With more customers willing to change brands than ever before, companies are rapidly pivoting to customer-centric models that aims to action the voice of the customer to enhance customer loyalty.
Fred Reicheld, creator of the Net Promoter System (NPS), believes that customer centricity should be a top priority of business looking to expand. He said of the technique in an interview with CX Network: "If you want to grow your business profitably there is no alternative.”
CX expert and blogger Annette Franz agrees with this sentiment, stating: “You ought to be making decisions about the business based on what's best for the customer. After all, you are in business to create and to nurture customers.”
However, despite the benefits, it can bring, building a customer-first culture is a challenge for businesses, with 38 percent of CX practicioners claiming it was their biggest CX challenge in 2020.
The majority of CX practitioners cited building a customer-first culture as their top challenge. Source: The Global State of Customer Experience 2020.
In this exclusive CX Network guide, we look into the benefits of focusing on customer centricity, its challenges, and how brands are using this strategy to enhance user experiences and boost customer loyalty.
What is customer centricity?
Customer centricity is a business outlook that focuses on improving a brand’s customer experience to help it win, serve, and retain customers. It aims to increase understanding of and alignment with customer ideals by putting them at the forefront of CX decisions, actioning their voices to enact change.
By introducing customer centricity, businesses are able to make both new and existing customers feel valued by actioning their requests and showing customers in real time that their feedback affects the way the business runs. By providing a more tailored and relevant experience, businesses can ensure that they provide the best value service to their customers.
A business can be said to be customer centric when, at all levels, decision-making, investment and staff behavior are concentrated on satisfying the needs of the customer to drive a competitive advantage and positively influence purchasing behaviors.
A customer-centric culture is made up of several factors, but arguably the most important is that the entire organization has a single, integrated, data-driven understanding of the customer.
What are the challenges of being customer centric as a business?
While becoming customer centric can be beneficial to companies, its implementation can be difficult.
Being customer centric can lose precedence in business when company leaders are more preoccupied by other corporate concerns. This has been shown consistently over the last four years of research, with hundreds of CX practitioners reporting their struggles to build customer-first corporate cultures.
The challenges faced when attempting to implement a customer-centric culture are exacerbated by poor data hygiene and management.
Siloed data and incomplete customer profiles will complicate the progress of most CX projects, while poor data management will blur the visibility a company has on past purchasing behaviors and customer preferences, which are integral to building a view of the customer.
More than half of companies (55 percent) operate with data siloes in place, where individual departments make decisions independently without regard to the corporate culture or focus. This not only means that customer centricity may not be implemented as a whole across this business, but can also lead to toxic internal cultures where customer-first strategies are seen as the work of other departments rather than the company as a whole.
Additionally, companies may not see an immediate result when implementing a customer-centric culture, leading to frustration within employees.
Anders Normann senior director of customer experience and sales platforms at DSV, says of building a customer-first culture: “It is long journey and most companies need at least five years to see measurable impact. So CX colleagues – be patient, be persistent and stay in the race with us. Keep in mind that it is a marathon – not a 100-meter dash – that you signed up for.”
How to implement customer centricity?
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Listen to voice of the customer data and action it
Strong data management is key for implementing customer centricity. In order to track and deliver what customers want based on insights to drive long-term loyalty, brands must place more value in data quality, customer intelligence and marketing technology.
Using customer feedback as part of this data is key, as is encouraging customers to give feedback in order to ensure the business strategy is aligned with what customers actually want.
DSV’s Normann explains that the company introduced a program to encourage feedback: “In DSV [we] established a customer success program where we collect feedback from the customers and feed it back to the organization. This enables a better understanding of what our customers are saying and what they suggest for improvement.”
Sean Cramer, director of VOC at Google, states in The Global State of Customer Experience 2020: “Insights without actions are absolutely useless. If there is no action to resolve customer concerns, then we are spinning our wheels to create shiny dashboards that capture and learn as much as possible, but if there is no action it is useless – no progress is being made in reality.”
