Customer-centricity involves placing the customer at the centre of the business and building company practices and messaging around that entirely customer-focused centre. It calls for paving the way to customer satisfaction – not by isolated attempts to slash prices, renovating stores or putting price pressure on suppliers, but by tailoring products, staffing and the environment to ensure a valuable customer experience. Simply serving someone well is one thing; focusing company-wide efforts on their every specification is quite another.
Analysing every aspect of the customer journey in the way a company like Amazon does, from purchase history to website navigation and customer response to automated recommendations, is not cost-free. When Best Buy adopted a customer-centric focus, it experienced an increase in profit in the following fiscal quarter, but the initiative also became very expensive, which was not anticipated. Failing to rise to the occasion can also be costly, however: the temptation to approach a customer-centric strategy half-heartedly or to pay it lip service risks wasting business resources while failing to meet customer expectations.
What is being measured?
The explosion of online retailing has necessarily changed retail strategy, not least by contributing to an even more competitive environment. To some extent, customer-centric approaches have arisen as a solution to the frenzy as retailers build comprehensive pictures of customer preferences, past buying patterns and working predictions of their next purchase. An interesting by-product of this is the measurement of success by customer profitability instead of just in-store sales. We may well expect to see customer focus more generally reflected in key performance indicators.
For insight into their clients, small businesses will be relying on easily available tools such as Google Analytics or Facebook’s Audience Optimization. Larger businesses will usually pull information from IT, sales, marketing and customer services to define workable customer-experience metrics.
Apple, American Express, Cisco and Harrah’s Entertainment have shifted away from their traditional operating models and towards customer-centricity. Amazon founder Jeff Bezos points to customer service and user experience as the company’s core values, and Amazon’s success illustrates customer-centricity as a powerful business model for increasing profit. An Oracle report from 2013 stated that 97 per cent of companies believe that improving customer experience is critical to success, and improving their approach to customer-centricity was a top priority for 93 per cent of them.
Centricity and omni-channel
Ben Sillitoe of EssentialRetail.com believes that you cannot implement a proper omni-channel strategy without a real customer-centric focus. ‘Most of the current struggle to implement omni-channel initiatives,’ he explains, ‘…comes from retailers trying to preserve their current product- and channel-centric business models.’ As new retail paradigms are being driven by technology and the consumer, it is not easy to envision a way around the new status quo.
In the end, though, that may not be such a difficult reality to accept. Properly engaging with the customer engenders the kind of loyalty that’s very hard to shake up.
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