Are You Customer-Centric?

John Eccles, 28 April 2021

You should be customer-centric

“The purpose of a business is to get and keep a customer. Without customers, no amount of engineering wizardry, clever financing, or operations expertise can keep a company going.” Theodore Levitt

“The most important single thing is to focus obsessively on the customer. Our goal is to be earth’s most customer-centric company.” Jeff Bezos

Customer-centric culture

Culture can be defined as the set of shared values, goals, attitudes and practices that characterise an organisation. Culture is the way people feel about the work they do, the values they believe in, where they see the organisation going and what they're doing to get it there.

It’s the attitudes and practices of an organisation’s team that ultimately make it customer-centric. To be customer-centric, the whole team needs to CARE about the customers and demonstrate that care through their practices.

A Harvard Business Review article, 6 Ways to Build a Customer-Centric Culture, states that the most common, and perhaps the greatest, barrier to customer centricity is the lack of a customer-centric organizational culture. The same article offers helpful advice to build and strengthen a that culture.

Customer-centric strategy

Fundamentally, a customer-centric strategy involves finding out what your customers need and want and providing it in the manner that best suits those customers. It a strategy of being more attentive to their needs than competitors. It’s the Marketing Concept that originated from Adam Smith’s book The Wealth of Nations in 1776, but which was not widely accepted until 200 years later – in time for me to learn it in my undergraduate marketing courses.

Components of a customer-centric strategy will typically include:

1. Collection of meaningful information about your customers and what they need and want. How will you find that out? How will you stay up-to-date with their ever-changing needs and wants?

2. Building of solutions to meet those needs and wants. How will you keep your products and services focussed on the customer rather than being technology-driven?

3. Categorisation of customers into relevant segments and optimising products, services and communications with each segment. Are your segments narrow enough?

4. Personalisation of the whole customer experience (including after the order) to better meet their needs and wants. How will you optimise the total customer experience for your customers and keep it optimised?

Customer-centric organisation and metrics

Organisation structure should follow and complement strategy. The classic HBR article, Rethinking Marketing explores how a customer-centric organisation looks very different to a product-centric one.

The authors suggest replacing the Chief Marketing officer (CMO) with a Chief Customer Officer (CCO) who reports directly to the CEO and is responsible for designing and executing the firm’s customer relationship strategy and overseeing all customer-facing functions.

CCOs are more common these days. It is almost trendy. But the importance of the role and the downstream structure of customer managers and then brand managers and product managers as described in the article is not so common.

The same article suggests customer centric metrics:

“These changes shift the firm’s focus from product profitability to customer profitability, as measured by metrics such as customer lifetime value and customer equity.”

It is certainly easier to measure current sales than the customer lifetime value. But the extra effort will provide the focus needed for a customer-centric strategy. Likewise customer profitability should be measured, perhaps by customer segment, rather than just product profitability.

If the organisation is customer-centric, then a focus on the sum of the lifetime value of the customers (the customer equity) must be better than a focus on the value of its brands.

Customer-centric communications

Communications with your customers is a crucial part of your client-centric strategy.

Gone is the era of mass-communication – now it’s individual communication. Today customers expect to interact deeply with product and service providers. It’s not face-to-face or phone or email or web-chat or social media – you have to be available on all channels. You may even have to be available 24/7.

All ‘touch-points’ with your customers are important as they are opportunities to build a positive customer experience. It’s not just about the sales team. The customer service team is a key contributor to the customer experience your customers receive so selection and training of customer service staff is an important part of the implementation of a customer-centric strategy.

How you communicate is crucial, as is what you communicate. Is your messaging on your website and throughout your promotional materials consistent and all about the customer and the customers’ needs? As Donald Miller asks in his book, Building a Storybrand, “Is your customer the hero of your story?” Make sure your content is all about the customers and their needs. Be the guide – let them be the hero.

Customer-centric ‘sales’

The traditional approach to selling has been to drive transactions. That must change. A customer centric strategy puts the customer’s needs, wants, and communication preferences at the heart of the buying process. The focus is on maximizing customer lifetime value by nurturing long-term customer relationships and thus improving retention rates and increasing referrals.

Amazon has translated its customer-centric strategy to its selling:

“Our point of view is we will sell more if we help people make purchasing decisions.” Jeff Bezos

Sales is re-defined as “helping customers buy.” Make sure your sales team has that mindset and that motivation.

Customer-centric toolset

Back in the day, when I trained in marketing, it was about broad market segmentation, product selection (or product development), pricing, promotion and distribution. The toolset included marketing research, competitive analysis (of products and pricing) and information about readers, listeners or viewers of advertising with some pretty crude demographic information to help target the right people. The approach suited an era of mass markets, mass media, and impersonal transactions.

The world has changed!

Technologies such as Customer Relationship Management (CRM) systems provide powerful tools for interacting directly and personally with customers, collecting and mining information about them, and tailoring offerings accordingly. Artificial Intelligence (AI) assistance can now identify when customers need individual attention – when they are at risk of leaving or when another product or service may be helpful.

You may need other technologies, such as an e-commerce system, but it is CRM that is the customer-centric system that provides the tools you need for customer-centric communications and customer-centric sales.

Conclusion

Is your organisation consistently customer centric? A great CRM system is only a toolset. When deployed by a truly customer-centric organisation, it will be highly effective. Otherwise not so much.