Importance of Customer Centricity in Business

Importance of Customer Centricity in Business

Nowadays, making customers happy is a top priority for businesses. In fact, a whopping 95% of CEOs say that providing great customer service is vital for their company, according to research by Forrester. 

Customer experience can make or break a business, and those businesses that put their customers first tend to last longer than those that don’t. So, what does it mean to be a customer centricity business? How can it shape the core of your business? Let’s find out.

What Does It Mean to Be A Customer-Centric Business?

Being a customer-centric business is all about creating positive experiences that will make customers want to stick around. But it’s not as simple as just thinking about the customer. It means setting up a plan for growth where everyone on your team, especially those who deal with customers, understands the customer’s needs. When this is done right, it leads to meaningful interactions and lasting relationships.

An actual customer-centric business will take the time to really understand its customers and use this understanding to build a strong, customer-focused culture. This needs to be an integral part of your company’s way of working and be genuine.

Why Should Your Business Care About Being Customer-Centric?

Your brand’s success largely depends on how satisfied your customers are. Ultimately, your customers are the ones who decide whether your business thrives or not. 

Think about why you choose to buy from certain businesses over others. Why do you stick with them even though you know other options exist?

Source: LinkedIn

Challenges in Becoming Customer-Centric

  1. Empowering Employees to Focus on High-Value Interactions

Employees who can provide personalized support to customers can greatly improve the customer experience. However, customer service staff are often overwhelmed with repetitive tasks. They need support to solve more complex problems and provide exceptional service.

  1. Including Data Collection in Product or Service Design

Brands need customer data to provide personalized experiences. However, it’s important to design services and activities so that this data is collected from the start.

  1. Treating Customers as Unique Individuals

Customer research and market research are often confused. But they’re not the same. This research looks at customers as unique individuals, whereas market research groups them into broad categories. This misunderstanding can be a barrier to becoming a customer-centric business.

Source: Lexer

Steps to Becoming A Customer Centricity Business

Here are some steps a company can take to become more customer-centric:

Step 1: Invest in Customer Service

Customer centric businesses see customer service as a way to generate revenue. They understand that their growth is driven by their support staff. You need to provide resources to your support staff to ensure that they’re not always rushed off their feet dealing with customer issues.

Step 2: Regularly Seek Customer Feedback

Listening to your customers is a key part of being customer-centric. Without a way to regularly collect customer feedback, it’s hard to know how to improve the customer experience.

ALSO READ: The Importance Of Feedback Surveys For Customer Satisfaction

Step 3: Set Up a Business Structure That Supports Customer Centricity

Before a company can become customer-centric, it needs to look after its employees. When employees are paid well, not overloaded with work, and given the right training, being customer-centric becomes a natural part of how the company operates.

Features of a Customer-Focused Strategy

So, what does it mean to put the customer first? Let’s look at the key features of a customer-focused strategy:

  1. Doing extra to turn customers into big fans of your brand.
  2. The company works hard to make things that customers find useful and valuable.
  3. When hiring, the company looks for people who are good at connecting with others.
  4. Being open and honest with customers is very important.
  5. The company cares about keeping its employees happy and healthy.

Measuring the Success of a Customer-Centric Company

You can measure how well a company is doing at being customer-centric by looking at three things:

  1. Churn Rate: 

This is how many customers stop doing business with a company over a certain period of time.

For example, you have an online streaming service with 1,000 subscribers at the start of the month. Over the course of the month, 50 of these subscribers canceled their subscriptions. Your churn rate for that month would be (50/1000) * 100 = 5%.

ALSO READ: What Are the Best Practices for Customer Churn?
  1. Net Promoter Score (NPS): 

This is a measure of how likely customers are to recommend a company, product, or service to others.

For example, you could survey 100 customers, asking them how likely they are to recommend your business to a friend on a scale of 0-10 (0 being not likely at all and 10 being extremely likely).

You find that 70 customers score you 9 or 10 (Promoters), 20 customers score you between 7 and 8 (Passives), and 10 customers score you between 0 and 6 (Detractors).

You would calculate your NPS using the formula: NPS = %Promoters – %Detractors. In this case, your NPS would be 70% (Promoters) – 10% (Detractors) = 60.

  1. Customer Lifetime Value (CLV): 

This is an estimate of how much money a company can expect to make from a customer over the time that they remain a customer.

For example, a customer subscribes to your online magazine for $10/month. Based on historical data, you know that your average customer stays for about three years (36 months). You could estimate the CLV of this customer as: $10/month * 36 months = $360.

In a more detailed CLV calculation, you consider factors like the cost of acquiring the customer (CAC), the cost of serving the customer, discount rates, etc.

Difference Between Customer-Centric and Product-Centric Companies

Customer-Centric CompaniesProduct-Centric Companies
FocusConcentrate on the needs and wants of the customerConcentrate on the features and benefits of a product
ApproachLook for ways to improve the customer experienceAim to make the best product possible
FeedbackRegularly ask for and utilize customer feedbackOften, companies rely on internal teams for product feedback
AdaptabilityMore flexible and adjust to customer needs quicklyLess flexible, focusing mainly on product development
Long-term business sustainabilityFoster customer loyalty, leading to repeat businessRisk losing customers if a better product appears

To Wrap Up

Today, customer support and experience will be front and center. As customers demand better experiences, becoming a customer centricity business needs to be focused on to stay competitive. 

By understanding their customers, investing in their teams, and providing the right tools, businesses can create positive experiences throughout the customer journey. This drives repeat purchases and helps businesses avoid the fallout from poor customer experiences.

Survey Point Team
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