Customer Centricity: How to Ensure Your Organisation is Customer Centric

Peter Drucker wrote in his book The Practice of Management (1954) that ‘it is the customer who determines what a business is’. This sentiment still firmly holds true today, as consumers increasingly expect personalised shopping experiences from aspirational businesses that desire to have a positive impact on the community, country, or world in some way. Across this series of articles, Daniel Fitzsimmons explores the role of customer-centricity as a mechanism to support the delivery of superior customer experience and business profitability.

In the first article of the series, Daniel explains the concept and mindset of aligning a business to the customer as opposed to the product, and initial ways that this can be internalised throughout the wider organisation.

What Makes a Customer-Centric Organisation?

Customer-centricity stands in contrast to product-centric business, providing an interesting juxtaposition when discussing the delivery of business value and customer satisfaction:

• Typically, a product-centric company focusses on, as the phrase suggests, a product and its features, and attempts to sell this product to as many customers as possible. Thus, the business selling this product is organised around product management, with resources allocated to the delivery of a superior product. 

• On the other hand, a customer-centric organisation implies the creation of business structures and systems which are aligned to the development and delivery of superior customer value. A customer-centric business attempts to understand the needs of its customers, and designs solutions around these needs.

Customer-centricity is gradually becoming a more appealing means of securing new and future business, concurrent with the greater demand on businesses to prioritise the expectations of their customers, who are becoming increasingly willing to pay more for solutions which align to their beliefs. However, the route to internalising this customer-centricity to the core of a business strategy requires significant investment, and often an evolution of pre-existing systems and the organisation’s process landscape, culture, and financial metrics (Shah et al 2012). 

In other words, becoming a customer-centric organisation requires a total reimagining of the organisation’s structure and, critically, its identity. Failure to define and adhere to an ‘identity’ that aligns with the target market, and to incorporate this strategic direction into everyday business operations can lead to a gap between strategy and execution (Leinwand et al, 2015).

Payne and Frow (2005) identified five processes that a company can leverage to become customer-centric:

a) The strategy-development process which includes not only a business strategy, but also a customer strategy.

b) The dual value creation process that is at the heart of the exchange process.

c) The multichannel integration process that encompasses all the customer touch points.

d) The information-management process that encompasses all of the customer touch points.

e) The information-management process which includes the data collection and data analysis functions.

f) And the performance-assessment process that ties the company’s actions to company performance.

Each of these processes requires a cross-functional coordinating mechanism to be successful, and are reliant upon data acquisition and transformation.

Data Democratisation

Despite being considered a strategic asset, most of the data that companies generate today remains unused due to limited access and insufficient funds. As such, the democratisation of data can function as an enabling mechanism to achieve increased customer-centricity and foster long-term customer engagement (Zeng and Glaister 2018).

Data democratisation initiatives empower and encourage employees to use data to extract business value. Data democratisation can be enabled through provision of the following:

1. Increased accessibility for all business associates
2. Self-service analytics tools and dashboards
3. Data and analytics training
4. Cross functional collaboration mechanisms
5. Promoting a data driven decision-making culture

Furthermore, a commitment from leadership to create the systems and mechanisms required to allow easy access to data sources is critical to the operationalisation of data democracy. For example, within the auto industry, it is typical to have 2,000+ applications on multiple platforms and, as such, data can become siloed – owned by subject matter experts or product managers. To address siloed information pools, organisations can consider the creation of data lakes and data lake houses to support ease of access and support user interaction (Porter, M and Heppelmann, E. 2015).

The adoption of data democratisation can be further improved by the development of a data enablement team, as well as providing the governance and security mechanisms required to achieve compliance goals before being implemented at an operational level.

The data collected from this directive can subsequently be used in the following operational frames to gain further insight into the customer experience of your product or service:

• Customer Journey Mapping – tracking and analysing customer interactions with products and services across online and offline channels.

• Increased Personalisation – increasing the personalisation of customer experience based on user behaviours.

• Customer Feedback / Satisfaction – transparent feedback from multiple sources can be leveraged to improve products and services.

• Customer Lifetime Value – calculating a customer’s CLV allows organisations to make informed decisions about customer acquisition targets, amplifying the voices of key customer segments.

• Customer Segmentation – using customer-specific data, organisations are better positioned to segment customer groups and create targeted marketing campaigns and personalised experiences.

Altogether, effective data operationalisation, supported by empowered employees, leads to improved insights around customer needs and preferences, as well as the potential for predictive analytics to identify future product offers (Porter et al, 2015).

In short, for data democratisation to be effective, business leaders must create a data-driven culture and mindset within the business. To achieve this goal, leadership must position the use of data as a critical input into decision making, and invest in the tools, mechanisms, and training required to enable data within the organisation. To this end, data democratisation can create a data-driven culture, centred around a customer-centric mindset.

Creating a Customer-Centric Mindset

When approaching customer-centricity, it is easy to project standard operational models which fulfil a ‘known’ solution against customer experience, rather than directly addressing what it means to be customer-centric.

“The most important single thing is to focus obsessively on the customer. Our goal is to be earth’s most customer-centric company.” Jeff Bezos

Customer-centricity is not simply a business model. It involves a mindset transformation at all levels of a business, requiring a deepening of the personal, operational, procedural, and organisational operations to align with the customer. To cultivate this customer-centric mindset, you need to understand a customer’s needs, expectations, as well as to predict future requirements (Porter et al, 2015). This involves focusing on the customer, to think and feel like them, to see the world from their point of view, and to develop complete solutions for the user’s needs, all the way ensuring that you leverage iterative innovation to evolve toward an ideal solution.

Three ways to achieving a customer-centric mindset include:

1. Hiring for customer centricity
2. Facilitating direct customer interactions
3. Rewarding and incentivising customer-centric measures

For customer-centricity to be effectively operationalised, we must marry culture, strategy, and rewards to the delivery of a superior customer experience. 

Conclusion

As I have demonstrated in this initial article, customer-centricity is becoming a pre-requisite to future success, as consumers increasingly expect personalised offers that align to a broader societal shift in consumption habits. As I have begun to outline, and will continue to across the following two articles, implementation of a customer-centric organisation requires the creation of a culture of customer targeted curiosity, supported by a digital and operational landscape that allows for the capture and ingestion of data to create digital insights. Through the operationalisation of these measures, a business will position itself to secure future revenues and an increased % of the customer wallet.

In the next of these articles, I will discuss how the foundations outlined above can be channelled into purposeful value creation, leading to palpable and transformative customer satisfaction.