A Definition of Customer-Centric
Customer-centric, in theory, is fairly self-explanatory. But, businesses that take a customer-centric approach do more than say they put their customers first; they make it a priority to provide an exceptional customer experience at the point of sale and after the sale to increase profits and gain a competitive edge. Truly customer-centric organizations identify their most valuable customers and ensure their satisfaction. In order to do this, organizations gather customer data from multiple sources and channels and target their most profitable customers with relevant offers at the right time.
Customer-centric is nothing new, but it is becoming increasingly important in today’s age of the customer, when organizations are undergoing digital marketing transformation, creating a corporate customer culture, and managing the customer experience. Customer-centricity needs to become a mindset across the organization with buy-in from all stakeholders, because all departments need to work from a customer-centric standpoint rather than a product-centric perspective to profit from the most valuable customers.
Customer-Centric Best Practices
Organizations need to work toward being customer-centric, rather than being customer-focused. Customer-centric organizations understand that not all of their customers yield profits. These organizations use customer analytics to gain a complete view of their customers in order to segment them. The customers with the highest customer lifetime value are those who are loyal to the company and are easy to retain. Thus, companies work to acquire and then retain these customers by nurturing relationships with them and enhancing their customer experience.
Dr. Peter Fader, author of Customer Centricity: Focus on the Right Customers for Strategic Advantage, explains that being customer-centric means focusing marketing efforts solely on the real-world, high-value customer segment in order to drive profit. Unfortunately, 66% of marketing leaders do not know how much their customers are worth, while companies have a potential 17% increase in sales when they identify and maximize top value customers.
Some of the best methods for achieving customer centricity include shifting to customer-centric marketing practices and efforts, using data to your advantage to take data-driven actions based on customer insights, and building your marketing, sales, and business around your best customers.
Customer-centric organizations keep the customer lifetime value of their customers at the center of their efforts. They do not focus on the average customer, attempt to acquire or retain low-quality customers, or spend too little on acquiring high-quality customers. Rather, customer-centric organizations have the following characteristics:
- Use customer data to better understand and segment the customer base
- Identify the best customers
- Focus on products and services for the best customers
- Use Customer Lifetime Value to segment customers
- Have a commitment to customer success
- Engage with customers from the beginning
- Demonstrate customer commitment from the top-down
- Foster a customer-centric culture
- Recognize the customer across all channels
- Design processes and policies from the customer’s point of view
- Measure what matters to customers
- Encourage customer innovation
The Value of Becoming Customer-Centric
One of the most profitable benefits of being customer-centric is increasing customer loyalty and customer retention rates. By
increasing customer satisfaction via exemplary customer experience, organizations increase their bottom line and ensure profits for the future. It has been well documented that customer retention yields better profits than customer acquisition, as increasing customer retention rates by just 5% increases profits by 25% to 95%. In fact, customer-centric companies are 60% more profitable than companies that are not focused on their customers.
For more information about customer-centric, visit our blog. For your convenience, we have linked to three of our most recent customer-centric posts below: