Customer centricity: How to Create a Customer Centric Business
Customer centricity can mean the difference between success and failure in business. Here’s how to make the shift.
How much do you know about your customer?
Do you know their age, location, needs and wants? The types of products and services they are most – and least – likely to buy?
If you answered ‘yes’, then it’s likely that your business values customer experience; if you answered ‘no’, it may be time to delve into the topic of customer centricity.
What is customer centricity?
Being customer centric means putting your customer first and at the heart of everything you do as a business. It’s about truly understanding your customer, so you can anticipate their wants, needs and communication preferences.
“Being customer centric means knowing the most valuable customer for your business, and configuring your business to serve them well,” says retail and digital expert Terrence Teh, strategy director at Pitcher Partners, a Melbourne-based firm that works with retailers to improve customer centricity.
“Being customer centric means knowing the most valuable customer for your business.”
Over the past decade – as technology has offered increasingly in-depth insights into shoppers and their buying habits – many brands have moved from product-centric to customer-centric models.
In other words, instead of creating a product or service and then selling it to as many customers as possible, more and more brands are increasingly putting their customer first, and creating or selling products or services that are specifically suited to them.
Why does customer centricity matter?
Customer centricity is good for business. A 2015 Bain & Company study found that customers that excel at customer experience grow at 4 to 8 per cent above the market.
How to measure customer centricity
There is no single, standard way to measure customer centricity. What works for one business won’t necessarily be right for another. After all, every business is different, just like every customer. For example, speed of service might be important to a florist, but it isn’t as important for a wedding-dress business.
However, there are a range of ways to measure customer satisfaction and evaluate customer centricity.
Net Promoter Score
This is a widely used market research metric that surveys customers on the likelihood that they would recommend your business, product or service to a friend.
First developed in 2003 by global management consultancy Bain and Company, a Net Promoter Score measures the loyalty of customers to a company. It is determined using a single question survey and reported with a number from -100 to +100. A higher score is desirable.
Best for: internal measurement of customer loyalty; determining whether customer loyalty is improving or worsening.
For more information or to get NPS-certified, visit Net Promoter Score.
Customer Lifetime Value
Measuring Customer Lifetime Value (CLV) is one another way to judge customer satisfaction and loyalty.
CLV is the total worth to a business of a customer over the period of their relationship. It costs a lot less to keep existing customers than it does to obtain new ones, so increasing the value of your existing customers is a cheaper way to drive growth in your business. The higher your CLV, the more likely that your customers are returning to shop.
Trustpilot
Founded in 2007, Trustpilot is a digital platform that hosts reviews from customers that have shopped with you.
Trustpilot allows customers to score businesses from one to five and leave feedback about their experience. The resulting reviews can be an excellent insight into customer satisfaction and centricity.
Best for: producing social proof and displaying positive reviews to customers; offering insights and identifying specific issues that require attention.
For more information, visit Trustpilot.
Customer-loyalty programme data
One way to measure customer satisfaction and centricity is to monitor the proportion of customers in your ‘most loyal’ top tier. These customers might shop with you, say, four or more times per year. Divide this by the total number of customers in a year to determine and monitor your customer loyalty rate.
How to become a more customer-centric business
Map your customer journey
To become a more customer-centric start by mapping out the customer journey to understand what it’s like to do business with you from the customer’s side of the fence.
Take the time to understand what it’s like to purchase from you as a customer, both online and in-store, and how the customer seeks advice and information about your products and services.
When mapping your customer journey, consider mapping one complete consumer lifecycle – from initial brand awareness to loyal customer – as well as processes such as a first-time customer journey, a repeat purchase, email subscription or loyalty programme sign-up.
Surprise and delight
To improve customer centricity in your business it's important to question whether you doing anything to surprise and delight your customers? It’s worth considering as it’s often the little things that count.
Leading Australian cosmetics retailer Adore Beauty includes a Tim Tam in each and every order, which customers have grown to love as an element of the shopping experience.
In the US, the Starbucks mobile ordering app and personalised rewards program makes it easy for customers to order what they want and pick it up without having to wait. This app has earned the company a fiercely loyal customer base.
Do the basics well
Consumer expectations have gone back to basics since the pandemic, with product range, availability, and cheerful staff proving to be paramount, according to research by KPMG.
For example, IKEA won praises from customers for its easy-to-navigate website as digital shopping became the norm during the pandemic.
Survey respondents also noted that Afterpay enabled the transition to e-commerce as seamlessly as possible.
Communicate clearly
There’s a lot to be said for simple language that targets your customer segment. “Focus on identifying and knowing who you want to serve, and where the effort should be spent in creating the desired customer experience for them,” Teh says.
Check your language
The language you use to communicate with consumers needs to be consistent. Businesses that market themselves as exclusive and personable need to ensure all channel touch points reflect that by providing exclusive offers, early access and previews to products before the rest of the market, Teh notes.
The aim of customer centricity should be to provide simplicity for consumers. Processes in place for ordering, receiving and returning products should reflect that. It’s about making sure you’re true to your word.
Be available to your customers
Being customer centric is now more important than ever and using digital channels to engage with your customers is crucial. Offer at least three communication points for customers, such as a chatbot on your website, an email address, and active social media contact points, suggests Teh.
Survey your customers
Ask your customers why they buy from you, and what makes them choose you over your competitors? Ask them if you were to make improvements to make your business better, what they would be, Teh says.
Sure, it’s bold to ask these questions to customers, but the answers will help you implement more customer-centric systems and processes, he says.
Be seen
A strong online presence on social media and other digital platforms is also critical for maintaining your business image and brand throughout the pandemic – so it’s not a case of out of sight, out of mind. Make sure you’re responding to customer questions promptly: if a customer wants to buy from you, answer their queries as soon as you can, so they don’t decide to purchase elsewhere. After all, your input could be what secures the sale.
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As a retailer that has integrated with Clearpay, you will need to make sure that all your marketing is in line with the rules on financial promotions and Advertising Standards Agency Guidance on Advertising BNPL (“ASA Guidance”).
To help you get comfortable with how to talk about Clearpay, we’ve put together a Merchant Guide to Financial Promotions and ASA Guidance for all retailers on what you need to do with your messaging to customers.
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