Customer Centricity – Why Building A Customer-Centric Business Matter?
The shift in consumerism has compelled companies to take a closer look at their marketing approach. Companies are abandoning traditional marketing strategies that are either company driven, product-driven, or sales driven and embracing a more customer-centric approach. This has resulted in more companies putting customers at the heart of their business. Today’s companies are making a conscious effort to understand customers’ voice and their needs. Companies recognise that customer-centricity is a driver for revenue growth, customer loyalty, and retention.
Decades ago, when customers had fewer choices, companies were able to get away with mediocre products and customer service. But, with rapid advancement in communication technology and e-commerce, customers today have created greater accessibility to more product information and variations in product options. Empowered customers are the driving force behind this digital transformation towards customer-centricity.
What is customer-centricity?
Customer-centricity is defined as the way of doing business that puts the end customers as the focus of every business decision. A truly customer-centric business aligns their organizational structure around the customer, ensuring that every customer touchpoint reflects the company’s core value, and fosters transparency at every stage of the customer journey. It builds customer trust and loyalty which leads to better retention.
Truly customer-centric businesses provide positive customer experience before, during, and after a sale to drive repeat business. They are more than just great customer service. Customer-centric businesses spend years creating a customer-experience focused culture that fosters meaningful and long-term relationships with their customers.
Why is customer-centricity important?
Customer-centricity is important because it helps companies to maintain their profit revenues. A company cannot survive without acquiring and retaining customers. The cost of customer acquisition has risen by 50% in the last five years. It can set back companies 5 to 25 times more to acquire a new customer than to retain an existing one. As the cost of customer acquisition continues to grow, it’s no longer a viable marketing strategy. Increasing competition and decreasing number of net new online customers is shifting the focus from customer acquisition to customer retention. Customer-centricity facilitates higher retention rates which help businesses to maintain their bottom line.
Customer-centric businesses design products according to the customers’ needs, anticipate what they want next, and provide satisfactory customer service throughout the journey; creating more opportunities to convert prospects into customers, and customers into brand advocates. Brand advocacy works in the same way as word-of-mouth marketing and has a big impact on how customers perceive the company. To create a positive brand identity, companies must distinguish themselves with great customer experience.
In a sea of endless noises, it’s difficult for marketers to set themselves apart from the competition. More business leaders and marketers are driving their businesses to customer experience-based differentiation. Research by Deloitte and Touche shows that customer-focused businesses are 60% more profitable than those who are not. Hence, customer-centricity has become a priority for high-performance companies. In contrast, organizations that are unable to become customer-centric are struggling to maintain a sustainable revenue stream.
What are the challenges for customer-centric marketing?
Customer-centric businesses are not built in a day. It takes years of significant investments in customer-focused strategies and digital transformation to make a business truly customer-centric. This is more difficult for big corporations that are heavily reliant on legacy based frameworks. Smaller companies fared better as they are more agile and rapid when implementing systematic changes.
The inbound marketing space is overcrowded, and it’s proving to be a challenge for marketers. The overabundance of options is slowing the growth of email and social media marketing. More customers are filtering out content and using reference and recommendations to curate content that are most relevant to them. As social media usage grows rapidly, the competition has become increasingly stifling.
Consumer dynamics have changed since the last economic downturn. Now customers have power over brands, and not the other way around. This change has contributed to growing customer expectations. Marketers can’t just rely on ingenious advertising to boost growth. Informed customers have grown more selective and skeptical about brands in general; they have endless options to replace those with poor customer service. They rely more on what the company’s existing customers have to say about customer service rather than the company itself.
To create sustainable business growth, marketers need to build customer-centric experiences from the awareness stage to the post-purchase stage. Every initiative must keep the needs of the customer at the core of it, not as an afterthought. Businesses that are winning customers are the ones who treat them with respect, provide great customer service, and build long-term relationships with them. Customer-centricity must be at the core of all channels of communication, to ensure a seamless experience for the customers.
How to become a more customer-centric company?
Company wide culture
Customer-centricity must not be limited to only marketing strategies. It must be at the heart of everything an organization does. Customer-centric organizations share all relevant customer information across all departments to enable uniformity in company culture.
Research your customers
To be customer-centric, businesses must have an in-depth understanding of the target audience, their needs, and pain points. Product development, marketing strategies, and post-purchase services must be constructed around the customer and their needs.
Focus on building relationships
Brands that are committed to customer-centricity focus on building relationships rather than just selling products. The whole brand experience is designed from the customer’s point of view, leveraged to build and promote brand advocacy.
Customer marketing strategies
Companies must capture every customer-related insights and data to formulate customer-focused marketing strategies with a keen eye on keeping repeat customers happy, and retaining new ones.
Businesses have a lot to gain from investing in customer-centric policies. The road to becoming truly customer-centric is long and arduous, but it’s the path to unlock the full potential of customer value. At Alkye, we are driven to help our clients become more customer-centric; to enhance customer engagement, customer experience, and improve the brand value.