The Customer-Centric Model: Your Definitive Guide for 2020

Your customers are everything.

That’s not a figurative statement, either. Without customers, your company wouldn’t have the revenue that keeps you afloat. That’s why you rely on your current customers and always try to bring in new ones, increasing conversions along the way.

How focused are you on your customers versus other parts of your business? If you give your customers as much attention as every other aspect of your operations, then you’re in good shape. For those who have gotten a little lax in their customer approach, this article is for you especially.

More and more businesses are honing in on a customer-centric approach. There even exists a model for defining and planning a company’s customer-centricity. If you’re not sure what any of this means, you’re definitely going to want to keep reading.

In this article, we’ll define customer-centric, discuss why it’s so important, and even give you some great pointers for creating your own customer-centric strategy.

What Does It Mean to Be Customer-Centric?

First, let’s start with a customer-centric definition.

To make something centric is to put it at the center or forefront. Thus, when your business begins implementing customer-centric marketing or customer-centric selling, you’re focusing especially on the customer experience.

In other words, you’re looking at everything your company does from the viewpoint of the customer. What do they like? How do they prefer things? What do they need? In answering those questions, you can tailor your sales and marketing approaches so they’re more personalized and your staff is attentive to the needs and interests of your customers.

Do your customers relate to your brand? If so, how? What does the buyer journey entail from beginning to end? How helpful is your company as the customer progresses through that journey, and are you consistently involved? Do customers continue to do business with you happily or do you have a bunch of one-time customers?

As you begin to answer those questions, and honestly at that, you can gauge whether you’re truly a customer-centric organization. If you’re not yet, that’s okay, as you can change that by the end of this article.

The Customer-Centric Model

As we talked about in the intro, many businesses follow a customer-centric model. Here’s what that model looks like.

Image courtesy of Relay42

As the illustration shows, a client-centric approach is a five-pronged one. Think of the model as a building. Your company leadership is the foundation of that building. It holds up your company’s use of platforms, your processes, and the key people involved with your organization.

Leadership is where a customer-centric approach should really begin, and thus it’s the first area of your business dealings that you’ll want to evaluate. Without strong leaders, it’s hard to brand your company and position yourself as a business your consumers can rely on for consistently high-quality products or services.

Once you feel more confident in your company’s leadership, you can work on defining what your strategy will be, which processes and platforms it will entail, and which members of your company will be the ones to drive it.

To make it clearer how you should guide your company moving forward, here is a deeper, more thorough explanation of each part of the customer-centric model.

Leadership

In striving to become more consumer-centric, most of the leadership within your company will likely come from your senior management. To ensure the most integral cog in the machine is moving properly, your company staff might elect to create a leadership team to oversee the customer-centric approach going forward.

The leadership team’s responsibility is to brainstorm tasks and projects that revolve around your customers. Also, your entire company should begin working to address customer concerns and solve their issues in a timely manner.

Strategy

The work done on the leadership level is what begins to form your client-centric strategy. More than likely, the current business strategy your company is relying on could use some retooling so it meets more customer demands. Here are some components that a workable customer-centric strategy should have:

  • Long-term evaluations of success: Short-term successes are not necessarily enough to determine how well your company is serving its customers. These successes should also become longer-term if you want to retain your customers and build their loyalty. Additionally, you need to define what your successes are to your company, how you track results, and whether what’s viewed as a success among your staff is perceived the same way by your customers.
  • Interdepartmental customer satisfaction KPIs: If you’re all working towards the same goal, which is serving your customers to the best of your ability, then your company must operate as one. That means that among all the departments, you should use the same key performance indicators or KPIs to gauge what customer satisfaction looks like. The KPIs you might focus on include:
    • Net promoter score
    • Customer lifetime duration
    • Customer lifetime value
    • Average journey completion time
    • Customer effort score
    • Task completion rate
    • Escalation rate
    • Customer churn rate
    • Average resolution time
    • Daily complaint numbers
  • Your goals are driven towards the customer: As we talked about in the intro, ROI is important in keeping your company going, but you’d be without revenue if not for your customers. Thus, you have to ensure that all company goals moving forward to keep that in mind.

Processes

At this point, you can move onto the next part of the customer-centric model, processes. In creating a company uniformity that’s focused on the customer, you’ll begin to define the processes necessary to get there. These processes will show you the direction to aim your sales and marketing campaigns.

