A new year comes with a lot of refocused and streamlined efforts as business owners make new resolutions geared at making their enterprises better; more profitable and more efficient. It is useful to note, however, that customers should never be streamlined away, in fact, more businesses should strive to develop what is now called â€œCustomer Centricity.â€
According to the University of Pennsylvania, customer centricity is a strategy that aligns a companyâ€™s development and service delivery around the current and future needs of a select set of customers in order to maximize their long term financial value to the firm. It requires that the company is willing and able to change its organizational design, performance metrics and incentive structures to focus on long-term value creation for customers.
This is a shift from the product-centric approach where firms focus on performance superiority or operational excellence to maximize shareholder value. While this approach may still work in certain contexts, there are very salient reasons why every forward thinking firm should go customer-centric, at least to a degree.
First off, products moves faster through their life cycle today than ever before â€“ this is a direct result of technology. The end result is that products stay relevant for a very short period of time, meaning the monopoly of being able to produce something that no one else can is quickly wearing away. It now pays to focus on the customer, understanding their unique contexts and being the first to come up with tailored solutions.
Furthermore, todayâ€™s customers are smarter, and, well, why wouldnâ€™t they be when the bulk of them use smartphones and other smart devices? Customers may have been passive in the past, taking whatever is thrown at them but today, they are aware of options, whether or not the options are readily available. Social media gives each customer a voice and they usually do not hesitate to make it heard when the occasion demands for such.
Also, distribution technology brings almost everything everywhere in a matter of days. This means that customers are not only aware of options, but they can also readily access these options. Globalization can, therefore, be a plus or a threat depending on what side of the customer-centricity divide your business lies.
What the smartest companies today have done is to fully leverage data driven business models to understand consumer behavior. These companies embrace customer intimacy and are able to draw enormous insights from just interacting with their customers at a deeper level, these insights can be synthesized into end products or tweaks to existing services and place them way ahead of the competition.
As the world gets smarter, smart businesses understand what really brings rewards: creating enormous value for the end customer.