How can you create added value for customers and your own company through customer centricity? We explain the difference to customer orientation and the path to customer centricity.
Digital transformation is one of the great challenges of our time. It shifts competitive positions acquired with great effort, destroys existing business models, but also offers opportunities to be at the forefront of digital competition.
Knowing the expectations of customers in the future offers an excellent opportunity for a company to stay ahead of the proverbial digital competition – and to keep it that way. To achieve just that, the customer is involved in the company’s business process at the earliest possible stage. And that is what customer centricity is all about. The focus is not on what a company appears to be or its products, but rather on what it can do for its customers. The previous customer experience plays a decisive role here. The well-known U.S. marketing specialist Peter S. Fader currently defines customer centricity in just one, admittedly somewhat lengthy, sentence: “Customer centricity is a strategy that aligns the development and delivery of a company’s products and services with the current and future needs of selected customer segments in order to maximize their long-term benefits and thus financial value to the company.”
Customer centricity instead of customer orientation
Transparent provider comparisons, for example on the Internet, have become an integral part of our digital lives. The logical consequence of this fact is that customer loyalty is declining – it’s clear that those who compare tend to choose the cheaper option when in doubt. From the providers’ business point of view, however, customer loyalty is significantly cheaper than acquiring new customers. For this reason alone, it is enormously important for companies to increase and secure customer loyalty. Most providers try to maintain this loyalty by focusing more on the desired target group and – if possible – even expand it. This is what we call customer orientation. It also includes regularly and systematically recording and analyzing needs and expectations, for example, maintaining personal contact with customers and, last but not least, regularly measuring customer satisfaction. The bottom line is that these are all key elements of customer orientation. Which, by the way, is often equated with customer centricity – incorrectly. Because a customer-centric approach is much more. The company only achieves the highest customer loyalty if it convinces its customers anew of its services and solutions at every point of contact with the company – and that from the service hotline to marketing measures and user-friendliness to the transparency of the offer.
Customer centricity or the customer really is the focus
The idea behind customer centricity is elementary: the customer, and not the product or service, is at the center of a company’s activities. He defines and shapes his individual solution paths for his(!) products, performance and service.
Important: The company should under no circumstances lose sight of economic reason. In fact, only what makes sense for the company and its philosophy should be implemented. Customers are enjoying an increasingly broad selection of offers that are more transparent than ever thanks to digitization. This fact is forcing companies to consistently align traditional business models with the needs of digital customers. And the easiest thing to do is to get them excited about new solutions, which are best created in collaboration with them.
What to consider on the way to customer centricity
While customer centricity is a silver bullet, there are a lot of things to consider when implementing it. We have broken down the six most important points here:
- Above all, it is important to put one’s own entrepreneurial interests in the foreground when embarking on the path of radical customer centricity.
- It should be mentioned here that reacting flexibly to customer wishes is not yet customer centricity. Customer centricity means acting instead of just reacting. The company should know in advance what the customer really wants.
- Developing products and solutions together with the customer means adapting to a perceived customer dependency. Many companies find this difficult.
- Customer centricity further means really knowing the customer’s customer journey. Unfortunately, often the simplest data is not linked in the company.
- All decisions should be measured. As a result, Big Data and analytics are becoming the foundation for modern management in the enterprise.
- It is a necessity to synchronize with the customer to provide a consistent and coherent experience – this requires a culture change. If such a model is not accepted at all levels of the organization, it is impossible to operate in a customer-centric way.
Focus on the customer is essential for survival
Customers are the very reason a provider exists. Yet many companies are caught up in endless channel optimization or product segmentation and simply forget about the main thing – the customer. To change that, a focus on customer centricity is the way to go. Digital customers are not the only ones demanding deeply personalized and relevant experiences today. In practice, they then stay with the companies that put their needs at the center of their competitive strategy. That’s because these companies offer customers a genuine experience.
In other words, to be customer-centric, you have to …
- … create awareness: All stakeholders must internalize that there is no such thing as an “average” customer.
- … spray attraction: This means being able to convert contacts into leads.
- … Gain knowledge: Know the needs of customer groups in order to target them.
- … choose the right time: The right message at the right time to the right consumer to convert leads into successes.
- Build commitment: It is important to build a long-term commitment, a commitment that leads to repeated demand.
Customer-centric companies aspire to constantly improve and evolve with the needs of their customers. What’s good for customers is good for business in general. But employees who feel empowered to deliver a world-class customer experience also “enjoy” their work and are more motivated.
Authors: Inga Schmidt and Christoph Blase