Customer centricity is by no means a novel concept. It always has been on the back end, with companies unconsciously picking up some of its principles and applying them to their business culture. However, now that we’ve transitioned into a world of new normalcy and people valuing experience over features, solely following a product-centered approach will no longer cut it in 2021. And, if you’re one of the companies that refuse to change, you run the risk of falling behind your competition and losing out on market share.
So, today we’ll be focusing on the benefits of a customer-centered approach and what it means to adopt a customer-centric culture into your business. We’ll be looking at the key advantages and disadvantages of doing so and finding out whether customer-centricity is a step in the right direction. Plus, we’re still in the first quarter of the year 2021, which gives us ample time to propose readjustments in the coming months.
What Does Customer Centricity Entail?
As the name suggests, customer-centricity basically refers to a framework that puts the customer’s experience first and that products/services should always positively impact the end-user. It can also be understood as a philosophy that believes business exists because of their customers and will do everything they can to keep them satisfied. Unlike product-centricity that focuses on developing the most innovative offerings, customer-centricity focuses on providing the best experience.
#1 Strategies That Emphasize Customer Value
Firstly, an excellent advantage to a customer-centric approach is the development of strategies that emphasize customer value. Companies go beyond general features that customers enjoy and focus on the innovations that matter most. They pick apart what their target audience is asking for and strive to provide that collective need.
- Feedback Drives Innovation: To provide customer value, one massive factor behind customer-centricity is its feedback-driven innovation. Responses and reviews from customers don’t act as mere suggestions but actual data that can spark innovative features. For example, in a hospice and homecare establishment, services will evolve with each patient to provide tailored care according to their specific needs.
- Superior Experience: As a result of a heavy emphasis on satisfying the customer’s needs, businesses that practice customer-centricity also provide superior customer experience. So, when compared to the typical company, your customer support and service line will always come out on top and your edge against competitors in the same industry.
#2 Enhances Customer Relationship Management
Secondly, a customer-centric business culture also enhances your company’s customer relationship management, which focuses on understanding the customer lifecycle and consumer buyer behavior. In return, an enhanced CRM with best practices and strategies will increase customer retention and drive sales growth. Overall, improving the financial performance of a company and its profitability ratios.
- More Than Just Numbers And Metrics: From an analytics point of view, a customer-centered approach doesn’t see numbers, metrics, and graphs as “just” data. These represent the lifeline of the business, and these measurements are more than just a basis for research & development. Customer-centricity reimagines strategies that best facilitate their target audience.
- Creates Loyal And Repeat Clients: As an effect of increased customer value and emphasis on customer experience, expect more loyal and repeat clients in the process. They will be more willing to engage with your services and purchase your products because they know that you value how they feel and what they receive. Plus, this can attract more investors and increase the financial capabilities of your company.
#3 Inspires Long-Term Growth
Lastly, adopting a customer-centric business culture is healthy for your company because it can inspire long-term growth from within the business. Remember, there are two types of customers, the external and internal, and adopting a “for others” mindset will serve those who receive the products and include those who make them.
- Change in Organizational Culture: A product-centric culture can feel less fulfilling to work in and not drive productivity within the organization. There are just zero merits to making the best product, but when an employee’s or team’s outlook is to provide value to the customers, it can inspire passion and drive.
- Encourages Employees to Stay: Apart from passion and determination, employees feel more motivated to stay with your company because your values of customer-centricity resonate with theirs as well. No one wants to work somewhere that only aspires to generate numbers. They want longevity in a company that understands the needs of the end-user.
Of course, customer-centricity is not perfect, and it also has potential downsides that may not work in your favor depending on the industry. Some business landscapes heavily value getting the best of the best, regardless of the customer experience, which will put you at an immediate disadvantage in specific scenarios.
- Customer Need Are Always Changing: We can’t account for every changing trend and each new need that arises. It will stretch your business thin and run your resources dry. As a result, a company that constantly chases after a customer’s ever-changing needs are stuck in a rat-race that leads to nowhere.
- Fall Behind The Competition: When it comes to product-centricity, the approach often comes out ahead in introducing innovative features that can disrupt and render your current product offerings obsolete. In this regard, it wouldn’t matter whether you have a better customer experience or not because the competition has something better to offer.
Combine The Best of Both Worlds
In conclusion, while customer-centricity has its distinct advantages over traditional marketing strategies, solely focusing on a customer-centered approach can also have adverse effects. However, we can’t deny that some aspects of a customer-centric culture provide long-term benefits that we cannot ignore. So, the verdict lands in finding balance, to combine the best of both worlds that suit your business most.