What Is Customer-Centricity and How Is It Different From CRM?

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Bob Thompson
Founder, CRMGuru.com
Member

Posted 18-Jan-2004 09:58 PM
CRMGuru asked David Rance, Chairman of Round Ltd. in the U.K. and an expert on helping companies gauge their customer-centricity and set a path for the future, to assess the strides that CRM is making.

To what extent did customers improve their understanding and practice of “Real CRM”—defined as a business strategy, not an automation project?

I think they all learned a lot. There were lots of burnt fingers and damaged careers. Also as the market and money got tight, companies looked harder at ROI. We have seen a see-change in approach, mainly in the last 2 month but it started just before the summer. Companies are now talking about customer centricity rather than CRM and are receptive to the idea of creating alignment across the business to ensure consistency in the customer experience, which means developing all the non-IT capabilities as wellas the obvious CRM ones. They also recognize that this means leading from the front. I am much encouraged.

Based on your client experiences, are CRM success rates improving?

Yes, because they are more circumspect about what they are doing; they are not just implementing software and expecting everything to be hunky-dory. They are focusing using scarce resources to understand and maximise the value of their customer base eg using analytics and campaigns more effectively. These hard times have done a lot of good. It may not feel like that but it’s much more real today. Segmentation, not just in marketing but across the business, is now accepted; it is recognized that end-to-end processes are fundamental to consistency and integration; IT departments are no longer spending large sums of money on the wrong software; marketing is beginning to work with customer service and, finally, software providers have embraced the ASP model—even Seibel!

What is customer-centricity, and how is it related to Customer Relationship Management (CRM)?

I suppose at some level they’re the same thing. But I think over the years, what’s happened is that CRM has become synonymous with more focused marketing activities—using intelligence from the database and setting targets to optimize it. What customer-centricity means is how the whole organization behaves towards customers, not just the touch points, the decision points, but how the whole business is organized and optimized around the needs of the customer.

David Rance
Chairman, Round UK Ltd.
www.round.co.uk

Join the discussion! Ask David a question, or share your own point of view.


Posted 03-Feb-2004 08:38 AM
Posted for Alenka Cernec [By Teri Robinson]

Dear Mr. Rance,

My name is Alenka Cernec a student of Master of European Affairs Program at the University of Lund.
I’m currently gathering information for my thesis where I am interested in researching CRM and how different country cultures influence the outcome of successful CRM. I’m on leave of absence from a large mutinational IT firm. I used to work in European Marketing Center and I quickly realized that our organization would develop CRM programs —> like success stories or reference customer programs but we made all programs for the European market instead of focusing on the local markets.
Therefore, based on this experience I am interested in material that could help me to analyse material which deals with CRM and the importance of considering local cultures rather than taking a market as a whole.

I’ve attended a course in CCS (customer centric selling) and found it very interesting however I also realized that such programs sometimes require a complete organizational change. Where I see that companies are failing today is that many have lost focus due to the economic downturn.

I would appreciate any information and guidance from your side.

Also, I would like to say that I would this website to be very useful.

Thank you for your attantion and I look forward to your response.
You can reach me at [email protected]

With kind regards,
Alenka


Edwin Setzpfand
Member Council
Member

Posted 25-Feb-2004 12:33 PM
Indeed David, I share your optimism. In addition I would say that when customer-centricity stands for “.. how the whole business is organized and optimized around the needs of the customer” and CRM, has become like a refocused marketing, CRM has moved away from customer-centricity.

Not that I want to split hairs about definitions, but where customer-centricity has a customer oriented focus—which is outside in—CRM as such refocused marketing effort does not have that.

The bottom line is, I think, that customer-centricity allows for empowerment of the customer, it helps her to do a better job and enables the customer to manage the relation with the business, while CRM-as-a-sort-of-marketing does nothing of that kind.

I would rather see CRM to develop as this customer-centric strategy, even encompassing what sometimes is referred to as CMR (Customer Managed Relationship).

