Business 101: The Benefits of Customer Centricity
Many business owners like to stress how important their customers are. They talk a lot about customer happiness and claim that their mission is to make people’s lives better.
Having that in mind, let’s recall all the times we, customers, have spent in queues. How many times we were struggling to have a problem solved. Or just how many times products we bought didn’t meet our expectations.
If so many companies are into customer satisfaction, why so many customers are enraged continuously by their customer service?
Let me tell you why.
Because for most companies, the most important metrics are sales related. While speaking about customer happiness, they all measure conversion rate, ROI, revenue growth rate or customer profitability score.
As it turns out, not many companies treat customer-centricity seriously. I get it, customer satisfaction cannot be easily measured (unless you use live chat) and it doesn’t translate into revenue directly. The problem is, customer satisfaction is much more important than most people understand.
In this post, I’d like to show you the importance of customer-centricity and how your business can benefit from it.
Sales centricity: the bad and the ugly
Sales centric organizations is just another naming for product-centric organizations. They are focused on two objectives: meeting sales numbers and increasing market share.
Of course, there’s nothing bad in it, but too often companies focus on the sales process, without giving a second thought about how customers feel about their service. Very often, they want to achieve better results, no matter if the customer feels dissatisfied or cheated on.
The greatest (or the worst, depending on how you will look at it) example of such behavior is Comcast’s story of Ryan Block who tried to cancel their service. Comcast’s representative has clearly had the permission to do whatever it takes to keep the customer, he insisted so hard on Ryan staying with Comcast as if his life was dependent on it.
Of course, it’s an extreme example of sales centricity, but at the same time, it shows how discouraging it can be for customers to buy from a sales centric companies. In the end, it turns out that it’s a culture of short-term product sales, but at the expense of long-term customer loyalty.
The importance of customer satisfaction
To understand why customer centricity brings us so many benefits, we need to understand why customer satisfaction is so important for business in the first place:
- 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,
- 3 out of 5 Americans (59%) would try a new brand or company for a better service experience.
Need more arguments?
- 62% of global consumers have stopped doing business with a brand or organization 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.
In other words, although the sales-centric culture seems to be more effective, it’s the customer-centric approach that’s more profitable in the long-term. That’s because customer centricity is about delivering high-quality products, but it is also about creating real relationships with customers before and after the sale in order to drive repeat business, loyalty and profits.
Put the customers at the core of your business
Customer centricity is not an initiative that can be limited to customer service. It has to be integrated into every channel and into every area of the business. So, here are a couple of challenges you will face when shifting to customer centricity.
First of all, it will be difficult to change the overall company culture. The major problem you will face is to change your staff’s mentality, they will have to stop thinking with numbers and start to think about exceptional customer experience. It’s also about backing it up with policies, processes and systems to make it real for staff inside the organization and customers outside the business.
Another problem is that many companies don’t use big data to analyze who their customers are and what they need. Implementation of such process can be a difficult at first, but as soon as you start to use and analyze it, you will be able to draw the right conclusions.
It might turn out that your strategy was wrong, that your marketing efforts weren’t adapted to your audience or that your ideal customer profile was incorrect.
Sounds horrible, but in fact, it’s great information for you, because it’s an opportunity to develop your product, sales and marketing strategy in order to succeed. It could be an opportunity to see your company through your customer’s eyes and change it for the better.
Last but not least - if you change your company culture so every member of your staff knows that it’s all about customer’s experience, there is still one thing you have to do. You have to empower your customer service team so they can solve your customer's’ problems.
Love your customers
Customer centricity is an approach to doing business that focuses on providing a positive customer experience in order to drive profit and gain competitive advantage.
Leslie Cottenje, Hello Customer
The above quote from Leslie Cottenje summs up te benefits of customer-centricity. It points out that focusing on customers gives you the advantage over your competition and that eventually allows you to drive more sales.
Customer-centricity helps you to build trust and loyalty of your customers, but also a solid reputation. It increases the probability of positive word of mouth, but at the same time reduces all friction between customers and your employees.
Remember that one of the greatest customer service problems is insufficient knowledge, resources or power to solve customer problems in one go. It will be your job to make sure your customer support knows what’s going on in your organization, that they are well trained and they are empowered to make their own decisions.
All these problems can make you think that maybe it’s more profitable and less time-consuming to stick with the sales-centric business model, but believe me - it’s not.
As long as your customers have the power to choose your competitor’s product or service, you don’t want to put yourself to a risk of losing them.
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