5 min
A customer-centric way of doing business is about delivering a positive pre- and post-sale experience with the goal of improving user loyalty and business growth.
How Important Is It to Focus on the Customer?
According to a study by Econsultancy, for 58% of those surveyed, the main characteristic to establish a truly “digital native” culture is based on customer centricity.
However, according to the CMO Council, only 14% of marketers believe that customer focus is a hallmark of their companies.
What Is a Customer-based Strategy?
Customer centricity is a business strategy based on putting the customer first and at the center of your business to provide a positive experience and build long-term relationships.
The combination of putting the customer at the center of a business strategy and a CRM (Customer Relationship Management) allows a large amount of data to be collected, offering a complete view of the customer. This data can then be used to improve your customer experience by:
- An understanding of the buying behavior, interests and participation of users.
- The creation of products, services and promotions for the best clients.
- Customer segmentation.
Deloitte and Touche research found that customer-centric companies were 60% more profitable compared to companies that were not. Thus, organizations that focus on their customers can offer them a positive experience throughout the customer journey. To achieve this, companies must undergo a massive change in corporate structure and culture.
What Are the Challenges of Becoming a Customer-centric Organization?
Social media marketing (and with it social sales) has changed the way customers interact with brands and has become an important part of the customer journey.
In a Global Web Index report, 54% of social media users use social media to research products and 71% are more likely to make a purchase based on social media referrals.
Social media is just one of many digital channels that are changing the landscape between businesses and customers.
Research also reveals that companies struggling to become a customer-centric organization cannot share user information between departments and lack a culture aligned around customer needs. Most companies don’t have all the components to claim that they are customer centric, but the most important part is that customer centricity starts with focusing on what customers need and how they want to interact with your company.
By designing your business from a user perspective, your organization can meet customer needs and deliver a positive experience.
The 4 Best Practices to Become a Customer-centric Company
Becoming a customer-centric company allows you to anticipate customer needs in order to offer them new products and services.
Therefore, a customer-centric brand creates products, processes, policies, and a culture that is designed to help customers with a great experience from initial discovery to point of purchase and beyond.
For better customer focus, here are four best practices to help your business stand out:
1) Hire Talent to Ensure Customer Success
Employees are the front-line workforces that will shape many of the customer experiences. Regardless of the position, you need to hire talented people who can align with customer-centric thinking and the importance of CX in the company.
2) Put Relationships First
Customers are not numbers to be measured and analyzed in a revenue performance report. They are people and they benefit greatly when a mutually beneficial relationship is established.
3) Democratize Customer Data
Adopting a new customer-centric strategy requires centralized access to user data and insights. Having a CRM database can help facilitate a better understanding of customers by having the complete history of each one of them at a click.
4) Connect the Culture of the company With the Results of the Customers
Employees will be motivated by a customer-centric strategy when actions can be linked to results. For example, strategies to reduce customer wait times or ease transitions can be carried out in real time to highlight successful strategy implementation.
3 Ways to Measure the Success of a Customer-centric Company
Not all organizations will have the same customer success metrics to measure their approach. However, the three most important customer-centric metrics that need to be carefully monitored are: abandonment rate, Net Promoter Score (NPS), and Customer Lifetime Value (CLV).
1) Abandonment Rate
Acquiring new customers is increasingly difficult. Therefore, more companies are investing in maintaining existing ones. This is why:
- Acquiring new customers can cost up to 5 times more than keeping existing customers.
- A 2% increase in customer retention has the same effect on profits as reducing costs by 10%.
- On average, companies lose approximately 10% of their customer base each year (customer churn).
- Companies with a high retention rate grow faster.
- The key to improving retention rates understands why people are leaving and why people are still customers.
2) Net Promoter Score (NPS)
Are the customers happy? How is your happiness measured? The answer is through NPS (customer satisfaction).
NPS, or Net Promoter Score, focuses on uncovering customer loyalty through a simple question. Every time a customer answers this question, the answer is segmented according to predefined criteria:
- Promoters (9-10): These people are in love with your product or service and are likely to recommend it to potential buyers. Customers who give it a rating of 9 or 10 are repeat customers and will have a high lifetime value.
- Liabilities (7-8): These people are happy to be a customer of your business, but are more likely to switch to a competitor if they find a new or better product.
- Detractors (0-6): These people are unhappy with your product or service and are likely to damage your brand reputation by sharing their negative experience with their friends, family, and connections.
3) Customer Life Value (CLV)
For a customer-centric business, the most valuable “asset” is its customer base. The CLV measures the perspective of value that a customer brings to the business.
In conclusion, the change to becoming a customer-centric organization is complex and lengthy, as even the smallest changes in policies and processes can have a significant benefit for both employees and customers.
Being a customer-centric organization is the Holy Grail for unlocking the true potential of customer value. Therefore, it is essential to always put yourself in the shoes of the user and minimize their effort and maximize their value.
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