Customer Centric Organizations place the customer at the core of all aspects of the enterprise. Be customer centric is not an event or an episode but a mindset; it is the underlying sentiment of the company that willingly decides to listen to its customers.
Although customer centricity has been a growing trend for the last decades, too many companies still struggle to get it right.
Old Order, New School
Reversing the traditional value chain, customer centric companies start with the customers: their opinions, feelings and problems, working their way back to the company organisation and business model. The company’s internal resources adapt to the external world, not vice versa; structure, knowledge, processes and tools must all support it.
If the execution of this process wasn’t difficult enough, this new system is also hard to reconcile with the traditional way managers work. In Customer Centric Companies, managers adopt a more dynamic approach spending time talking to clients, listening to them, interpreting data and interacting with the sales and marketing team trying to spot consistent changes across the organisation. They would invest heavily in CRM and data analysis to promote and facilitate a customer centric culture.
At strategic level, customer centric companies would:
- Promote an organisation-wide focus on understanding customer needs
- Invest in CRM and data analysis tools to gain a deep understanding of the target market
- Align all layers of the organisation to better respond to the customer’s base
- Keeping an open dialogue with customers at every stage of the transaction: from pre-sale questions to post sale support.
A risky Process
Turning a company from product centric to customer centric is not a risk-free process.
The most obvious problem is that if managers fail in setting the new system right, customer centricity will be treated as an event or occasional episode, which will definitely hurt the customer base. Also, the overwhelming amount of data, if not properly managed, can overpower the business system. When there is too much data available in fact, managers tend to either spend an excessive amount of time analysing them or ignoring them altogether. This is why, before turning the system from product centric to customer centric, a great deal of work is needed. The change will also impact the pricing structure. In a customer centric company, the price is calculated based on the value (actual or perceived value) that it creates for the customers; in the product centric company the value is calculated almost mathematically as the sum of the costs of the product plus margin. Among all these risks, however, the most dangerous risk is tightly linked to segmentation. Promoting customer centricity in a company with an unclear customer segmentation can dangerously lead to a very confusing set of products and solutions that eventually will hurt the company and dilute the brand. Changing the company organisation to customer centric is not an easy task and needs to involve all layers of the organisation. At management level however reside the responsibility to set the system right creating the foundations for a sustainable profitable customer centric system.
In conclusion, making money is necessary for the survival of the enterprise but creating and maintaining customer centricity is essential for its growth. Ultimately, customers create the brand and spend their time and money to buy the company’s products and services; building strong relationships with them should be every business’s primary focus.
