Take a leap from product-centricity to customer-centricity before it's too late

The old product-centric business strategy has been very effective for organisations in the past, but sadly it has run its course.

It's the old paradigm.

While there are still plenty of product-centric companies (some of which are highly successful), businesses are increasingly pivoting and adopting more customer-centric approaches instead.

What are the major cracks in the product-centric approach?

• Commoditisation - Production is easy, and there is a rise in technology-enabled product development. Product lifecycle has reduced a lot, and that natural monopoly isn't there.
• More intelligent customers - Now, customers are better informed than ever. They make smart choices. They are more demanding and have more options to choose from. Moreover, they are not passive anymore.
• Retail saturation - Now, retail is not the only option. It's challenging to have a geographical monopoly.
• Globalisation and deregulations - You know how difficult it can get
• Customers are demanding - They want an end-to-end solution, not just a product
• Customer-level tracking - It's important to know about the behaviour of customers. To know who's buying what, when, why, and from where.

So, why is a customer-centric approach so effective in dealing with these cracks?

"Customer-centricity is a strategy that aligns a company's development and delivery of its products/services around the current and future needs of a selected of customers in order to maximise their long-term financial value to the firm."

It's an inbound approach, where...

Long-term > Short-term

Customer > Product

Loyalty > Sales

New product > New needs

Product-driven R&D > Customer-feedback driven strategy

Generally speaking, customer-centric businesses believe that their clients are the primary reason they exist, and they’re happy to go the extra mile to keep their customers happy.

Still not convinced? Let's look at some data :)

• Loyal customers are worth up to 10 times as much as their first purchase,
• It is 6-7 times more expensive to acquire a new customer than it is to keep a current one,
• 62% of global consumers have stopped doing business with a brand or organisation due to a poor customer service experience,
• When it comes to sales, the probability of selling to an existing happy customer is up to 14 times higher than the probability of selling to a new customer.

How to transform from product-centricity to customer-centricity?

Customer centricity requires a company to be willing to change its organisational design, performance metrics, and employee/distributor incentive structures to focus on this long-term run value creation and delivery process.

1) Make customer-Centricity your vision

• It should start with the vision and mission of your company
• The value system should be renewed
• Make it easy for employees to make it easy for customers
• Shift from a selling mindset to a value creation mindset
• Make your workflows lean and customer-centric

2) Data is the key

• Make it a priority to collect necessary customer data
• Really know about your customers
• That data should be accessible to most people dealing with customers directly.
• Use the 80-20 principle and focus on more valuable customers to your organisation.
• Anticipate future customers and their needs
• Train employees to know and utilise data in an effective manner
• Make better use of CRM and analytics software
• Create an innovative feedback mechanism

3) Digital Transformation to help customer-centricity

• Identify significant pain points of your customers and resolve them
• Utilise IT to improve CX and raise customer-facing performance
• Improve real-time customer support, especially over texts
• Train your employees about digital transformation
• Listen to customers, involve in active digital listening over social media
• Use shared data, processes, apps, and APIs to create capabilities quickly.

4) Operational structure needs to be transformed as well?

• Restructure your organisation to meet the needs of the customers
• Align your marketing, sales, and other teams to come under one umbrella and help customers in a sync
• Reward employees based on value creation and relationship building rather than sales
• Give priority to departments that are directly involved with customer relationship

5) Focus on collaboration and relationship between employees and customers

• Empower employees to provide exceptional customer experience
• Invest in software, tools, and systems to help improve your organisation
• Train employees in soft-skills
• Give people freedom and motivate them to help customers by going out of their way
• Democratise the availability of customer-data

15 of my favourite customer-centric companies in the world

1. Starbucks
2. Netflix
3. Coursera
4. Hubspot
5. Zappos
6. Slack
7. Amazon
8. Spotify
9. Ikea
10. Apple
11. Hilton hotels
12. FedEx
13. Airbnb
14. Salesforce
15. Lego

I would like to end this article with this legendary quote from Michael Leboeuf.

Call me if you find a better business strategy!

Bye :)