Vimal Kumar Rai
Managing Partner and Co-Author
AJ Boelens
Managing Partner and Co-Author
The Art of Being Customer-Centric through the Science of Delivering Customer Value
Customer centricity, which places the customer at the heart of every business decision and process, goes beyond providing good service. It’s about consistently delivering exceptional value. But what exactly does customer value entail, and how can businesses effectively deliver it?
In the dynamic and ever-evolving world of business, the concept of customer centricity has emerged as a cornerstone for companies aiming to achieve sustainable growth and long-term success. This approach, which places the customer at the heart of every business decision and process, goes beyond providing good service. It’s about consistently delivering exceptional value. But what exactly does customer value entail, and how can businesses effectively deliver it?
Understanding Customer Centricity
Customer centricity is a strategy that focuses on creating a positive experience for the customer before and after the sale, with the goal of driving repeat business, enhancing customer loyalty, and improving overall business growth. This approach has evolved significantly over time, adapting to the changing behaviors of consumers and the dynamics of the market.
Consider Amazon and Zappos, two companies that have set the benchmark for customer-centric practices. Amazon has revolutionized the retail experience with its personalized recommendations, extensive customer reviews, and a relentless focus on convenience. Zappos, on the other hand, is celebrated for its exceptional customer service and a company culture deeply rooted in customer happiness.
Defining Customer Value
Customer value is best defined as how much a product or service is worth to a customer. It’s a measure of all the costs and benefits associated with a product or service. Examples include price, quality, and what the product or service can do for that particular person. There are also monetary, time, energy, and emotional costs that consumers consider when evaluating the value of a purchase.
At the core of customer centricity lies the concept of customer value – the customer’s perception of what a product or service is worth compared with its alternatives. This value can be categorized into four types: Functional, Emotional, Life-Changing, and Social Impact.
The Elements of Value Pyramid, Bain & Company
Functional value pertains to the practicality and utility of a product.
IKEA, for example, provides functional, affordable, and stylish furniture, meeting the practical needs of its customers.
Emotional value, meanwhile, is connected to the feelings a product or service evokes.
Apple’s products, known for their sleek design and innovative features, create an emotional bond with users, making technology not just useful but also aspirational.
Life-Changing value is about products or services that significantly transform the customer’s life.
Tesla’s electric cars, which promise a sustainable and technologically advanced lifestyle, exemplify this.
Social Impact value is seen in companies like TOMS Shoes, whose ‘One for One’ campaign resonates with customers’ desires to contribute to societal causes, offering a sense of participation in larger social good with every purchase.
Recognizing and Delivering What Customers Value
Customer value isn’t only about money. It’s typically created through the solution that a product or service provides, not only to the buyer but to their organization as well. Keep in mind that customer value is subjective. Price is universal—it will cost every customer the same amount to purchase your product or service. But the value will be different for every buyer because it involves so many variables, including customer experience.
To deliver value effectively, businesses must first understand what their customers value. This understanding can be gleaned through various methods such as customer surveys, feedback, market research, and increasingly, through sophisticated data analytics that track and analyze customer behavior.
Once a business has a clear understanding of its customers’ values, the next step is to design products or services based on these insights. This process requires innovation, creativity, and a willingness to adapt to customer needs. For instance, Netflix‘s success can be attributed to its ability to use customer data to not only recommend content but also to create content that viewers want to see.
Delivering value then involves strategies focusing on quality assurance, exceptional customer service, and an engaging user experience. Employees play a crucial role in this delivery, acting as the bridge between the company and its customers.
The link between customer centricity and customer value is underscored by numerous studies and statistics. Businesses that focus on customer centricity directly influence the perception of customer value. For example, a study by Deloitte found that customer-centric companies were 60% more profitable compared to companies not focused on the customer.
9 Tips for Increasing Customer Value
Acting on feedback is just as important as getting it. Taking customer feedback seriously shows buyers that you care about them and are committed to providing a good experience, which can help increase satisfaction. So, use feedback to identify areas of improvement and formulate a plan for delivering more value. You may find that you need to:
- Personalize your support interactions
- Provide multichannel support options
- Create a robust onboarding program
- Prioritize customer success
- Address patterns in support issues
- Make sure customers know you’ve heard them
- Find opportunities to surprise and delight
- Acknowledge and reward customer loyalty
- Give your customers a sense of community
Enhancing customer value involves a multifaceted approach that goes beyond merely collecting feedback; it necessitates proactive strategies for continuous improvement.
