Headline article image Customer Centricity: How to Create a Customer Centric Business

Customer Centricity: How to Create a Customer Centric Business

Customer centricity can mean the difference between success and failure in business. Here’s how to make the shift.

How much do you know about your customer?

Do you know their ages, locations, needs and wants? The types of products and services they are most – and least – likely to buy?

If you answered yes, then it’s likely that your business values customer experience; if you answered no, it may be time to delve into the topic of customer centricity.

What is customer centricity?

Customer centricity means putting your customer first, and at the heart of everything you do as a business. Customer centricity is about truly understanding your customer, so you can anticipate their wants, needs and communication preferences.

“Being customer centric means knowing the most valuable customer for your business, and configuring your business to serve them well,” says retail and digital expert Terrence Teh, strategy director at Pitcher Partners, a Melbourne-based firm that works with retailers to improve customer centricity.

"Being customer centric means knowing the most valuable customer for your business."

- Terrence Teh, strategy director at Pitcher Partners

Over the past decade – as sales and marketing technology has offered increasingly in-depth insights into shoppers and their buying habits - many brands have moved from product-centric to customer-centric models.

In other words, instead of creating a product or service and then selling it to as many customers as possible, more and more brands are increasingly putting their customer first, and creating or selling products or services that are suited to them. That's customer centricity.

Why does customer centricity matter?

Customer centricity is good for business. A 2015 Bain & Company study found that brands that excel at customer experience grow at four to eight per cent above the market.

How to measure customer centricity

There is no single, standard way to measure customer centricity. What works for one business won’t necessarily be right for another. After all, every business is different and so is every consumer. For example, speed of service might be important to a florist, but it isn’t as important for a wedding dress business. 

However, there are a range of ways to identify customer needs and measure customer satisfaction.

Measure customer centricity with Net Promoter Score

This is a widely used market research metric that surveys consumers on the likelihood that they would recommend your business, product or service to a friend.

First developed in 2003 by global management consultancy Bain and Company, a Net Promoter Score measures the loyalty of customers to a company. It is determined using a single-question survey and reported with a number from -100 to +100. A higher score is desirable. 

Best for: internal measurement of customer loyalty and customer service; determining whether customer loyalty is improving or worsening. 

For more information or to get NPS-certified, visit Net Promoter Score.  

Check customer centricity with Customer Lifetime Value

Measuring Customer Lifetime Value (CLV) is one another way to judge customer satisfaction, customer centricity and customer loyalty.

CLV is the total worth to a business of a customer over the period of their relationship. It costs a lot less to keep existing customers than it does to obtain new ones, so increasing the value of your existing customers is a cheaper way to drive growth in your business. The higher your CLV, the more likely that your customers are returning to shop.

Use Trustpilot to measure customer centricity

Founded in 2007, Trustpilot is a digital platform that hosts reviews from customers that have shopped with you.

Trustpilot allows customers to score businesses from one to five and leave feedback about their experience. The resulting reviews can be an excellent insight into customer focus and customer centricity.

Best for: producing social proof and displaying positive reviews to customers; offering customer insights and identifying specific issues that require attention.

For more information, visit Trustpilot.

Customer loyalty programme data and customer centricity

One way to measure customer satisfaction and centricity is to monitor the proportion of customers in your ‘most loyal’ top tier.

These customers might shop with you, say, four or more times with you per year. Divide this by the total number of customers in a year to determine and monitor your customer loyalty rate.

How to become a more customer-centric business

Increase customer focus by mapping your customer journey

Start by mapping out the customer journey to understand what it’s like to do business with you from the customer’s side of the fence.

Take the time to understand what it’s like for customers to purchase from you, both online and in-store, and how the customer seeks advice and information about your products and services.

When mapping your customer journey, consider mapping one complete consumer lifecycle – from initial brand awareness to loyal customer – as well as processes such as a first-time customer journey, a repeat purchase, email subscription or loyalty programme sign-up.

This process will help you understand customers needs and expectations, and whether your store, product and employees are meeting those needs.

When it comes to customer needs, consider practical needs such as convenience, information and price, as well as emotional and social customer needs, such as friendliness, control and fairness.

Surprise and delight customers

Another way to boost customer centricity? Surprise and delight them. It’s worth considering as it’s often the little things that count when it comes to customer experience and customer centricity.

Leading Australian cosmetics retailer Adore Beauty includes a Tim Tam in each and every order, which customers have grown to love as an element of the shopping experience. 

In the US, another business with a customer focus is Starbucks. The Starbucks mobile ordering app and personalised rewards program makes it easy for customers to order what they want and pick it up without the wait. This customer centric app has earned the company a fiercely loyal following among customers.

Do the basics well

Customer expectations have gone back to basics since the pandemic, with product range, availability, and cheerful staff and employees proving to be paramount, according to research by KPMG.

For example, IKEA won praise from customers in the KPMG research, for its easy to navigate website as digital shopping became the norm during the pandemic.

Customers who were used as survey respondents also noted that Afterpay enabled the transition to e-commerce as seamlessly as possible.

Communicate clearly

There’s a lot to be said for simple language that targets your customer segment. “Focus on identifying and knowing your customer by figuring out who you want to serve, and where the effort should be spent in creating the desired customer experience for them,” Teh says.

Check your language

One secret to real customer focus? Language. It's important that the way you communicate with customers is consistent. Businesses that market themselves as exclusive or personable need to ensure all channel touch points reflect that by providing exclusive offers, early access and previews to products before the rest of the market, Teh notes.

If your aim is to provide simplicity for customers, the processes in place for ordering, receiving and returning products should reflect that. It’s about making sure you’re true to your word.

Be available

Being customer centric is now more important than ever, and using digital channels to engage with your customers is crucial. Offer at least three communication points for customers, such as a chatbot on your website, an email address, and active social media contact points, suggests Teh. 

After all, there's nothing more frustrating for customers than being unable to reach you – whether that's regarding questions, feedback or complaints – when they need to.

Survey your customers 

Want to determine whether you're meeting customer needs? Ask them. Seek feedback by surveying shoppers about why they buy from you, and what makes them choose you over your competitors.

Ask customers if you were to make improvements to make your business better, what they would be, Teh says.

Be seen

A strong online presence on social media and other digital platforms is also critical for maintaining your business image and brand throughout the pandemic – so it’s not a case of out of sight, out of mind.

Make sure you’re responding to customer questions promptly – if someone wants to buy from you, it's important that you're responding to their queries, so they don’t decide to purchase elsewhere. After all, your input could be what secures the sale.

Customer centricity is all about putting customers and customer service at the heart of your business. Following these steps should help you make the shift.

All references to any registered trademarks are the property of their respective owners. Afterpay does not endorse or recommend any one particular supplier and the information provided is for educational purposes only.


Written by
Nina Hendy
Nina Hendy is a business and finance journalist who contributes regularly to the Sydney Morning Herald and The Age. She also written a number of publications including Fairfax.
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