What Does It Mean To Be Customer-Centric?

A customer-centric way of doing business is focused on providing a positive customer experience before and after the sale.

Both Amazon and Zappos are prime examples of brands that are customer-centric and have spent years creating a culture around the customer and their needs. Their commitment in delivering customer value is genuine. In fact, Zappos is happy to fire employees if they do not fit within their customer-centric culture.

Econsultancy asked what the most important characteristic was in order to establish a truly “digital-native” culture.

The business world is recognizing the value of customer experience as a key differentiator, with a Deloitte study indicating that 88% of companies now view customer experience as their biggest competitive lever.

Let’s explore ways to create a customer-centric strategy that connects your business to the unique needs of your customers.

Customer-centricity is a business strategy that’s based on putting your customer first and at the core of your business in order to provide a positive experience and build long-term relationships.

When you put your customer at the core of your business, and combine it with Customer Relationship Management (CRM), you collect a wealth of data, which gives you a full 360 view of the customer. This data can then be used to enhance your customer’s experience.

Research by Deloitte and Touche found that customer-centric companies were 60% more profitable compared to companies that were not focused on the customer, and 64% of companies with a customer focused CEO are more profitable than their competitors.

Companies that focus on their customers are able to provide a positive customer experience through their entire journey. To accomplish this, companies must undergo a massive shift in their organization’s structure and culture.

Being customer-centric is vital for any business that wants to succeed in today’s highly competitive marketplace. But what exactly does it mean to be customer-centric, and why is this mindset so critical?

Understanding Customer-Centricity

At its core, being customer-centric means putting the customer at the heart of everything you do as a business. It is a complete focus on understanding, anticipating, and responding to customer needs and preferences

A customer-centric organization views its operations, products, and services through the eyes of the customer The key metrics for success shift from internal KPIs to customer satisfaction, retention, and lifetime value

This requires a fundamental shift in mindset that permeates the entire company culture. Every decision, initiative, and process needs to revolve around delivering greater value to the customer.

Here are some key characteristics of customer-centric companies:

Customer insight driven – All strategies and decisions are rooted in deep customer insights, data, and feedback. Voice-of-the-customer research is continuous.
Customer obsessed culture – Customer experience is the company’s true north. Employees at all levels are passionate about understanding and delighting customers.
Customer journey focus – The end-to-end customer experience across touchpoints is optimized, not just siloed functions.
Proactive personalization – Interactions are tailored to individual needs using contextual data and predictive analytics.
Seamless omnichannel – Consistent personalized experiences are delivered across all channels – web, mobile, in-store, etc.
Customer collaboration – Customers actively participate in the co-creation of products, services and policies. Their input shapes business priorities.

The most customer-centric companies embed this mindset into every aspect of their operations. From product development and marketing to sales and service, the customer is at the forefront.

Why Being Customer-Centric Matters

In today’s experience economy, delivering consistently positive and personalized customer experiences is a key competitive differentiator. Here are some of the major benefits of being a customer-centric business:

Increased loyalty & retention – Customer-centricity boosts satisfaction, trust, and emotional connection with your brand, translating to higher retention and lifetime value.
Higher revenue & profitability – Loyal customers spend more and are less price sensitive. Customer-centric firms have been shown to generate 2-3x more revenue growth than competitors.
Greater brand differentiation – In a commoditized market, a stellar customer experience is a key differentiator that boosts brand preference and affinity.
Competitive insulation – Customer-centric brands are less vulnerable to pricing pressure from competitors. It’s harder for customers to switch due to habit, comfort, and emotional attachment.
Operational efficiencies – Understanding customer needs deeply allows you to optimize processes in a more targeted manner, reducing waste and costs.
Innovation advantages – Continuous customer collaboration and co-creation fuels faster, lower-risk innovation with built-in market validation.
Higher employee engagement – Employees feel more motivated and empowered when they are directly connected to customer needs and feedback.

In essence, being customer-centric allows you to maximize lifetime value while minimizing customer acquisition costs. This creates a sustainable competitive advantage that delivers profitable, efficient growth.

How to Build a Customer-Centric Organization

Transitioning to a customer-centric operating model requires strategic focus and investment. Here are 6 key steps to building a truly customer-centric organization:

1. Commit at the Top

Gaining executive-level commitment to customer-centricity is crucial. The CEO and leadership team must fully embrace customer-centric values and actively steer the cultural shift. They should communicate the vision consistently, set customer-focused goals and KPIs, and allocate resources to enable change.

2. Know Your Customers Deeply

Truly understanding customer needs, pain points, behaviors, and journey patterns is foundational. Robust voice-of-customer research through surveys, interviews, observation, and customer advisory panels reveals actionable insights. Advanced analytics can then segment customers and model their likely needs.

3. Reorient Processes Around the Customer

Re-engineering processes to enhance end-user value often requires cross-functional collaboration. All workflows from product design to fulfillment should be optimized based on the customer perspective. Remove internal silos and frictions impacting their experience.

4. Empower Customer-Facing Roles

Frontline employees must have the skills, tools, authority, and incentives to identify and resolve customer needs in real-time. Invest in employee training and communities to spread customer-centric skills and mindsets.

5. Continuously Gather Feedback

Closing the loop by constantly listening, analyzing, and acting on Voice-of-Customer feedback is imperative. Capture feedback across every channel and touchpoint to understand needs accurately and in real-time. Take action quickly to address complaints and problems.