One key tactic is to tailor support interactions by discarding generic scripts and embracing personalized communication to cater to each customer’s unique needs.
Utilizing Customer Relationship Management (CRM) software is essential for quick access to customer data, facilitating a personalized service that fosters brand loyalty. Offering multichannel support across various platforms, including email, phone, live chat, and messaging, ensures that customers receive assistance through their preferred channels, while implementing omnichannel support creates a seamless experience across these channels.
Establishing a robust onboarding program involves developing comprehensive guides and assigning support agents for personalized assistance, with ongoing support needs addressed by customer success associates possessing specialized product knowledge.
Prioritizing customer success entails anticipating their needs through dedicated teams, leveraging customer data analytics, knowledge bases, and CRMs for informed strategic decisions.
Addressing support patterns proactively involves sharing recurring issues with support teams, collecting regular feedback, and offering self-service options like chatbots.
Ensuring acknowledgment of customer feedback is crucial; following up with customers and informing them of positive changes demonstrates a commitment to improvement.
Surprise and delight strategies include exceeding customer expectations, providing quick resolutions, self-service support, and personalized experiences to enhance retention.
Acknowledging and rewarding customer loyalty through discounts, promotions, or loyalty rewards programs tailored to audience preferences fosters deeper ties to the brand. Lastly, cultivating a customer community through forums encourages knowledge sharing, fostering a sense of community and increasing perceived brand support.
Challenges in Implementing Customer Centricity
Despite its apparent benefits, implementing a customer-centric strategy is not without challenges. One of the primary challenges is balancing customer needs with business goals. Companies often struggle to align their operational and financial objectives with customer-centric initiatives. Additionally, managing customer expectations in an era where expectations are continually evolving can be daunting.
However, these challenges can be overcome through strategies such as continuous feedback loops, employee training focused on customer empathy, and a commitment to innovation that keeps pace with customer expectations.
The Future of Customer Centricity
Looking ahead, the future of customer centricity is poised to be shaped by several key trends. The rise of artificial intelligence and machine learning offers unprecedented opportunities for personalization, allowing businesses to tailor their offerings to individual customer preferences and needs. Moreover, there is an increasing focus on customer experience as a differentiator in a crowded market.
In conclusion, the art of being customer-centric lies in the science of delivering customer value. It’s about understanding what your customers value and then designing and delivering products or services that meet or exceed these expectations. This approach not only leads to satisfied customers but also drives business growth and sustainability. As we move forward, the businesses that will thrive are those that continue to place the customer at the heart of everything they do, constantly adapting and innovating to meet their evolving needs.
In a world where customers have more choices than ever, being customer-centric is no longer optional; it’s essential. Businesses that recognize this and act accordingly will not only survive but thrive in the competitive landscape of tomorrow. The journey towards customer centricity is continuous and ever-evolving, but those who embark on it with a genuine commitment to delivering value will find it a rewarding path to both business success and customer satisfaction.
Case Studies
Success Stories in Employing Customer Centricity
As usual, we at Commercial Excellence Partners like to share real-life case studies to exemplify the difference that a customer-centric strategy makes to business’ bottom lines.
The Other Side of the Coin: Companies That Missed the Mark
Despite the evident benefits of customer-centricity, some companies have failed to adapt.
Sources:
Anderson, J. C., & Narus, J. A. (2023, June 21). Business Marketing: Understand What Customers Value. Harvard Business Review. https://hbr.org/1998/11/business-marketing-understand-what-customers-value
Customer Value – Definition, Importance, Types, Parameters & Example. MBA Skool. (n.d.). https://www.mbaskool.com/business-concepts/marketing-and-strategy-terms/1816-customer-value.html
Fontanella, C. (2022, June 24). What Is Customer Value? (& How Your Business Can Generate It). Hubspot. https://blog.hubspot.com/service/customer-value
Mahajan, G. (2020, May 29). What Is Customer Value and How Can You Create It?. Sage Journals. https://journals.sagepub.com/doi/10.1177/2394964320903557
Maza, C. (2023, May 23). What is customer value? Definition, formula & importance. Zendesk. https://www.zendesk.com/sg/blog/customer-value/#georedirect
Ranjhaa, S. A. (n.d.). What is Customer Value & Why is it Important?. Marketing Tutor. https://www.marketingtutor.net/customer-value/