Customer centricity: What you need to know to critically examine customer centricity in your company

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Everyone talks about customer centricity. But: Very few people tackle the topic in sufficient depth. There are many reasons why this is so.

In many cases, it is due to long-established, grown and thus habitual structures in the company, which put the own organization in the foreground over time – but lose the focus on the customer in return.

The following article provides you with facts and background information on the topic of customer centricity. This will help you to critically examine (and optimize!) customer centricity in your company.

Customer is king? Why does everything always revolve around the customer?

The term customer centricity is on everyone’s lips and often praised. The fact that the customer is king has been propagated for decades. We ourselves at tractionwise actually believe that the customer should not be placed on the throne, but rather treated like a partner at eye level. 

 

Nevertheless, the relevance of Customer Centricity does not seem to be at the top of the agenda everywhere.  Some even claim that only a fraction of companies give much thought to their own customers and their wishes and needs. At this point, I would like to revisit the self-image and external image of customers; we refer to this as the “empathy gap”

Empathy Gap
Empathy Gap

Fair enough: Just think of the service questions in the waiting loop at the telephone provider, which should direct the conversation to the right contact person – but already have problems understanding the voice. Or the miserable customer service during your last online return. One thing becomes clear: customer orientation does not work like that. And even in the B2B sector, companies that live and breathe customer centricity are more the exception than the rule.

The most important neglected management principle today is to be close to the customers. Meeting their needs and anticipating their wishes: That's what it's all about! For all too many companies, the customer has become an annoying troublemaker. His unpredictable behavior throws well-thought-out strategic plans into disarray, his actions upset the IT system, and on top of that, he stubbornly insists that purchased products must work!

Customer-centric action does not only apply to direct contact with the customer. Even the alignment of one’s own offering and the sharpening of one’s own service or product fall under the topic of customer centricity.

What is customer centricity anyway - and how does it help me as an entrepreneur?

If you act in a customer-centric way, you align your company comprehensively with the wishes and needs of your customers. However, this does not mean that you lose sight of your own economic interests. On the contrary: Customer Centricity aims to identify the needs of existing and new customers and to better align the organization to these needs. This is worth hard cash and will help your company establish unique selling propositions. This ultimately leads to (greater) economic success.

Why is this necessary? Because, on the one hand, customers are emancipating themselves from their traditional role. Through digitalization, today’s Internet user has the opportunity to compare prices globally, request services everywhere, and read reviews in social media and rating portals. At the same time, more and more companies are reaching the limits of their traditional business model. New solutions are needed – and those who do not reinvent the wheel here, but create added value and offer something that the customer really needs, win just as well.

In short: Customer centricity is an important success factor for your company. The factually “visible” organization as such loses importance due to the customer focus and the associated required readiness to adapt, even if many entrepreneurs do not like to hear this. But customer centricity is not achieved in a day, nor does it last forever – customer centricity is a permanent iterative process that is an integral part of the company. 

Why is this important? A prime example is often given by the company Kodak, which was too late in recognizing the widespread change in the needs of its customers with regard to digital photography and was ultimately completely wiped out of the market and went bankrupt. A similar situation applies to the cell phone manufacturer Nokia with the advent of smartphones. We like to talk about the so-called “Kodak moment”.

The buzzword jungle - usability, user experience and customer experience

More and more English “business words” are shaping our use of language in the corporate context. They often come from the startup world, which is sometimes viewed critically. If you look at startups from a medium-sized company perspective, doubts about the business model often arise. This is understandable, but not always justified. After all, startups in particular have few traditional resources at their disposal. This makes innovation and new ways of thinking absolutely necessary.

How do user experience and customer experience differ?

Usability

Usability refers to the user-friendliness of a product. If the user can use the product well and meaningfully in the intended context, usability is high. This is the basic prerequisite for a successful product.

User Experience (UX)

User experience, also abbreviated to UX, goes one stage further. For example, if an online store is stringently structured or the instructions for use of an electrical appliance are comprehensible and visually appealing, the user experience is positive.

Customer Experience (CX)

Customer experience refers to the experience your customers have with your company. Great customer experiences promise long-term success. After all, satisfied customers like to come back, and thrilled customers recommend you to others.

And this is where the circle closes: You can only create positive customer experiences if you align the activities in your company with the customer – and do not only carry them out for their own sake.

Your tools for more customer centricity

Customer Insights Suite Light dark version

First the customer, then the company

As mentioned, it is not only important that your company’s customer service is customer-centric. Customer issues are not just a matter for marketing, sales, distribution and customer care! Only if everyone in the company pulls together and customers experience that they come first at every touchpoint with your company will you achieve long-term success., This applies to every single employee working for your company, including all operational processes. 

Customer Centricity must have a high priority in the entire company and be lived by every employee on a daily basis. Only in this way will the concept be coherent, authentic and ultimately work. In large companies in particular, responsibilities are clearly defined. Structured processes and fixed schemes have great advantages in terms of efficiency – but there is often little room for individual customer concerns. These are not good outlooks for customer centricity.

There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.

Living customer centricity in your own company: 8 proven approaches we work with at tractionwise

Time and again, customers ask us which methods are most effective for establishing more customer centricity in their own company. First of all, you need to find out who your customers are and how you can help them with your product or service. Before you can act in a customer-centric way, you need to learn more about your customers. The following approaches have proven successful for this process:

1. lean startup: rapid product development and iterative process

Lean Startup is a method developed by Eric Ries in the startup context to implement projects quickly, streamlined and customer-centric. By launching a product that initially meets only minimal requirements, it is possible to draw valuable conclusions for the future.