Since a company’s process is so uniquely their own, this stage of the model does differ from one business to another. You can ask yourself some questions along the way although that will tell you whether you’re on the right track.

For instance, are you using the customer insights you’ve gathered in your new approach to influence your product and project roadmaps? If the answer is yes, then your processes suit your new approach. If you said no, then you still have more work to do.

Do you currently deal with any obstacles that might prevent transmitting these insights across one department to another? Once again, this is something that you must address sooner than later, as these obstacles are holding you back from the customer-centricity you so want to achieve.

People

Besides the leadership team and your senior management, you can introduce other key members of your company into the fold as you work to be more consumer-centric. No matter the level of these new team members, it’s important that everyone is trained on what the new expectations are and how your company will go about getting there.

Do keep in mind when creating the training materials, that based on a team member’s expertise, their experience will differ somewhat. Take a marketer versus an IT professional, for example. They have different skills, so you probably wouldn’t ask for exactly the same things out of both of them.

You should also have resources that your customer-centric team can easily and reliably use when they need guidance or more information on any part of the customer journey/campaign. From customer interviews to insights, feedback, buyer personas, and customer profiles, without this information, it’s hard to make your business approach all about the customer.

Platforms

The last part of your customer-centric journey through modeling is the platforms of choice. Your company of course has an array of tools, apps, and software you use every day. Depending on the platform in question, it may be utilized by only some of your staff or everyone across the whole company.

To determine whether you want to keep using certain platforms moving forward, ask yourself a few important questions. First, does the platform allow you to connect customer interactions and information to each customer profile? Can you use the platform for traditional and digital channels alike? Does the platform allow you to keep customer insights along their journey? If yes, then it’s suitable.

Why Is Customer-Centricity Important?

You have a much clearer picture of the customer-centric model now. You’ve realized that overhauling your processes so they appeal more to your customers will take a lot of time, effort, and hard work.

Having a customer-centric culture within your business is critical, so it’s best not to cut corners. Here are some reasons that will convince you to put in the time in reworking your company processes.

Increased Customer Loyalty and Potentially New Customers

According to Temkin Group’s The Ultimate CX Infographic for 2018, when your customers are happy with their purchase or experience with you, they have a 3.5 times higher chance of buying from you a second time.

These customers are also going to tell their friends and family about their experience five times more often compared to having bad experiences. This could cause new leads to trickle into your funnel.

Higher Chances of Sales

When you’re happy with a company’s services and you feel you can trust them, are you more willing to buy from them? Of course. The same logic applies to your customers. According to statistics from LiveChat, your sales team has a much higher chance of selling to a customer who’s already happy with you, 14 times higher, than one who isn’t.

Unhappy Customers Rarely Talk about Their Dissatisfaction

If you look at the reviews page for any product or service, you’re bound to see some negative feedback sooner or later. This can give you the expectation that when a customer has a bad experience with a company, they’ll be sure to say something.

Sure, some do, but it’s likely far fewer than you would have thought. According to a 2017 Huffington Post article, out of 26 unhappy customers, only one will talk about their experience. The other 25? They bail on your business.

Image courtesy of SuperOffice

When you stop to think about this, it makes sense. Whether a customer complains through an email, live chat, by phone, or on social media, they’re still taking time out of their day to do it. You have to expect that most of your customers are busy people. Thus, though they may want to complain, they don’t get around to it. It’s easier and faster to just abandon your company and never look back.

It Costs More Money to Chase Leads

Any company wants to spend smartly, as a penny saved is a penny earned. If you’re of the mindset that when you lose a customer, you can just convert a lead instead, that’s a thought process you’ll want to shift out of immediately.

The HuffPost link from before also mentions that it costs a company six to seven times more money to convert a lead than it does to keep a preexisting customer. You have to pull all the stops when courting a lead, such as research into segmenting, personalized emails, follow-ups, and other tailored campaign elements. This doesn’t come cheap.

We’re not suggesting you abandon your influx of leads to keep your current customers onboard, just that you don’t disregard any customers because you have plenty of leads. Your customers have already converted, meaning they’re interested in your products/services and are more willing to buy.

