How is a customer centric organization different from one that is product focused
How To Move From A Product-Centric to A Customer-Centric Organisation - PART 1
Hello and welcome
My name is Bram, and in this video, we are going to discuss
how to move from a product-centric, to a customer-centric organisation
Since there is quite some ground to cover I cut this video into multiple parts.
Initially, we will dive into the following three aspects:
What is customer-centricity What is product-centricity AND
How do product-centric companies differ from customer-centric ones
We will also have a part where we only focus on the steps necessary to make that change
happen!
That video will be all about how you can make the shift to a customer-centric organisation
Back to part one
Back in the day, most multinational corporation and enterprise companies relied on product-centric
approaches and focused their efforts on developing new products by leveraging technology or specialized
skills.
These days, however, companies are increasingly seeing the value of adopting a customer-centric
approach and putting their customers at the heart of all they do.
So What Is Customer-Centricity?
In a nutshell, customer-centricity refers to the act of putting your customers at the
core of your business.
This means that your business objectives, goals, and mission should revolve around the
idea of creating a positive experience for your customer, and/or delivering value to
them.
Generally speaking, customer-centric businesses believe that their clients are the primary
reason that they exist, and they’re happy to go the extra mile to keep their customers
happy.
Some Examples of customer-centric companies include Amazon and Zappos.
There are plenty of strategies that customer-centric companies rely on, but all these strategies
fall into three broad categories: 1. Customer development
2.Customer retention 3. Customer acquisition
So let’s start with Customer development. Firstly, customer development is all about
making your existing clients more valuable.
Here, companies analyze their data and identify patterns to come up with cross-sell and up-sell
opportunities.
This helps them increase the Average Order Value (AOV) and Lifetime Value (LTV) of each
customer.
Note that customer-centric companies do not aggressively up-sell customers just to hit
their sales goals.
Instead, they make it a point to only up-sell customers when it makes sense, and when it
results in a win-win.
Number 2: Customer retention With customer retention, companies basically
engage and cultivate their customers so that these customers stick around for the long-run.
Again, this helps the company increase its customer LTV.
One major benefit of investing in customer retention is that it helps companies increase
productivity and save cost.
Acquiring a new customer can cost up to 5x more than retaining an existing customer,
and the success rate of selling to an existing customer is 60% to 70%, as compared to the
success rate of selling to a new customer, which is 5% to 20%.
Number three: Customer acquisition
Finally, customer-centric companies also take great pains to fine-tune their customer acquisition
strategies so that they acquire the right type of customers.
More specifically, these companies tend to focus on acquiring customers based on behaviours
instead of demographics.
For example, a customer-centric company might use a tracking code and their CRM system to
keep an eye on their leads’ behaviour and actions taken on their website, and reach
out to leads who have engaged in certain actions, say, viewed their Pricing page five times
in a single session, or downloaded three different lead magnets from their site.
Being customer-centric vs having good customer service
Some companies mistakenly equate being customer-centric with having good customer service, but in
truth, customer-centricity is so much more than that.
Think about it this way: truly customer-centric companies offer their customers a great experience
throughout their buying journey, and delight their customers at every touchpoint.
If you’re hard at work optimizing your support strategy, that’s great, but don’t just
stop there.
You should also try to improve your other interactions with your customers, and think
about how you can create a better overall experience for said customers.
Thank you very much for watching, and please share a like if you feel this video contributed to your learnings.
