There has been a lot of talk in marketing about customer centricity. Instead of focusing on some abstract metrics, the company attempts to create the best customer experience. That is what most think being a customer-centric business is all about.
However, if we dig deeper, customer centricity is more than just building a good user experience. Most starting customer-centric businesses think it’s enough to just focus on support teams. However, customer centricity should encompass the company’s entire strategy. That means focusing on creating a great experience at every step of a customer’s journey.
While many different things are headed under a customer-centric approach, there are several integral parts to the strategy:
Other pieces to the customer-centricity puzzle are essentially derived from the three aspects of the customer centric approach mentioned above. Thus, it’s most important to build the strategy around them.
However, the shift to a customer-centric strategy shouldn’t be just managerial and tactical. It takes a complete cultural shift to adopt customer-centricity, therefore, in the organization, from the product team, to the customer service department, needs to be on board. Everyone, from the development to customer service departments, will be focused on providing the best user experience possible. This means internal communication and implementation are highly important when you’re starting to become a customer-centric business.
Usually, the argument is fairly simple. Customer centricity means retaining customers. If you can’t retain customers, you will eventually run out of business. Everyone knows that the most successful businesses put a huge emphasis on customer-centricity.
Some of the most successful businesses such as Amazon have been customer-centric from the get-go. Developing and using a customer-centric strategy is in fact more profitable in the long run. Deloitte has found that customer-centric businesses were ~60% more profitable than those who were not.*
Additionally, the customer is becoming more involved and more educated on brands and products every day. Social media and the internet in general allow customers to share tons of information in the blink of an eye. In fact, according to the Global Web Index, 54% use social media to research products** and 71% of people trust social referrals for buying purposes.
Companies face numerous challenges when they start the journey towards becoming customer-centric. From data silos (i.e. information being locked in one department only) to cultural pushback, the list is nearly limitless.
There are established best practices that are very actionable and useful:
Finally, you need ways to actually measure if the customer-centric strategy is working. There are three primary metrics to track: churn rate, Net Promoter Score (NPS), and Customer Lifetime Value (CLV).
Let's shortly discuss the most important customer service metrics: the churn rate, Net Promoter Score (NPS) and the Customer Lifetime Value (CLV).
The churn rate is calculated by dividing your average number of total customers by the number of customers who left in the past 12 months. A high churn rate means you’re struggling to maintain customers. Usually, that means that the customer experience isn’t up to par. It would be worthwhile to investigate the sales and customer service process. Additionally, your agents could ask leaving customers for feedback.
Net Promoter Score (NPS) is a simple measurement. In fact, you’ve likely seen one - companies frequently ask to rate from 1 to 10 how likely you are to recommend them to a friend or acquaintance. Usually, the answers are separated into three categories:
The end goal of NPS is simple - get the most promoters and the least detractors. It’s important to track the changes in each category. If your promoter audience is growing, then you’re doing great.
Finally, Customer Lifetime Value (CLV) is more of a prediction. Essentially, you want fewer one-and-go customers and more lifetime customers. It’s highly unlikely that even the most passionate clients will spend more in one go than in 10 years. You can calculate these statistics based on internal customer data, benchmark them against industry averages, and think of how you might improve them.
Customer-centricity isn’t just about delivering a good product and service. You have to implement it throughout the entire business and shift the culture towards always providing the best for the customer.
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