A customer-centric way belonging to doing business is focused atop providing a positive customer experience prior to plus subsequent to the sale.
Why should companies have this focus?
In order for drive repeat business, enhance customer loyalty plus improve business growth .
However, a customer-centric company requires more than offering good customer service .
Both Amazon as well as Zappos are prime examples belonging to brands that are customer-centric as well as have spent years creating a culture encircling the customer plus their needs. Their commitment inside delivering customer value is genuine. In fact, Zappos is happy towards fire employees in case they do not fit inside their customer-centric culture.
But, how important is being customer-centric?
Some time ago, Econsultancy asked which the most important characteristic was inside order for establish a truly “digital-native” culture.
The answer towards that question plus leading the responses together with 58% was for be customer-centric.
Yet, according for CMO Council , only 14% belonging to marketers believe that customer-centricity is a hallmark belonging to their companies.
Here’s the thing:
Executing a successful customer-centric strategy doesn’t happen overnight.
Let’s explore ways towards create a customer-centric strategy that connects your business towards the unique needs belonging to your customers.
What is customer-centricity?
Customer-centricity is a business strategy that’s based on top of putting your customer first plus in the core belonging to your business inside order for provide a positive experience as well as build long-term relationships .
When you put your customer in the core belonging to your business, plus combine it accompanied by Customer Relationship Management (CRM) , you collect a wealth associated with data, what gives you a full 360 view belonging to the customer . This data can then be used towards enhance your customer’s experience.
You can use customer data for understand buying behavior, interests plus engagement
You can identify opportunities for create products, services, as well as promotions due to your best customers
You can use customer lifetime value towards segment customers based on top of top spenders
Research via Deloitte plus Touche found that customer-centric companies were 60% more profitable compared towards companies that were not focused atop the customer, plus 64% belonging to companies accompanied by a customer focused CEO are more profitable than their competitors.
Furthermore, 90% associated with companies compete solely on top of the basis associated with customer experience.
Companies that focus on top of their customers are able for provide a positive customer experience by means of their entire journey. To accomplish this, companies must undergo a massive shift inside their organization’s structure plus culture.
The challenges associated with becoming a customer-centric organization
The power shift amidst brand as well as customer happened while the economic downturn within the late nineties just as customers became more selective inside that brand they chose towards spend their money with.
The winning brands were the ones whose treated their customers accompanied by respect, offered great service, plus built a relationship together with them that still exists today.
During the same period, another game-changer took place – social media. Social media marketing (and accompanied by it social selling ) changed the way customers interact accompanied by brands as well as became a major part associated with the customer journey .
In a recent report through Global Web Index, 41% associated with social media users find outwards regarding new brands alternatively products via social media ads, recommendations, alternatively updates atop brands’ pages (up stemming from 32% inside 2017); 45% belonging to consumers use social networks towards research brands (a 5 points increase since 2017).
One inside three customers find outwards concerning new products, services as well as brands by means of social media.
Only within the US, 83% belonging to online shoppers are influenced via their friends’ social media posts inside their purchase decisions.
Social media is just one associated with many digital channels that is changing the landscape amidst companies plus customers.
Research reveals that companies struggling towards become a customer-centric organization are unable for share customer information through departments as well as lack an aligned culture surrounding the customer’s needs.
Most companies do not have all belonging to the components inside place for claim they are customer-centric, nevertheless the most important part towards remember is this:
Customer-centricity starts through focusing atop the thing that customers need as well as how they want for interact together with your business – not your products, its features, alternatively revenue model.
By designing your company stemming from the customer’s perspective, your organization will be able for meet the customer’s needs as well as deliver a positive experience.
5 Best practices for becoming a customer-centric company
Becoming a customer-centric business allows you towards anticipate customers’ needs as well as delight them together with products plus services.
Consider the CEO belonging to Apple, Tim Cook, whom said, “ Our whole role inside life is for give you something you didn’t know you wanted. And then once you get it, you can’t imagine your life devoid of it.”
Apple’s entire strategy revolves encircling customer-centricity. Their product makes customers fall inside love plus their Apple Centers provide world-class customer support for help them get set up as well as outwards the doors together with a smile atop their face.
Thus, a customer-centric brand creates products, processes, policies as well as a culture that is designed for support customers accompanied by a great experience stemming from initial discovery for point associated with purchase as well as beyond.
To achieve better customer-centricity, here are five best practices for help your business stand out:
Hire due to customer success . Employees are the front-facing workforce that will shape many belonging to the experiences accompanied by customers. Regardless associated with role, focus atop hiring talent that can be aligned accompanied by customer-centric thinking plus the importance associated with customer experience on your business.
Put relationships first. Customers are not numbers towards be measured plus analyzed inside a revenue performance report. They are people as well as benefit greatly whenever you establish a mutually beneficial relationship together.