These insights can be actioned by boosting data integration across multiple sources into one centralized location to create a single source of truth for customer data. This is done by pulling together the likes of voice of the customer (VoC) data, operational data, financial data and interactional data.
Once this data is in a centralized location, companies can analyze this data and begin proactively engaging with and anticipating customers’ needs in real time.
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Build a single view of the customer
To implement customer centricity, a data-driven framework must be built. One of the most important factors of a customer centric model is that the entire organization has a single, integrated, data-driven understanding of the customer. In CX Network’s Big Book of Customer Insight and Analytics 2020, 29 percent of CX practitioners cited ‘consistently democratizing customer data to the relevant business units’ as one of the biggest challenges they face.
Over a quarter of CX practicioners cited 'consistently democratizing customer data to the relevant business units' as a top data challenge. Source: The Global State of Customer Experience 2020
In order to combat this, the company must have the structures in place to enable people to use this knowledge in a way that spurs repeat business, encourages loyalty and drives profits.
This framework should include: a unified mission statement; the appropriate data to establish a view of the customer; investments in IT software, for example master data management, to support data-driven insights; and value-based metrics to define the success of the company.
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Cultural shifts
Creating a cultural shift by unifying your organization under a single mission statement can help introduce a customer-first culture.
Under this unified culture, executives and department leaders spearhead efforts to unite everything from marketing and sales to products and services, from internal systems to performance metrics, and beyond in order to make sure that all decisions, at all levels of the company, are made with a customer-centric mindset.
The most important thing about this cultural shift is to make sure it is enacted within a company from the top down. A shift in culture must begin with leadership, and executives and department leaders must maintain the focus on the customer in order to successfully create a unified company mindset.
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What are the three key benefits of customer centricity?
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It unifies company culture
By having a single focus, customer centricity allows companies to unite around the goals that matter to customers most. In addition to supporting goals and operations, this can help the company put forth a common face identifiable to the consumer, as all departments are focused on the same outcome.
This can also help boost employee satisfaction by making employees feel they are making a real difference to customers. Fred Reicheld, creator of NPS says: “In a customer-focused company, I think the primary duty is to put employee teams in a position where they can enrich customer lives, or win standing ovations from their customers. That is what inspires teams. It’s what attracts the best employees, and makes them innovate and serve customers well.”
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It leads to new and growing relationships with customers
Customer centricity allows customers to feel valued in by a company, and means they are less likely to churn. Research has shown that checking in with customers at the right time is a critical way to proactively address problems customers may face and to build trust in the relationship.
In addition to this, using a customer-centric model demands a deeper and more unified understanding of consumers and their individual preferences. By supplying employees who work directly with customers with this understanding, they will be able to create a tailor-made experience for them, thereby growing their relationship with them.
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It makes addressing customer needs easier
As a customer-centric strategy relies on creating a dialogue with customers, it means businesses are poised to swiftly address customer needs as soon as they are raised and is an efficient way to boost customer satisfaction. This in turn helps boost customer loyalty, as customers feel that their complaints are being listened to and addressed.
Ritanbara Mundrey, global consumer and marketplace insights manager at Nestlé, was able to action customer insights by recategorizing calls that were originally marked as complaints.
Mundrey notes: “We were missing out on 84 percent of our customer insights. When we began to look into the way things were analyzed we realized that understanding the context and urgency of customer engagements is critical…You can have a lot of data and tech experts to work on building a system from scratch, but first you have to understand what the consumer really needs.”
Read more
Access the content below for more resources dedicated to customer journey mapping:
The quest for data-driven engagement in APAC and the Middle East, CX Network, 05/10/2021
How to transform reactionary customer operations into proactive drivers for customer centricity, CX Network, 03/22/2021
Ali Bouhouch of Sephora on automation and customer centricity, Seth Adler, 02/12/2019
Shep Hyken on how leadership sets the tone of culture, Shep Hyken, 04/26/2019
Global report: Maximising the impact of customer-centric innovation programmes, CX Network, 05/03/2019