It’s easy for a company to say it values customer-centricity, but it takes more than a few customer surveys to actually be a customer-centric organization. Top companies like Apple, Netflix, and Slack have making customer-centric business decisions since their launch. As a result, their annual revenue increases every year.
This piece will cover what a customer-centric organization is and why customer-centricity is important. We’ll also discuss the challenges of becoming a customer-centric organization, how to build a customer-centric culture, and how to measure the success of your efforts.
What is a Customer-Centric Organization?
A customer-centric organization is one that works to provide a positive experience and build lasting relationships with its customers. Before making any business decision, customer-centric organizations consider how the outcome will affect their customers.
While many companies throw around the word, “customer-centricity”, there are organizations that genuinely care about their customers and make business decisions with them in mind. A great example is Spotify.
Spotify’s algorithm works to curate unique playlists that reflect your tastes. This way, it’s easier to discover new music or podcasts that you’ll love. It’s hard to abandon a product that anticipates your needs — in this case, the music you like — and meets them.
Why is Customer-Centricity Important?
Most entrepreneurs create new businesses to make a profit, so they hire people who’ll create and execute strategies that’ll help the business generate revenue. But the truth is: without happy customers, a business can’t grow and make a profit. That’s why you should put your customers first.
A survey by Vantage Partners shows that companies that have “very mature” customer-centricity experienced 2.5x more revenue growth than companies that had “very immature” customer-centricity.
This makes sense. An organization that puts its customers last on its decision-making criteria will end up creating the wrong products and investing in futile marketing messaging frameworks.
On the flip side, a customer-centric organization will anticipate its customers’ needs, build products that meet those needs, and provide excellent customer support that’ll keep customers paying for the product. These loyal customers usually respond well to upselling — which can have a major impact on a company’s revenue (and profits).
Challenges in Becoming a Customer-Centric Organization
Cultivating a customer-centric organization might seem simple, but it’s easier said than done. Below are four common problems you may encounter in a bid to prioritize your customers.
- Building a customer-centric culture
Incorporating customer-centricity into your organization involves transforming your entire work culture into one that prioritizes your customers in all things.
It can be hard to do this because many employees don’t react well to change. Change can be uncomfortable and unfamiliar, so you’ll have to gradually incorporate customer-centric values throughout the entire organization.
A good way to do this is to encourage your employees to answer customer-centric questions like these:
- How will this new product/feature benefit our customers?
- In what ways will this new technology improve customer interactions with us (and vice versa)?
- How will this new process improve the customer experience on our website?
You’ll know that you’re successfully cultivating a customer-centric work culture when your teams are able to give definite answers to these questions.
- Siloed customer databases
A data silo is a repository of information that is controlled by one department and isn’t fully accessible to other groups in the organization. Siloed data indicates that an organization’s teams — especially the marketing, sales, and customer success teams — don’t communicate with one another.
These customer-facing departments have valuable insights into customer expectations and pain points — both of which play a huge role in product development. So, when these teams don’t share data with one another, they won’t be able to create a unified customer view that’ll form the foundation of customer-centric experiences.
You can prevent siloed customer databases by consolidating your data in one platform , such as a customer relationship management (CRM) tool, to collect and share customer feedback across the entire organization. You should also encourage customer-facing teams to collaborate with product teams on projects.
- Failure to understand your customers
Many companies mistake market research for customer research, but they aren’t the same. Market research involves grouping customers into large buckets. Customer research, on the other hand, requires you to study your customers as individuals — not as groups.
With customer research, you’re focusing on the pain points, needs, and expectations of people who’ll bring the most value to your business. Failure to understand your customers’ motivations as individuals may result in a lack of personalized customer experiences, which, in turn, may increase your customer churn rate.
A great way to prevent this is to map out each customer’s journey. This will give you a clear picture of their needs and motivations, which you can address with engaging and personalized content and experiences.
- Failure to meet ever-changing expectations
With the rapid advancement of technology, it only makes sense that customer needs evolve quickly. And companies that don’t meet these ever-changing expectations will lose their customers to competitors who do.
That being said, it helps to be genuinely curious about your customers. Whether you’re building a brand-new product or making improvements on existing features, ask your customers what they think. Get them to tell you the problems they’re facing and even make suggestions on how they’d like the problem fixed.
Also, pay attention to trends in your industry. If you discover any trend that you think might help you meet customer expectations faster, try it out.
For example, with the advent of ChatGPT, many marketers have started incorporating generative AI into their content creation, market research, and conversion optimization processes. According to Influencer Marketing Hub’s 2023 report on AI marketing, 71.2% of marketers use AI because they believe it can outperform humans at their jobs.
5 Tips for Becoming a Customer-Centric Organization
When customer-centricity is part of a company’s culture, the employees will understand that every action taken to grow the company hinges on the needs of the customer. So they’ll need to consider how each decision, strategy, and touchpoint affects the customer experience. Only then can their efforts lead to more conversions, high retention rates, and greater revenue.
Below are some tips that show you how to build a customer-centric business culture.
