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 your customer's 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?

Basically, it means putting the customer first and at the heart of everything you do as a business. Being customer centric means putting the focus - from marketing, employee KPIs and revenue strategy and communication - on customer needs and ensuring they be at the heart of everything you do as a business. It’s the definition of truly understanding your customer and being able to 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, an Australia-based firm that works with retailers to improve customer centricity.

Over the past decade – as technology has offered increasingly in-depth insights into shoppers and their buying habits – many brands have shifted their focus from product-centric to customer-centric metric 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 customers first and creating or selling products or services that are suited to them.

Basically, being customer centric means putting your customer first with every decision you make.

Why does a customer-centric approach matter? 

In a nutshell, it's good for business. A 2015 Bain & Company study found that businesses that excel at customer experience grow at 4 to 8 percent 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 the right approach for another. After all, just as each customer is different so is each business. For example, the speed of customer service might be important to a florist, but it isn’t as important for a bridal dress shop, where the focus is more on the overall customer experience.

However, there is a range of ways to measure customer satisfaction and evaluate customer-centricity.

Using Net Promoter Score (NPS) to measure customer centricity

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

First developed in 2003 by global management consultancy Bain & Company, an NPS 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-centricity with a focus on whether customer loyalty is improving or worsening.

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

Check Customer Lifetime Value to measure customer centricity

Measuring Customer Lifetime Value (CLV) is another way to judge customer experience with a focus on loyalty and ensure your company's employee approach, customer service strategy and marketing are where they need to be.

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 the existing customer experience is a cheaper way to drive growth in your business. The higher your CLV, the more likely that your customers are returning to shop.

Try 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 1 to 5 and leave feedback about their experience. The resulting reviews can be an excellent metric to gain insight into customer satisfaction and centricity.

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

For more information, visit Trustpilot.

Turn to customer loyalty program data to measure customer centricity

One free 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 per year. Divide this by the total number of customers in a year to determine and monitor your customer loyalty and retention rate.

How to become a more customer-centric business

Map your customer journey

Customer centricity is about understanding the customer mindset and customer needs. So, 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 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 life cycle – measuring from initial brand awareness to loyal customer – as well as processes such as a first-time customer journey, a repeat purchase, or an email subscription or loyalty program sign-up.

Surprise and delight

One way to boost customer-centricity? Surprise and delight your customer. It’s worth considering as it’s often the little things that count with 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, the Starbucks mobile ordering app and personalized rewards program makes it easy for customers to order what they want and pick it up without the wait. This app has earned the company a fiercely loyal following.

Do the basics well

Customer expectations have gone back to basics since the COVID-19 pandemic hit, with product range, availability and cheerful staff 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 online shopping became the norm during the pandemic. 

Survey respondents also noted that Afterpay enabled the transition to e-commerce as seamlessly as possible. 

Communicate clearly to maximise customer centricity

There’s a lot to be said for simple language that targets your customer segment. “Focus on identifying and knowing 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

The language you use to communicate with consumers needs to be consistent to boost customer centricity. Businesses that market themselves as exclusive and 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 consumers, 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.

Survey your customers

Being customer centric is about creating a two-way dialogue with your customers. Ask them why they buy from you, and what makes them choose you over your competitors.

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

Sure, it’s bold to ask these questions, but the answers will help you implement more customer-centric systems and processes, he 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. Being customer centric means making sure you’re responding to questions promptly. If someone wants to buy from you, make sure you’re replying to their queries, so they don’t decide to purchase elsewhere. After all, your input could be what secures the sale.

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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