  • Is the product accepted?
  • What is missing?
  • How can I improve the product?

For Lean Startup to work, constant measurement and evaluation is essential. However, if you stay focused, you can use this method to bring new products to market in a way that conserves resources. Important: Lean Management can always be used, even though you may now ask yourself: “Well, we’re not developing any new products”. It’s all about constant experimentation, learning and optimizing, and starting all over again.

2. customer empathy: get to know your customers better

Customer empathy is about getting to know your customers and their wishes and needs, as well as their concerns and fears. If you know what makes them tick, you can tailor your service to their needs. Whether you create a Buyer Persona or develop a Customer Empathy Map, it’s important that your insights are not just theory. They should by no means merely reflect your wishful thinking, but instead focus on “real” customers.

3. customer development: who are my customers and what do they need?

With this approach, too, the focus is on the customer and his or her needs. The goal of customer development is to sharpen your own customer profile. This is necessary if you have developed a solution, see its potential, but do not yet know exactly who will benefit most from it. The customer development process can be divided into four phases:

Customer Discovery: This is about understanding the problems, needs and challenges of your own customers. This works best if you take a step back and let potential prospects or customers have their say. For example, in interviews.

    1. Customer Discovery: This is about understanding the problems, needs and challenges of your own customers. This works best if you take a step back and let potential prospects or customers have their say. For example, in interviews.
    2. Customer Validation: In this phase it is already clear who belongs to the target group and how your solution can eliminate their problem. Now it’s time to prove that your solution can be sold as a tangible business idea.
    3. Customer Creation: Phase 3 focuses on building customer relationships. You find a strategy and define the market in which you operate with your business model.
    4. Company Building: Product and customers are defined. Now you need to build the company – your organization – around these two cornerstones. If a company already exists, you modify the structures.

Customer Development aims to develop products and services in dialog with the customer. This allows you to create customer-oriented structures right from the start.

In this article you can read everything on Customer Development, what it is and how it works.

product-centrict-customer-centric-ketchup-bottle-tractionwise
Product centricity vs. customer centricity

4 Buying Center: A differentiated view of the decision-making circle

The buying center is a powerful concept for selling your service. The buying center – also known as the decision-making unit (DMU) – is the term used to describe everyone involved in the process of buying your product.

In B2B business in particular, the decision-making unit consists of different people with different needs. When you approach them, you should know exactly whom you will convince with which argument. After all, the user of your product has different wishes and needs than the buyer of a company.

Read everything on the Buying Center, what it is and how it works in this article.

5. market segmentation: know submarkets on which you can operate optimally

In order to place a product or service, you should not only know the overall market, but also be familiar with the submarkets. This will enable you to identify differences between your customers. Based on this knowledge, you will be able to draw conclusions for marketing and sales. Here you can learn more about the Market Segmentation service, which includes the Customer Development module. 

6. value proposition design: developing your individual value proposition

The value proposition is your individual benefit, value and performance promise. In short, the value proposition tells prospects and customers why they should buy from you or use your services. The value proposition is the essence of your business idea and must therefore be formulated clearly and concisely. Your user promise is the core of your work and the guiding principle for all marketing and sales activities and is developed in the Value Proposition Design.

You want to hear more about Value Propositions, then read this article.

7. sales battlecard: unique selling points at a glance

Once you have developed a user promise, you can create sales battlecards. These are concise documents that summarize the following points at a glance:

    • Sales messages
    • Product information
    • tactical value propositions

 

To sum it up, Sales Battlecards help your sales team to emphasize your company’s unique selling propositions during the sales pitch. Regarding the competition, you can also enrich Sales Battlecards with competitors’ marketing strategies so that your sales team knows exactly which arguments will have even more impact with the customer.

Need more input? Then read our article on the development of the value proposition.

 

CRM Audit & Optimization: Where does my Customer Relationship Management stand?

Customer Relationship Management (CRM) is the systematic and strategic optimization of customer relationships throughout a company. This involves both the qualitative and quantitative processing of customer data. CRM software serves as an important control instrument, which of course must be continuously maintained.

The aim of CRM analysis & optimization is to create successful customer relationships, which ultimately results in higher customer loyalty. In a CRM audit, you focus on the existing customer relationship management in your company. Based on predefined criteria, you check whether or how the CRM can be optimized. This breaks through encrusted silo structures and aligns you intensively with customers and their journeys. 

Read everything about CRM Analysis & Optimization here.

Conclusion: Why customer orientation is becoming increasingly important

Customer orientation and customer centricity are becoming increasingly important. Companies that act for their own sake soon reach their limits. A good reason to rethink.

We would be happy to support you as a consultant and sparring partner in identifying customer needs and aligning the corporate strategy to more customer centricity in the long term. We work with you to develop a customized concept and a mix of methods that suits you and your company.

If you think we only advise, you are wrong. We are passionate optimizers & implementers and will go the extra mile, believe me.

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About Me

As a CRM expert and certified Scrum Product Owner, I experience the importance of customer-centric product and marketing development on a daily basis. 

In combination with agile optimization processes and a corporate culture open to experimentation, you will bring your growth fully on track.

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