Democratize customer data. Adopting a new customer-centric strategy requires centralized access for customer data as well as insights. Having a CRM database can help facilitate a better understanding associated with customers for provide a unified front that delivers better customer experiences.
Connect company culture for customer outcomes. Employees will be motivated through a customer-centricity strategy at the time actions can be linked towards results . For example, strategies towards reduce customer wait times alternatively making transitions easier because of a customer can be captured inside real-time for highlight successful strategy implementation .
- Define your CX strategy. A customer experience strategy comes stemming from your brand plus business strategy. In your brand strategy you’ll lay outwards exactly the thing that customers expect stemming from your brand; a CX strategy is how you meet those customer expectations .
3 ways for measure the success belonging to a customer-centric company
Not every organization will have the same customer success metrics for measure customer-centricity. However, the three most important customer-centric metrics that should be carefully monitored are churn rate, Net Promoter Score as well as customer lifetime value (CLV).
1. Churn rate
Acquiring new customers is becoming more difficult. Therefore, more companies are investing inside keeping existing customers instead belonging to trying towards find new ones. Here’s why:
Acquiring new customers can cost up for 5x more than keeping existing customers
A 2% increase inside customer retention has the same effect on top of profits similarly to cutting costs through 10%
On average, companies lose approx. 10% belonging to its customer base each year (also known just as customer churn )
Companies accompanied by a high retention rate grow faster.
The key for improving retention rates is for understand the cause people leave, as well as the cause people remain customers .
Call Miner’s Churn Index Report reveals that $35.3 billion is associated accompanied by unplanned switching towards a different brand due towards triggers that could have been avoided. For example, customers were more likely for leave a brand if:
- Knowledgeable customer support, alternatively super agents, can address customer needs via emphatically listening plus addressing an issue then solving it promptly
- Companies lacked automated self-service channels , such similarly to a knowledge base , for solve issues on top of their own
- Customers not feeling rewarded due to their loyalty during the time new customers receive onboarding benefits as well as bonuses
Once known, you can calculate churn rate via measuring the number associated with customers whose left within the last 12 months divided via the average number belonging to total customers (during the same period).
2. Net Promoter Score
Are your customers happy? How do you measure customer happiness?
The answer is via NPS .
NPS, alternatively Net Promoter Score, focuses on top of uncovering customer loyalty through asking only one, simple question:
Each time a customer responds towards this question, the answer is then segmented based on top of predefined criteria:
Promoters (9-10): These people are inside love accompanied by your product alternatively service plus are likely for refer you for potential buyers. The customers whose rate you a 9 alternatively 10 are repeat customers plus will have a high customer lifetime value.
Passives (7-8): These people whom rate you a 7 alternatively 8 are content together with being a customer belonging to your business, nevertheless are the most likely towards switch for a competitor should they find a new alternatively better product.
Detractors (0-6): These people are not happy together with your product alternatively service as well as are likely towards damage your brand reputation via sharing their negative experience together with their friends, family as well as connections.
The more Promoters you have, the healthier your business. It’s simple, really.
And the fact that it’s simple towards implement plus measure makes the NPS a favorite accompanied by company boards plus executive committees.
3. Customer lifetime value (CLV)
For a customer-centric business, the most valuable “asset” is their customer base .
If you’re investing within long-term relationships , you can calculate the “health” associated with the relationship together with customer lifetime value alternatively CLV.
CLV measures the amount associated with revenue a customer contributes towards your business because of similarly to long just as they are a paying customer. It starts together with their first purchase plus ends whenever they stop doing business together with you.
To calculate CLV, add up the total revenue you have earned plus multiply that together with the length belonging to the business relationship . Then, deduct the initial cost belonging to acquiring them.
For example, provided that a customer spends $1,000 annually, as well as the average “lifetime” belonging to a customer is 10 years, then you multiply $1,000 through 10 years ($10,000). Now, subtract the cost belonging to acquisition (in this case, we’ll estimate $1,000), as well as the CLV is $9,000.
Not bad, right?
Calculating CLV helps you understand the cause it makes sense towards invest inside keeping your customers.
But, rather than looking in CLV purely stemming from a revenue perspective, you should be looking in it stemming from a value perspective – what is the cause I love Dennis Shiao’s take atop Customer lifetime value.
The shift towards becoming a truly customer-centric organization is both complex plus long.
However, do not be put away from through this similarly to even the smallest changes for policy as well as processes can have a significant benefit because of both employee plus your customer.
Being a customer-centric organization is the Holy Grail towards unlocking the true potential associated with customer value. Always put yourself within the shoes belonging to the customer as well as minimize customer effort as well as maximize customer value.
Do you consider yourself a customer-centric organization?
The best CRM software plays an important role within becoming customer-centric just as this is wherever all associated with your customer data is stored. See how
BusFine CRM can help your business through signing up due to a free demo .