- Anticipate customer needs
Steve Jobs once said, “It’s really hard to design by focus groups. A lot of the time, people don’t know what they want until you show it to them.”
While this quote may be controversial, Jobs is right in thinking that people will only know they want something when you put it right in front of them.
When you ask people what they want, they often reply that they want an improved version of what already exists. Most people won’t suggest something that doesn’t yet exist because, well, they haven’t seen it yet. It’s your job as an entrepreneur to predict your customers’ needs.
You’ll need to think light-years ahead of your competition to make a product that is both unique and effective for the purpose at hand.
- Collect customer feedback
To build a customer-centric company, you’ll need to collect customer feedback on your product through communication channels like a chatbot, email, phone calls, SMS, in-app messages, and message boards. You can also collect customer feedback through surveys (Customer Satisfaction survey, Net Promoter Survey, Customer Effort Score, etc.) and user testing. The insights you gather will affect the direction that the product and marketing teams take.
If the company is large, you can pair your data collection channels with a CRM tool, which gives you a bird’s-eye view of your customers. This data helps you understand buyers’ behavior and interests, and identify new opportunities to create products and services that cater to your customers’ needs.
- Give customers multiple ways to get in touch with you
Many companies try to avoid helping “difficult” customers by making it hard to contact their customer support team. Customers have to spend a lot of time perusing the website before they can find an email or phone number to call. And even when they call or send an email, there’s no response.
Customer-centric companies take the opposite approach. Instead of withholding customer support options from their users, they give them multiple ways to get in touch with the customer service team, including chatbot, email, live chat, and phone.
- Create an onboarding process
Many companies make the mistake of leaving their customers hanging after they’ve made a purchase or subscribed to the product. This can cause customers to feel like they’re not getting the full value of the product — which can make them churn.
Customer-centric companies, however, set up an onboarding process instead of abandoning their customers. This process introduces the product/service to the customer and explains how to use it for specific purposes.
Customer-centric companies understand that each customer has unique needs, so their teams work to personalize the onboarding process to suit each customer and set them up for success.
- Use customer success tools
Many customers stay loyal to a brand because of how good their experience with the brand is. So no matter how great your product is, you’ll lose customers if your customer experience isn’t fun and productive.
A great way to improve your customer experience is by using customer success tools. These tools help customer support teams create omnichannel systems that give customers information about the product and solutions to their problems.
Measuring the Success of Customer-Centricity
The rewards of customer-centricity are usually present in intangible ways, such as brand recognition, but there are metrics you can measure to confirm whether your customer-focused efforts are working. Here are three of them:
- Churn rate
Churn rate is the percentage rate at which customers unsubscribe from a product or service. For SaaS companies, the average customer churn rate is 10%. A high churn rate means you’re losing a lot of customers (and revenue). But a low churn rate shows that, on average, customers love your product and are willing to continue doing business with you.
- Customer Satisfaction Score
If you’ve ever contacted a company’s customer support, and then gotten an email asking you “Are you satisfied with your experience?” — you’ve received a customer satisfaction survey. These automated emails collect quantitative and qualitative data about customers’ experiences with the customer support team.
A customer satisfaction score is a great way to find out if your customers are happy with your product and customer service or not. On the survey, you can ask for details about the customer’s experiences and what they think about your customer-centric strategies.
The feedback you get through these surveys gives you a microscopic view of what your customers think of your product, and what they like/dislike.
- NPS surveys
Just like CSAT, Net Promoter Score (NPS) surveys gauge what your new and existing customers think about your product or service. They not only tell you how much your customers like doing business with you, but the surveys also tell you how likely they are to recommend your product/service to their friends or colleagues.
NPS surveys usually look like this:
Every time a customer responds to this question, they are put in segments based on the number they chose:
- Promoters (9-10): People who chose 9 or 10 love your product/service and will readily refer you to their friends or colleagues. They’re also most likely to keep renewing their product subscription with you.
- Passives (7-8): Those who rate your product a 7 or 8 don’t mind being your customer, but they’ll likely make a switch if they find a product that can fulfill their needs better.
- Detractors: (0-6): Detractors are customers that are not happy with your product/service at all, and will likely tell other people not to do business with you.
The more promoters you have, the better your chances of business growth. But if you have a lot of detractors, you’d do well to look within and figure out where you are going wrong.
Note: To get more information about why a customer gave you a particular score, add a follow-up question to your NPS survey: Why did you give this score?
Put the “Customer” in “Customer-Centric”
Customer-centricity is a framework that both small and large companies can use to attract and engage their customers. When your team understands your customers’ needs and uses them as the yardstick for measuring their decisions, you’ll have loyal customers who advocate for your brand.
Building a customer-centric organization, however, involves overhauling your entire work culture, establishing lines of communication between customer-facing teams, and adopting new technology to facilitate customer-focused decision-making.
This data gives you valuable insights into how well your customers adopt your product and when they decrease usage, among other things. This way, you can monitor the rate at which your customers achieve their goals with your product, and reach out to them when they need your help (before they churn).
