Consumers today are a tough bunch to keep loyal. Three-quarters make some change and about 40% switch brands, according to a McKinsey & Company study released in October. Older consumers often leave brands because of value and availability, while younger consumers consider value and purpose.
That’s what makes becoming a true customer-centric brand maybe more important today than ever. The question is how to become customer-centric, how do you measure your effectiveness and what overall does it mean to your brand to be customer-centric? “Customer centricity is ingrained in the culture, hence, a customer-centric culture,” said Annette Franz, CCXP, founder and CEO of CX Journey Inc. “It is a culture that is deliberately designed to be that way. It requires CEO commitment to do just that. It becomes a mindset shift, a behavior shift and a culture shift.”
What Is Customer Centricity?
According to Franz, customer-centricity is an approach to doing business in which the business do the following:
- Focus on creating a positive experience and delivering value for the customer by understanding the customers, their needs, pain points, problems to solve, and jobs to be done — and by understanding that, not all customers are created equal
- Understands that customers are the only reason they exist
Companies should not consider business discussions, decisions nor designs without bringing in the customers and their voice, asking them how it will impact them, how it will make them feel, what problems it will help them to solve and what value it will create and deliver for them, Franz added.
“My definition of customer-centricity is considering the customer at the center of everything a business does,” said Jeannie Walters, CCXP, CEO of Experience Investigators. “This may seem obvious, but most businesses are product-centric and/or brand-centric. Putting the customer at the center of decisions means understanding their needs, desires, expectations, and disappointments. To do this successfully, however, the organization needs to define what success looks like for both the customer and the organization.”
What Are Some Examples of Customer-Centricity?
Walters said she loves when she sees brands that consider the real needs of a customer, outside of their transactional purchase. For example, a local toy store provides gift wrapping and "elf" services so busy parents can leave Christmas gifts at the store until Christmas Eve. “It's meeting a real need — hiding the gifts until the time is right — and providing a service customers appreciate,” Walters said.
Franz said providing hard examples is challenging because being customer-centric is truly a way of doing business, a way of being. “It’s strategic,” Franz added. “It’s proactive. It’s co-creation. It’s long-term. It’s relationships. It’s omnichannel. It’s enterprise-wide; it’s not simply individual heroic efforts. And it’s a culture that is deliberately designed to be this way."
Customer-centricity flows through the veins of the organization and into everything every employee does, according to Franz, and not just if or when a customer is in front of her.
Related Article: Is Customer-Centricity Actual or Aspirational?
What Are Some Challenges of Being Customer-Centric?
Stephanie Thum, CCXP, founding principal at Practical CX, said look no further than the government’s effort to produce great CX in discovering the challenges to being customer-centric. “Every government agency has a delicate balance to strike between the regulatory realities of being a government organization and the needs and expectations of customers,” she said. "The two aren't always in sync.”
According to Franz, some other challenges to becoming customer-centric include:
- Not deliberately designing a customer-centric culture and making customer-centricity the foundation of the business
- Assuming that it’s tactical, that it’s what this department does or how a message is sent, without having it woven through the fabric of the business
- Assuming that it’s the same thing as being customer-focused. It is not, Franz said.
Developing products can take months or even years, Walters said, and if a product team is following a roadmap, it's hard to put on the brakes and say, "but now customers want THIS." “But that can happen if an organization is being truly customer-centric,” she added. “And if success isn't defined well, it's easy to feel like priorities shift a lot. That's why understanding what success looks like, and how to measure it, is so important.”
The Advantages of Being Customer-Centric
Customer-Centric Businesses Have Customers Who Feel Recognized: In a customer-centric organization, customers feel seen and recognized, and often get more personalized experiences they want to share, according to Walters. Warby Parker changed the eye care industry by focusing on customer and providing a better experience for them. Their customers told others, and it grew from there. “The same can be said about all the other experience-driven disrupters of the last two decades,” Walters added. “They centered the customer at the heart of their decision-making and created shareable experiences, instead of producing products first and looking for customers.”
When the business is customer-centric, customers feel it, Franz added. They know they matter; they know you listen; they see how you solve problems and deliver value. When you deliver value for customers, you also create value for the business. When this happens, you are on the road to building longer-term relationships with your customers, she said.
Customer-Centric Businesses Value Consistency: Customer-centric businesses also value consistency and delivering consistently. Customers know what to expect from these businesses because they have heard the brand promise and have experienced it. Consistency also builds trust, which is a solid foundation for any relationship, according to Franz.
Customer-Centric Businesses Value Innovation: Innovation is another benefit of customer-centric businesses, Franz said. This benefit bridges the business and the human sides of this story. Customers provide feedback. Businesses listen, co-create and innovate to solve customer problems.