Edwin Setzpfand


Edwin Setzpfand
Member Council
Member

Posted 27-Feb-2004 05:56 AM

quote:Originally posted by Teri Robinson, CRMGuru Moderator:
Posted for Alenka Cernec [By Teri Robinson]

[…] the importance of considering local cultures rather than taking a market as a whole.

[…]

Alenka

Alenka:

The distinction between “considering local cultures” and “taking the market as a whole” is more than a difference in scope. It a/o also involves some of the elements you find in customer-centricity as described by David Rance.

Being true customer-centric also means to listen to and to take serious the needs of the customers in the various (European?) countries. In order to be successful in this international CRM requires an approach that indeed does take into account the “local cultures”. Elsewhere on this Forum I’ve added some ideas about international CRM in response to questions from Magali Rome as well as related to the potential impact of the Internet in less developed areas (incl. Africa).

Some of the issues to consider “for the European market”: How to set up an (international) marketing campaign that takes into account local (national) cultures? How will you listen to, record, and respond to the customers’ needs?

Despite its “common” market, the EU still is a patchwork where it comes to national regulations for payment, product liability, taxation, privacy, and other consumer issues.

Furthermore, finding and servicing (the most) profitable customers a/o depends on Internet penetration and payment structure of a country; also something in which Europe is far from harmonized.

Language. Despite that English often is seen as the de facto lingua franca of the Web, a growing majority of the Internet users is not a native English speaker. Offering multi-language Web pages may therefore enhance your competitive edge. Two examples: CNN also has Spanish and German editions, and Google pages exist in over 90 languages. Even in Frysian (the 2nd official language in The Netherlands).

Consumer behaviour (incl. email usage and credit card usage) differs between countries and also between B2B and B2C markets. The cost of Internet connections influences the number of home users (and of users B2B vs. B2C) because with high connection costs people will only allow for short sessions unless they use the PC from their work. This will considerably influence what Email marketing campaign (incl. SEM—Search Engine Marketing) you can launch best.

With an E-business that involves several countries it is necessary to have the approach and implementation (strategy) evaluated by proper legal counsel for all relevant jurisdictions.

Regarding today’s economic downturn I would stress that being customer-centric is even more important in such a situation!

Under normal conditions almost every company has a large quantity of customers which only cost money just to keep them on board as customers. As it is much easier to retain an existing customer than to get a new one, in economic difficult times it is even more important to know which are the (potentially) most profitable customers and to retain them and to try to sell more to them.

Selling more to profitable existing customers will increase the margin. A customer-centric strategy is the key to success here. For if you know who are your best customers and what they want, you can service them and make them feel important ..

Marketing also should shift gears here. Instead of focusing on product characteristics, existing customers must be encouraged to do more business with you. After all, also they have to cope with the same downturn, although the effects may be different in different markets or sectors. Nevertheless, it can be profitable to demonstrate to key customers that doing business with you also enables them to become more successful…

When money is scarce, a full-business rollout of CRM may not be wise. Instead, a well-tuned modular approach may result in early quick wins that pave the way for subsequent stages. Also have a look at how to optimize the use of existing IT rather than replace complete systems.

And yes, in the end it requires “a complete organizational change”. As in David’s post as well as in several other contributions here on the CRMGuru Think Tank Forum—successful change management from the start is critical to the success of customer-centric CRM in a business.

Success!

Edwin Setzpfand

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Neophyteblogger
November 5, 2007
Customer-centricity is long term

Hi All

I think customer-centricity is basically about giving your customer as much leeway, treatment, satisfaction, etc as is feasible for you within your operating budget and manpower limitations. Like it or not, money does come into it. Thats the bottomline. A company puts its faith into a customer-centric approach hoping that it will pay dividends in the form of improved ROI. The ROI comes from repeat customers who become clients as well as new adds to the existing customer base.

A customer centric approach is not different from CRM; rather it is a subsect of CRM, an approach to be incorporated into the overall CRM plan and vision that a company has. Customer-centricity should go hand-in-hand with a product focus. Push and promote the product by all means but be subtle and show genuine care for the customer’s sensibilities and feelings.

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