Customer-Centricity concept and relevance

Article

Nowadays, businesses surviving the digital era have faced and are still facing a strategic and organizational struggle, in order to excel in today’s hyper-dynamic and competitive market landscapes.

Posted on

Most companies are starting reshaping their structures, business’ cores, value propositions, and strategies, to ultimately achieve both short and long terms goals, in meeting the emerging trends such as superior customer experience. Several companies have come to the realization that customer satisfaction is vital, especially considering that customer attitudes and expectations in the digital era are dramatically shifting towards tailored experiences and personalized solutions.

Nevertheless, the pressure this shift towards customer experience is imposing to companies is frequently underestimated, and as a result, the marketing efforts tend to be fragile and ineffective. Companies convinced that adopting a customer-focused approach, and offering average experiences, is enough to take a profitable competitive stand in the market, tend to lose out on several opportunities and to fail in the long-run. This failure has to be attributed to a lack of an overall strategic vision influencing the whole company, the urgency to imitate the first movers and to invest into marketing efforts while miscalculating the relevance of several different structural adjustments.

On the other hand, businesses excelling in the market have fully embraced and implemented a key understanding of transforming and evolving during the digital era. Businesses successfully executing strategies and achieving high-class customer experience, have all undertaken a strategic transformation, starting with the realization that customer-centricity approach is a top priority.

Customer-centricity concept

Given that delivering relevant customer experiences is demonstrated to provide your company with a substantial competitive advantage, most businesses are focusing on building strategic capabilities to achieve this goal. Positive customer experiences arise from the sum of all interactions with your company across the journey, he or she undertakes with your firm. Therefore, every single department of the company is supposed to be responsible for delivering such a result, ultimately meeting and tapping on your existing customers’ wants. In order to achieve this desirable outcome, the first mandatory imperative is to see your company through your customer’s’ eyes, assuming their perspective, and putting them at the centre of your organization from top to bottom.

Albeit customer-centricity is a moderately intuitive concept, several companies tend to underestimate its potential. It may be defined as marketing strategy adopted by businesses aiming to provide a positive and unique customer journey and offering an outstanding customer experience. Customer-centric approaches place the individual customer at the centre of every single marketing decision, and they reshape the whole company’s structure, which in turn has to switch its focus on customers’ satisfaction, by meeting their needs and expectations.

Hence, companies orienting their strategies towards customer-centricity are required to undergo a mandatory restructuring program, involving their organizational cultures, their employees’ mindsets, their business models, and structures, by aligning and arranging their core processes and operations towards their customers’ needs as a top of mind priority. Customer-centricity should not be exclusively considered as an advantageous strategic approach, but companies should embrace it as a mindset prompting a renovation program, an opportunity to evolve, and a re-structuring process across all business functions, given that all departments will need to assume a customer-centric point of view rather than focusing on product-centric perspectives.

Customer-centricity relevance

Customer-centricity approach relies on the basic assumption that all marketing and strategic efforts need to be focused on a single high-value customer segment. Rather than mainly being customer-focused, companies should adopt several key practices in order to move towards customer-centric approaches. The first basic requirement is to consider that it is most profitable to focus on a single customer segment, embracing the “one-size-does-not-fit-them-all” view, and avoiding old-fashioned and traditional efforts to serve all customers or the average ones. Once assumed this perspective, a wide and profound analysis has to be conducted, in order to identify the customer segment that is most likely to yields higher profits. This analysis would allow your company to access a 360° degree assessment of your customers’ group, and it will grant you to retrieve and address the right segment, namely the one with the higher customer lifetime value. Moreover, by isolating a single segment, your company would discover the most profitable group, especially in terms of loyalty and retention opportunities.

As a consequence, nurturing a positive relationship with them, structuring your organization and your strategic efforts around them, will finally enhance and improve their journeys and experiences. By focusing on identifying these most valuable customers, and devolving all efforts to ensure they are constantly satisfied and experience an overall positive journey with your company, will secure you with a long-lasting competitive advantage.

How to successfully achieve a customer-centric approach?

Once your company has discovered its most profitable customer segment, in order to get a targeted, hypothesis-driven, and methodical approach towards revolutionizing your business as a customer-centric efficient system, three main manoeuvres are necessary to generate value across the whole organization:

1. Outside-in perspective; Understand what truly matters to your customers

To fully grasp the main elements enhancing your customer’s’ satisfaction, it is recommended to analyze intensely the journeys they undergo across all the available touch points, and to observe the nature of the interactions they experience. It is widely known that customer journeys assessment can provide you with a reliable index of the overall satisfaction compared to evaluations based on a single touch point. As a consequence, your company should fully integrate them to create a unique and consistent experience thought-out the whole customer journey.

2. Closing the Gaps in your organization; re-shape your tasks and teams

In the digital era, regardless of assuming a customer-centric approach, silos and highly hierarchical structures tend to possess a static nature, which could be highly detrimental to a business. However, considering the customer-centric discourse, as anticipated, companies pledging to adopt such an approach need to undergo a whole re-thinking and restructuring organizational operation. The main consequence of this process is that your company needs to be fully integrated, to face all strategic issues cross-functionally. Therefore, it would be unfavourable to neglect your company’s business model evolution, considering an integration of different teams composed of diverse skills holders.

3. Be data-driven; Track and monitor customers to obtain insights

Data gathering and analysis are crucial to achieving a complete overview of your customers. To define what truly matters to them, given a constantly evolving landscape, it is required to monitor their journeys and the core elements building up those journeys, in order to better predict which of them are driving the best overall satisfaction. By centralizing and combining both structured and unstructured data, to create an accurate view of your customers, your company will consolidate efficient consumer insights, which in turn will consistently orientate all strategic decisions. Those insights will move beyond generic assumptions, such as demographic, which could be obsolete, and will provide you with the implicit and intrinsic knowledge necessary to nurture specific assets and capabilities to achieve customer-centricity.

In brief, the more a company comprehends about its most profitable customers, the more it is facilitated into offering a fully integrated customer-centric and end-to-end experience. Hence, it is crucial to devolve your business attention and acumen to reach a comprehensive understanding of their needs, motivations, and expectations. Achieving superior customer-centricity approaches implies extensively using data, moving beyond raw numbers and metrics to access fundamental insights that have to be used to your advantage and to take data-driven actions, shaping your business model and processes accordingly. Thereupon, in the following issue, we are going to discuss and investigate data-driven marketing concepts.