Customer-Centric Businesses See Growth: When you innovate to solve for unfulfilled needs and other problems, you are bound to attract potential/future customers who didn’t even know they had these problems to solve — or for whom these problems appear at a later time, Franz said. New problems solved means new customers and that equals growth.
According to Franz, other benefits of becoming customer-centric include:
- Increased retention and CLV: Customers want to continue to do business with brands that listen to them, care about them, solve their problems, and create value for them
- Increased loyalty: Not only do customers stay, but they buy more, spend more, etc.; customer-centric organizations focus on journeys, not just on touch points, which means that they focus on relationships, not transactions.
- Increased referrals: All of that customer love leads to a supplemental marketing and sales force (your customers) that can’t wait to advocate for your brand.
- Reduced costs: When brands listen to customers and use that feedback to make improvements, they realize operational efficiencies through process improvements and more.
- Increased revenue: It’s easier to sell products when they solve problems for your customers, and they solve problems because you took the time to understand customers.
Related Article: 10 Essential Traits of Customer-Centric Brands
Employee Experience Ties Into Being Customer-Centric
Customer centricity isn’t just about customers. In order to have a customer-centric culture, you must put employees first, according to Franz. “But you won’t have customers if you don’t have employees to build, to sell and to service the things that customers buy," she said. "But employees reap the benefits. Customer-centricity provides a competitive advantage for the business, too, both from an employee and a customer perspective. Who wouldn’t want to work for, recommend, or buy from a company that cares about people?”
Can Customer-Centricity Be Measured?
At least one direct measurement exists for measuring customer-centricity: Customer Centricity Score (CCScore, or CCS). Is it a legitimate measure alongside the likes of Customer Effort Score (CES) and Net Promoter Score (NPS)?
CCS isn't the same as NPS or CES because it measures customer-centricity through the eyes of employees, according to Thum. NPS and CES measure perceptions through the eyes of customers. “I would also argue they seek to measure different things,” she said.
CX professionals should critically evaluate any measure they ascribe to or put in front of executives, Thum added. Look at how the measure was developed, by whom, and with what level of rigor.
“Does it measure what it is intended to measure? Who influenced the development of that measure? Is it the right measure for your business?” Thum encouraged CX professionals to ask. “If you see a claim that something is ‘scientifically developed,’ or ‘scientifically approved,’ take the time to understand what exactly that means. Look for peer-reviewed scholarly research that explains the development and validity of the scale. If you use it, do some due diligence first, and then use it with your eyes wide open.”
One basic advantage of the Customer Centricity Score is it is a way to measure progress over time with a consistent test and technique, according to Thum. You get a sense of how your employees are feeling about the work that is being done. There could be multiple stories to learn as you review that data. “At a minimum, CCS starts a dialogue and a thinking process around an organization's true success toward customer centricity,” she said. “It gives employees a voice in how the organization is doing toward its goals of .”
Best Metrics to Measure Customer Experience
CX professionals don’t have any magic metric at their fingertips, according to Walters. Measurements are not perfect, but they are helpful. “The best way to evaluate the customer experience is a combination of metrics,” she said. “CCScore focuses mostly on employee attitudes and behaviors. That's a great place to investigate. But I personally don't believe one metric is enough in any situation.”
Use a combination of factors, but define what customer centricity and CX success means at your organization, Walters added. "’Great customer experiences’ is not a defined outcome,” she said. “Define what it looks like, how you know if you're making progress, and what metrics will help you track that progress. The CCScore could definitely be a part of that measurement, but you can also use a combination of operational, behavioral and feedback data.”
For example, Walters said if customers are rating customer service interactions well in their feedback metrics, but they aren't renewing at the same rate as the past, then something is going on. “If employees report caring about customers at high numbers but customers report disappointment in a product,” Walters said, “then it's not accurate to say everything is focused on the customer. Metrics are really clues for leaders on where to look, examine and improve the journey for customers.”
MarketCulture Strategies developed a customer-obsessed culture assessment, the Market Responsiveness Index (MRI). “Through their work, they have proven that a customer-obsessed culture that engages employees to deliver better customer experiences drives profitability,” Franz said. “This is a measurement tool that I would recommend.”
Related Article: To Achieve True Customer-Centricity, You Need a Cross-Functional Dream Team
Happy Customers Are Drivers of Business Success
Happy customers provide not just higher lifetime values, but they refer other customers, Walters said. Those referred customers tend to spend more money, more quickly than other customers who weren't referred.
“To top it off, happier customers and happier employees go hand in hand,” Walters said. “By staying centered on the customer and their needs, employees feel more connected to the success of the organization. And nobody wants to work at a place with a bunch of complaining customers.”