You don’t have that same luxury with your leads. You could get 1,000 leads in a day, but if only 50 of them are interested in your company’s products and services, then the other 950 ultimately don’t further your business. That makes them far less valuable than your customers.

You Could Earn More Profits

In a guide from consultants Brain & Company, it was found that boosting your customer retention rates by five percent is enough to drive profits way up, between 25 and 95 percent. By taking a more customer-centric approach, we’re confident you could increase customer retention way past that five-percent mark, thus seeing profits that increase as your number of loyal customers do as well.

Is Your Business Customer-Centric? How to Build Customer Centricity

Those numbers really resonated with you. You’ve realized that you’re missing out on pleased customers and more revenue by not following a client-centric approach. You’re ready to begin prioritizing building customer centricity among your own company, but you’re not sure where to start.

Here are some strategies your company can follow today to become more customer-centric.

Focus on Customer Marketing

Customer marketing is not your average type of marketing. Favored by the likes of Apple and Amazon, customer marketing is about promoting products and services that your customers deem valuable rather than the ones you think will be valuable to them.

From the moment your customer buys something from you–which is called the post-purchase process–to the end of the journey, you should use customer marketing. The pillars of this marketing approach are advocacy, expansion, retention, and adoption.

Image courtesy of SuperOffice

  • Adoption: The adoption stage begins your post-purchase process. Adoption here refers to a customer becoming adopted to a service or product. You want this product or service to become a part of their everyday lives, and you can use in-app messaging and automated onboarding among your team to make it happen.
  • Retention: This next stage is about preventing churn, which is what happens when weary customers decide to stop using your products and services. This can cost the average company upwards of $1.6 trillion, so churn is certainly something you want to avoid.
  • Expansion: The third stage of the post-purchase process is expansion. This is about taking the customer you have now and expanding their customer journey so you can expect their repeated business for the next year, two, even three or more. By showing the customer some services or products that complement their purchase or suggesting that they upgrade products, you can expand their loyalty.
  • Advocacy: Advocacy is about the means your company uses to convert leads so you have new customers beginning their journey.

Start a Compensation Program

Another option you have for building a consumer-centric approach within your own company is to utilize a compensation program. This program connects employees to customers so every member of your staff has to make an effort.

Your compensation program should give employees financial bonuses for how adeptly they handle customers or for the number of customers retained. You can use other KPIs to determine success and reward staff based on whose metrics were highest.

Few things incentivize people more than money. Now all members of your company will feel motivated to focus on customer satisfaction, as they’ll earn something out of the experience as well.

Begin Opening up Interaction Options with Customers

To give everyone a fair shot at success within the parameters of the compensation program, that means all members of your staff should have access to your customers. This isn’t to bombard the customer with a dozen marketers and salespeople at once, but rather, it opens up interaction opportunities so more staff members can get to know a customer, their likes, interests, needs, and dislikes.

Start Hiring More Customer-Centric Employees

To streamline your customer-centric approach, you can also hire team members that already have a special focus on customers. Whether your new hires were once customer service representatives or involved in human resources, they have the necessary skill set your company is looking for as you begin to focus more on your customers and their satisfaction.

Tap into Customer Empathy

To feel empathy for another person is not the same thing as sympathy. When you’re sympathetic, you feel bad for a person and that’s it. To be empathetic transcends feeling bad and allows you to connect with that other person through shared experiences.

When you express empathy towards your customer, it means you understand where they’re coming from and what they need in that specific situation. You also know why they need what they do because you can relate to them.

Having empathy puts you in the customer’s shoes, so to speak, so you can quickly and efficiently come up with a solution that suits their problem. If your team members don’t practice empathy yet, company wide training can change that.

Not only is empathy a great skill to use with your customers, but it’s very valuable in building and maintaining relationships with your friends, family, and colleagues as well.

Customer-Centric vs. Product-Centric: Understanding the Differences

Your company has begun working on its client-centric approach, yet you still feel like there are some kinks you have to work out. How can you ensure you’re being more customer-centric than product-centric? Here are some ways to tell the differences between the two.

Your Approach Is Flexible

When you have a more product-centric approach, it’s typically one with less flexibility. You want to sell, and you have X amount of ways you go about doing that. Compare that to an approach that’s more about your customers.

