The customer-centric strategy guide

Customer centricity is a business approach that focuses creating a positive customer experience and delivering value to customers at every stage of the customer journey. It involves putting the customer at the center of all business decisions and activities, aiming to meet and exceed their expectations.

By introducing customer centricity, businesses are able to make both new and existing customers feel valued by actioning their requests and showing them that their feedback affects the way the business runs. By providing a more tailored and relevant experience, businesses can demonstrate that they provide the best value service.

Here are some of the ways a customer-centric approach can drive retention rates and customer loyalty: 

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 Reichheld, 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.”

It leads to new and growing relationships with customers. Customer centricity allows customers to feel valued, 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.

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 in an efficient way to boost customer satisfaction. This in turn helps boost loyalty, as customers feel that their complaints are being listened to and addressed.

Ritanbara Mundrey, global head of innovation and insights for dairy at Nestlé, was able to action customer insights by recategorizing calls that were originally marked as complaints. She 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.”

While becoming customer-centric is beneficial, its implementation can be difficult – it can lose precedence when company leaders are more preoccupied by other corporate concerns. This has been shown consistently in our 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 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. This year, more than a third (33.3 percent) of our Global State survey respondents told us that they face challenges with siloed customer data, including incomplete customer profiles and disconnected customer experiences.

This not only means that customer centricity may not be implemented as a whole across the 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 among employees.

Anders Normann, senior director of customer experience and CRM at logistics company DSV, says: “It is a 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.”

Annette Franz, founder and CEO of CX Journey Inc, suggests asking yourself these 10 questions to help assess how customer-centric your organization is. The steps below outline how you can implement a customer-first strategy.

1. 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 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: “At 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.”

Customer feedback can be actioned by boosting data integration across multiple sources into one centralized location to create a single source of truth. 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.

2. 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.

To do 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.

3. Deliver personalized experiences

Customer centricity goes hand-in-hand with personalization, where messages, offers and products are tailored to each customer, driving their engagement with the brand and an increase in customer loyalty and advocacy.

Olga Potaptseva, founder of CXpanda, explains that “with rich data, machine learning algorithms are able to provide tailored product recommendations and low stock alerts, account activity monitoring to protect from fraud, healthcare appointment reminders, augmented reality for apparel or real estate shopping, subscription renewal notifications, virtual assistants such as Alexa or Siri and many more features.”

By doing this, brands can strengthen relationships with customers by showing genuine interest in their preferences and needs.

4. Create a customer-first culture

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 must maintain the focus on the customer to successfully create a unified company mindset.

How Nestlé overcame data silos to better understand its customers

An organization the size of Nestlé deploys huge caches of data in various functions, intended to deliver to the organization's business goals. However, it suffered from data silos, both between departments as well as within them. This was impacting productivity as sales teams had to dedicate time to making sense of the fragmented data they needed for their roles.

A project was launched that connected data sources so that Nestlé had a single source of truth. It also began using AI to automate data analysis and predictive analytics to forecast sales and delivery variations.

The key aim was to gain better visibility of its customer data and therefore a better understanding of their needs. Mundrey explains, “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.”

How Waitrose is personalizing online shopping with AI

UK supermarket Waitrose has deployed a number of AI solutions to improve its online shopping experience. 

As well as operating more than 400 brick and mortar stores and an online delivery service, the retailer exports goods to more than 50 countries.

In 2023, Waitrose began leveraging AI to improve its online search and browsing experience, by learning from customers’ browsing habits and choice of products. The solution will help customers fill their online baskets faster and with less clicks.

The AI will also provide suggestions based on customers’ searches, for example ideas for food pairings, with the aim of creating a more personalized experience for shoppers.