is unique, so the onboarding process must be personalized to be effective.

Put your customers at the center of everything

A customer-centric business puts customers at the center of everything. Three key ways you can put customers at the center of your business decisions and activities include building a customer-centric culture, using a customer-centric marketing strategy, and using customer-centric selling.

Customer-centric culture

A customer-centric culture is a business philosophy in which an organization focuses its culture, practices, and values on delivering exceptional customer experiences. Customer needs are the primary focus of all decisions and employee training. A customer-centric culture leads to several positive business outcomes.

Customer-centric marketing

Customer-centric marketing involves adopting a marketing strategy that turns customers into promoters, bringing in new customers through word of mouth and referrals. It involves using user-generated content, reviews, and customer feedback.

Customer-centric selling

A customer-centric selling strategy is tailored to the customer's needs and desires. It ensures the offering is customized to the prospective buyer instead of selling cookie-cutter offerings. Sales teams with a customer-centric strategy will share useful content with prospects through channels like email, text, and in-person interactions instead of cold calls.

How do you measure the success of your customer-centricity efforts?

You must track the progress and measure the success of your customer-focused efforts to learn how well they are working and consistently make improvements. Although there is no direct metric that measures customer-centricity, instead of relying on anecdotal evidence, you can paint a holistic picture of the success of your customer-centricity efforts by tracking the metrics below:

  • Churn rate: the rate at which existing customers stop doing business with you over a period. To calculate your yearly churn rate, divide the number of customers who left in the past year by the average number of total customers in the same period. If your customer-centricity efforts aren't successful, your churn rate will increase or remain steady per period.

  • Net promoter score: tells you the likelihood of your customers advocating for your business to others. It is measured on a scale of zero to 10, with 10 being customers who are highly likely to recommend you and zero being customers that have no likelihood of recommending you.

  • Customer lifetime value (CLV): measures the total revenue your customers are likely to contribute to your business over the course of your relationship with them. The more successful your efforts, the longer you retain customers, and the higher their lifetime value. A falling customer lifetime value means your efforts are failing. 

Although these metrics don't indicate customer-centricity itself, they can paint a holistic picture of the success of your customer-centricity efforts.

The challenges of becoming a customer-centric organization

Becoming a customer-centric organization has several challenges as it requires a significant shift in the way an organization thinks about its customers and how it operates. Some of the key challenges of becoming a customer-centric organization include:

  • Gathering and analyzing vast amounts of customer data to understand customer needs and wants is time and resource intensive.

  • It can be complicated and time-consuming to integrate customer feedback into company operations.

  • Changing customer behavior and expectations requires organizations to adapt quickly and effectively.

  • Rapidly evolving technology requires organizations to acquire the right expertise and significant resources to keep up and gain or maintain a competitive advantage.

  • Achieving a balance between meeting all customer needs and achieving other business objectives is complex and requires an analysis of their tradeoffs and hard decisions.

Once you overcome these challenges, you will enjoy all the benefits of customer-centricity.

Best practices for becoming a customer-centric company

To successfully become a customer-centric organization, consider implementing the following tips and best practices:

  • Invest time and resources in your customer service team, such as hiring top talent

  • Encourage and facilitate company-wide participation in customer support, including non-support team members

  • Actively solicit customer feedback through customer research to understand their needs, wants, and preferences

  • Improve access to customer data and insights by centralizing it and setting access controls

  • Motivate your employees by linking their actions to results

  • Distribute customer-centric tools such as  journey maps across the company so as to develop a shared understanding of your customers by visualizing the steps and touchpoints they go through when engaging with your business, product, or service

Following these best practices when implementing your customer-centricity strategy will help improve its effectiveness and the overall customer experience.

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