6. Reward Customer-Centric Behaviors

To sustain change, incentivize customer-focused actions and attitudes at all levels. Tie internal KPIs and compensation to customer satisfaction or Net Promoter Scores. Publicly recognize employees delivering exceptional customer experiences.

Challenges in Becoming Customer-Centric

Transitioning to a customer-centric operating model has some common pitfalls to watch out for:

Siloed thinking – Functional silos can still derail customer experience optimization. Ensure collaboration and shared accountability across teams.
Data disconnects – Crucial customer data trapped in silos creates an incomplete, inaccurate view. Integrate data and democratize access through analytics.
Bias for action – Pressures to deliver short-term results can override long-term loyalty building. Balance quarterly targets with strategic investments required to transform customer experience.
Legacy systems – Inflexible technology systems constrain ability to capture feedback, personalize interactions, and support employees. Modernize platforms to enable customer-centric capabilities.
Encouraging innovation – Risk-aversion and fear of failure suppresses experimentation and new ideas. Leadership must actively nurture innovation and customer-led co-creation.
Measuring progress – Moving from internal process metrics to customer outcome metrics is key. But collecting Voice-of-Customer data consistently and comprehensively remains a challenge. Leverage technology to connect disparate data sources.

Key Takeaways

Being truly customer-centric has become an imperative for commercial success today. Aligning your entire company around delivering superior customer experiences results in higher loyalty, growth, and profitability.

But it requires navigating significant cultural and operational changes. Gaining leadership commitment, realigning processes, fostering cross-functional collaboration, and continuously capturing customer insights are key.

With the right strategies and persistence, transforming into a customer-centric organization will yield multi-fold returns through enhanced competitive strength and customer lifetime value.

what does it mean to be customer centric

Net Promoter Score

Are your customers happy? How do you measure customer happiness?

The answer is through NPS.

NPS, or Net Promoter Score, focuses on uncovering customer loyalty by asking only one, simple question:

Each time a customer responds to this question, the answer is then segmented based on predefined criteria:

Promoters (9-10): These people are in love with your product or service and are likely to refer you to potential buyers. The customers who rate you a 9 or 10 are repeat customers and will have a high customer lifetime value.
Passives (7-8): These people who rate you a 7 or 8 are content with being a customer of your business, but are the most likely to switch to a competitor should they find a new or better product.
Detractors (0-6): These people are not happy with your product or service and are likely to damage your brand reputation by sharing their negative experience with their friends, family and connections.

The more Promoters you have, the healthier your business. Its simple, really.

And the fact that it’s simple to implement and measure makes the NPS a favorite with company boards and executive committees.

5 Best practices to becoming a customer-centric company

Becoming a customer-centric business allows you to anticipate customers needs and delight them with products and services.

Consider the CEO of Apple, Tim Cook, who said, “Our whole role in life is to give you something you didnt know you wanted. And then once you get it, you cant imagine your life without it.”

Apple’s entire strategy revolves around customer-centricity. Their product makes customers fall in love and their Apple Centers provide world-class customer support to help them get set up and out the doors with a smile on their face.

Thus, a customer-centric brand creates products, processes, policies and a culture that is designed to support customers with a great experience from initial discovery to point of purchase and beyond.

To achieve better customer-centricity, here are five best practices to help your business stand out:

Hire for customer success. Employees are the front-facing workforce that will shape many of the experiences with customers. Regardless of role, focus on hiring talent that can be aligned with customer-centric thinking and the importance of customer experience at your business.
Put relationships first. Customers are not numbers to be measured and analyzed in a revenue performance report. They are people and benefit greatly when you establish a mutually beneficial relationship together.
Democratize customer data. Adopting a new customer-centric strategy requires centralized access to customer data and insights. Having a CRM database can help facilitate a better understanding of customers to provide a unified front that delivers better customer experiences.
Connect company culture to customer outcomes. Employees will be motivated by a customer-centricity strategy when actions can be linked to results. For example, strategies to reduce customer wait times or making transitions easier for a customer can be captured in real-time to highlight successful strategy implementation.
Define your CX strategy. A customer experience strategy comes from your brand and business strategy. In your brand strategy you’ll lay out exactly what customers expect from your brand; a CX strategy is how you meet those customer expectations.

What Does it Really Mean to Be a Customer-Centric Organization?

What is a customer centric business model?

A customer-centric business model can enhance customer satisfaction, retain customers, bring in new ones, and boost sales. With customer centricity, you begin by understanding your customer’s needs, desires, and expectations, and then frame your products, services, and campaigns to suit your customers’ needs. In this blog post, we’ll explain:

What does it mean to be customer centric?

Being customer-centric entails more than just saying the customer is top of mind. It is about truly understanding the customer, so you can anticipate their wants, needs and communication preferences, create meaningful experiences, and build lasting relationships with them. And that is easier said than done.

Is customer centric a good idea?

You might think that’s easy. But is it really that simple? Being customer-centric means anticipating a customer’s wants, needs and communication preferences. And then getting it right. If you can achieve this, you can create meaningful experiences and build lasting customer relationships.

Why is customer centric customer service important?

Putting customers at the forefront of your brand actions means customers have better experiences that better reflect what they expect. Providing a positive customer experience that is customer centric, rather than generic, is financially rewarding for businesses.