You understand that throughout the customer journey, your customer’s needs are not necessarily the same from beginning to end. You can be flexible enough to accommodate those changing needs so you’re always on top of what your customers most want. That’s much more valuable to them than a product-centric approach.

You Choose the Top Customers, Not Just Anyone

With a product-centric selling plan, you probably don’t discern much between your customers. Any customer that’s vaguely interested in your company’s products and services is worth at least some of your time, as you may be able to get a sale out of them.

Being consumer-centric means not accepting just any potential customer. Only those who have the potential for the greatest longevity are the ones you should spend your time on. This ensures that you nurture prospects, not just leads. Prospects are ready to buy and have a greater likelihood of sticking around, both of which you want.

It’s Less about a Blanket Approach and More Streamlined

One of the biggest differences is how you sell. With the latter, the focus is more on the product than the individual. This can create instant problems, as there’s not necessarily an alignment between the customer’s needs and the product or service itself.  If the customer doesn’t need the product or service, then the sales attempt will fail.

When your company is more customer-centric, you still think about the product, but it’s not the end-all, be-all. Instead of throwing a product at anyone (figuratively, of course) and seeing who’s interested, you look at your customer and what you know about them and then determine the best product/service for that individual.

Once you build up a good track record, you can keep going back to that same customer with different products and services that are also tailored for them and their needs. Keeping in mind the flexibility that customer-centricity encompasses, this extends the customer journey far longer than a product-centric approach.

After all, when you’re product-centric, then once someone buys that product, you’re probably done with them. Unless it’s the type of product someone can buy multiple times, then it’s a one-time sale.

Customer centricity is not so one-and-done. Yes, you sold them Product A, but they haven’t seen Products B through E, and you think each of them could help your customer live a better life. Plus, later, if your company creates a Product A.1 or an accessory to Product A, you can sell those as well, generating even more revenue.

How Do You Measure Customer-Centricity?

You’ve modified your collective company thinking and began altering your approach so it’s more customer-centric than product-centric. Still, how do you know you’re doing it right? Here are some metrics you want to begin measuring right away.

Net Promoter Score

We touched on the net promoter score or NPS earlier, but let’s define it now. When you ask your customers if they’ll refer your services to someone else in their life, they’ll give you a score from 0 to 10. How high that score is would be your net promoter score.

Image courtesy of CustomerThink

If your customer answers low, such as 1 through 4, then they’re considered detractors. Between 7 and 9 are your passives, who have a more neutral approach. Those who give your NPS survey a 9 or 10 are your promoters, as they’re the most willing to support your business in the future.

Customer Satisfaction

You can also review your overall customer satisfaction, which is abbreviated as CSAT. The CSAT also uses a score system that’s 1 through 5 known as the Likert scale. This uses psychometrics to gauge how happy your customers are.

Here’s what your CSAT may look like.

Image courtesy of CustomerThink

Purchase Likelihood

This rather straightforward metric indicates the chances of your customers buying your products or services, either initially or in a repeat instance.

Customer Lifetime Value

We said before that it’s important to focus on the most valuable customers, but how do you know who they are? Through customer lifetime value, of course.

To determine customer lifetime value or CLV, you need to know how much money your customer spends on your products and services over the lifetime of their customer journey. Then, take that number and multiply the business relationship length.

To calculate customer lifetime value, first, figure out your average purchase value. Then take the average purchase value and multiply it with your company’s average purchase frequency rate.

Finally, calculate how much money you spent on conversions and then subtract that from your multiplied number to get your CLV.

Churn Rate

Not all metrics are good. You also need to know how many customers have become disinterested in your company, and you can do that through the churn rate.

First, you must figure out how many customers you’ve lost over the last year. Then, you need to calculate how many customers are average for the year. Take the first number and divide it by the second to get the churn rate.

Customer Lifetime Duration

How long will your customers stick with you? While you can never say for sure, you can use some math to get a gauge on how long you may expect to retain each individual customer. This is known as customer lifetime duration.

Conclusion

Every company should strive to become more customer-centric. This means you’re more focused on retaining customers instead of simply selling to someone who’s only marginally interested in your products and services. Through this guide, you can identify what customer centricity should look like in your own company as well as ways to improve your own client-centric approach for an audience of dedicated, repeat customers. Best of luck!

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