I originally wrote this article for Forbes. It appeared on their site on April 26, 2023.
Customer-centricity provides a competitive advantage for the business, both from an employee and a customer perspective. Who wouldn’t want to work for – or buy from – a company that cares about people? But some have poked holes in creating this type of organization, saying it’s challenging to build and to sustain.
What does it mean to be customer-centric?
Businesses that are customer-centric and maintain a customer-centric culture put the customer at the heart of all they do; they ensure that they make no decisions without first thinking of the customer and the impact those decisions have on customers. The customer is infused into everything they do.
I use the following to define what that looks like: No discussions, no decisions, no designs without bringing in the customer and her voice, without asking how it will impact the customer, how it will make her feel, what problems it will help her to solve, what value it will create and deliver for her.
Why it matters?
Think about your own experiences with companies you interact with day in and day out. I bet you could name a few that you believe do what I’ve described above. (There certainly could be more brands who live this!)
According to Deloitte, customer-centric businesses are 60% more profitable than their product-focused counterparts. Other benefits for the business (because of benefits for customers) include:
- Improved brand reputation: A customer-centric organization is more likely to build a strong reputation for excellent service and quality.
- Increased retention and customer lifetime value: customers want to do business with brands that listen to them, care about them, solve their problems, and create value for them.
- Increased purchases: not only do customers stay but they also buy more (of the same and of other products) and spend more. Customer-centric companies focus on relationships, not just transactions. Customers feel that.
- Increased referrals: customer love creates a literal extension of your marketing and sales teams; your customers can’t wait to advocate for your brand, and they want your brand to succeed.
- Reduced costs: when brands listen to customers and make changes and improvements as a result of the feedback, they realize operational efficiencies through process and operational improvements.
- Increased revenue: find products for customers not customers for products. It’s easier to sell products when they solve problems for customers, and they solve problems because you took the time to understand customers and the jobs they are trying to do.
- Employee retention: research by SurveyMonkey found that employees who work in a customer-centric organizations feel valued and are twice as likely to still be working for the same company in two years.
- Increased innovation and creativity: customer-centric brands are constantly listening to customers, understanding their needs and problems to solve, and looking for ways to deliver value and improve the customer experience.
That’s all well and good, as long as you don’t run into some challenges along the way to deliberately designing a customer-centric organization.
What are the challenges?
Some folks believe that building and maintaining a customer-centric culture is challenging. Of course, like any other transformation, it takes time, and there are kinks that need to be worked out and foundational elements that must be in place in order to be successful.
If customer-centricity flows through the DNA of the organization, the challenges will be minimal. In other words, a customer-centric culture should overcome a lot of the challenges that may occur otherwise. To operate your business in this fashion, it must be deliberately designed to be that way, it must be embedded in your core values.
Having said that, some of the challenges that companies may encounter on their path to becoming customer-centric (and maintaining and sustaining a customer-centric culture) include:
- Not getting executive commitment and alignment across the organization. Leaders need to set the tone and provide resources and support to make it happen.
- Culture change is hard, so they say.
- Not being able to break down or connect silos so that data and information can be shared freely across the organization.
- Holding onto the notion that if I focus on the customer, that will take away from my focus on the product and the product I’m trying to design.
- Having a “that’s not my job” mentality that must be corrected and shifted to, “We’re all in this together, for a common goal – designing and delivering a better customer experience.”
- Thinking you can make operational changes, develop processes, or update policies without viewing them through the customer lens.
- Failing to stay consistent across the board, i.e., not always ensuring that the customer truly is at the center.
- Inconsistent messages and actions – to both employees and customers.
- Not having the right technology to process customer data and draw actionable insights means that you won’t be able to respond to customer needs proactively or otherwise.
- Lacking the right processes to ensure that the customer voice is heard and used throughout the organization.
- Not training and empowering employees to do what’s right for and by the customer.
- Not training and empowering employees to take the customer voice and run with it, i.e., to do their jobs and serve their customers well.
- Not hiring the right people, those who are willing to listen to and take care of their customers. Hire for attitude, train for skill.
- Failing to acknowledge that building a customer-centric culture is not a “set and forget.” The culture is deliberately designed and sustained, but it must be maintained on a daily basis.
- Resistance to change and the inability to adapt to a new way of doing things is a hindrance.
FIVE CATEGORIES OF CHALLENGES
In the Forbes article, the editors pared down these challenges to just five categories. (This is important to note here because the follow-up article is about how to solve for these challenges – and I had to focus on the five categories.)
- Lack Of Commitment: Executive commitment across the organization is vital, especially when building customer-centricity. Leaders need to set the tone and provide resources and support to make things happen.
- Disparate Data: It can be hard to break down or connect existing silos within an organization. Finding ways to share data and information freely can help ensure nothing about the customer experience is lost in the weeds.
- Resistance To Change: Certain employee beliefs can hinder customer-centricity. For example, designers can be held back by the notion that focusing on the customer takes too much attention away from the product they’re creating. Others may have a “that’s not my job” mentality about taking customers into more consideration. They must be reminded that everyone has a common goal, no matter what their role: delivering the best customer experience.
- Ineffectual Processes And Tools: Businesses need to ensure that the customer truly is at the center. The worst thing they can do is make operational changes, develop processes or update policies without viewing them through the customer lens. Not having the right technology to process customer data and draw actionable insights means you won’t be able to respond to customer needs proactively or otherwise. The right processes are needed to ensure that the customer’s voice is heard and used throughout the organization.
- Inadequate Employee Support: Building a customer-centric culture is not a “set it and forget it” process. It requires daily commitment, and a key part of that is empowering employees. People across the organization should feel encouraged to do what’s right for and by the customer. Without the freedom to take the customer’s voice and run with it, it’ll be harder for employees to do their jobs well.
IN SUMMARY
Some might say that balancing customer needs with business goals makes building and sustaining a customer-centric organization a challenge because companies need to balance those needs with their business goals, i.e., sometimes what is best for the customer may not align with what is best for the business. Others may counter that with the fact that with the notion of “competing priorities,” which might include cost-cutting or maximizing profits.
To that I say: what’s the purpose of a business? Who are you in business for? If customers and their needs don’t align with what’s best for the business, then perhaps you shouldn’t be in business. Cost cutting doesn’t have to negatively impact your customers and the experience, and you can’t maximize profits without selling more to customers – and you’ll certainly do more of that if you listen to them and sell products that solve problems for them.
Customer-centricity is a strategy that aligns a company’s development and delivery of its products and services with the current and future needs of a select set of customers in order to maximize their long-term financial value to the firm. ~ Peter Fader
