Everyone knows that the customer is always right, and a customer-centric operating model helps companies learn exactly what their customers want. Such models combine modern business practices that aim to please customers instead of rewarding short sales cycles and collecting, storing, and analyzing data from various sources, such as transaction records, surveys, and social media posts.
This data helps businesses understand customers’ wants and needs so they can develop customer-centered strategies for use throughout the organization, from pre-production and product design to delivery. With the help of innovative technologies such as artificial intelligence (AI) and machine learning (ML), the data acquired by a customer-centric model also lays the groundwork for personalized products and services.
To become customer-centered, companies should learn to think like their customers. By understanding customers’ perspectives and expectations, companies can design products and develop customer-facing digital platforms that offer a positive and memorable user experience. Adopting a customer-centric approach also makes it easier to attract new customers with tailored advertising messages. This works regardless of the sales model: B2B, B2C, or B2B2C.
By focusing on customers’ needs, businesses build stronger relationships with buyers and increase both retention rates and customer lifetime value. They also create loyalty, which impacts revenue growth even in highly competitive markets. Meanwhile, businesses that do not consider customer needs often struggle with declining satisfaction. They miss opportunities for new revenue streams, and eventually, customers churn.
What is customer centricity?
A customer-centered organization understands each buyer’s situation and expectations. It can see challenges from the customer’s perspective and adapt processes, products, and services to match customer needs. This means the customer is at the center of all decision-making. Rather than automating sales and customer service functions, customer-centric organizations humanize and personalize the sales experience. In turn, customers become loyal to their preferred brands.
Results do not come overnight. Organizations must be able to anticipate a customer’s wants and needs. They also need to understand each customer’s preferred communication method so their message reaches the target audience. Before making operational decisions, companies must collect and analyze large amounts of data.
A customer-centric business operating model
Source: McKinsey, True customer centricity: An operating model for competitive advantage
According to PwC, over 30% of customers will abandon a brand they love after only one bad experience. Customer-centric companies know how quickly they can lose the next sale, so they do what it takes to get customer service right the first time. A customer-friendly environment makes people feel as though they are heard and appreciated, which breeds loyalty for the brand.
Investing in the customer experience has the potential to improve financial performance. Businesses also become more resilient and agile when they are customer-centered. For example, McKinsey says organizations that listen to their customers see an 80% reduction in the time needed to balance supply and demand. An article in Forbes notes that customers become influencers and co-creators in a customer-centric model. Retailers analyze their purchases for strategic guidance about buying patterns and other preferences. As companies begin to learn about their customers, they begin to develop relationships with them.
Benefits of customer centricity
As these relationships continue to develop, companies that adopt a customer-centered approach see many benefits from their efforts, including:
- Higher customer satisfaction: Customers appreciate companies that listen and don’t try to sell them products that don’t meet their needs. When customers are happy, they are more likely to come back.
- Stronger brand reputation: Companies that take a customer-focused approach build trust, which leads to word-of-mouth referrals. Knowing customers’ needs and desires also results in more targeted and personalized marketing campaigns.
- Higher revenue and growth: Customers who become loyal to a brand spend more with that brand, which increases profitability. Focusing on customers also reduces churn and secures greater long-term success.
- Improved product development: Analyzing customer feedback helps refine products and leads to innovative products and services. This business-focused approach to satisfying customers offers an advantage over competitors that favor short-term sales models.
- Stronger business resilience: Companies that focus on their customers are more agile and can adapt to market changes quicker and with fewer disruptions. Employees also find satisfaction in a client-centric approach.
Pathways to customer centricity
According to California Management Review, true customer centricity affects all customer-facing functions. A customer-centric organization should make customer data available for analysis. When companies become customer-centric, they break down data silos that prevent information sharing across departments.
Value delivered and gained in a customer-centric business environment
Source: University of California Berkeley Haas School of Business, California Management Review: What is Customer Centricity, and Why Does It Matter?
The following are best practices for creating a customer-centric business:
Embed customer-centered thinking
Departments across the company tend to view customers differently. For example, R&D teams are often disconnected from customers, while product management tends to view customers through the lens of the product. Working together across departments and including sales and R&D in customer meetings yields customer-centric innovations.
Differentiate through the customer journey
In a customer-centric model, market leaders view service delivery and customer support as values instead of cost centers and balance automation with human interaction. Studies published in CMR indicate that most customers still prefer to deal with a person rather than a machine. Even as self-service becomes more prominent and powerful, people still appreciate human judgment and reasoning.
Externalize innovation
Many companies turn inward to find innovation and new solutions rather than listening to their customers’ ideas. However, successful R&D teams engage in customer-centric thinking. They work with customers and partners to create new products that resonate with buyers in the marketplace. For example, a company might find during research that their customers need a different product or service to solve their problem. Knowing this, the company can adjust its output or develop something new to address the need.
Reorient sales toward customer needs
Companies must focus their marketing and sales efforts on finding customers who want to use their products. Becoming customer-centric takes a company from being nearsighted (focused on sales figures and closing sales quickly) to being a farsighted organization that retains customers for future business growth. That means finding customers or clients who are the right fit and passing on those who are not. While not every customer-centric company should recommend a competitor, doing so may protect future sales and revenue by building trust.
Combine customer centricity with employee engagement
Companies cannot expect employees to treat customers better than the employees themselves are treated. In the most successful companies, employees are highly valued and engage with customers to constructively find ways to help them. This creates happy customers who help companies build long-term success.
Successful examples of customer centricity
As companies have learned the value of putting customers at the center of their business, several have become notable examples of successful customer-centric models.
- Fenty Beauty by Rihanna became known for being more inclusive when it started offering a wider range of foundation shades that worked for more customers. This created demand for more shade options from traditional brands, which forced them to expand their product lineups.
- Amazon’s user-friendly interface, personalized recommendations, and efficient customer service are strong examples of online customer centricity. Using AI, Amazon makes recommendations based on purchase history. The company also introduced one-click ordering and fast delivery options.
- Apple has become a leading brand because of its focus on design, feature improvements that offer genuine benefits, and strong customer service. It has built its brand on the trust of loyal users.
- Zappos offers free returns and 24/7 customer support, among other customer-centric commitments. Combined with positive word-of-mouth marketing, the retailer’s impressive loyalty rate gives Zappos a sustainable competitive advantage over some major brands.
- Netflix offers custom viewing experiences designed around different tastes and watching habits. With AI tools, Netflix makes relevant suggestions for each viewer. The network also creates original programming based on data about user preferences, which helps keep its audience engaged and coming back for more.
The customer-centric model at Intellias
Intellias has used a customer-centric model since its inception. Our own success is built on that of our customers, and we want to be known as a trusted tech partner for companies navigating digital transformation. Following these steps, we have developed a model that lets us continue to create innovative software solutions and promote our customers’ success.
Step 1: Understand client needs
Intellias wants to know about its clients, their businesses, the challenges they face, and the goals they want to achieve. Each new project starts with a thorough assessment of the customer’s technical environment and software needs, but it also begins with a friendly conversation. These early customer interactions demonstrate our commitment to open communication. These interactions also lay the foundation for more detailed conversations later.
Step 2: Develop custom solutions
As a software development company with over 20 years of experience, Intellias efficiently builds custom solutions that address each client’s needs. With the help of GenAI, our project management team organizes information gathered during step 1 to create innovative and effective solutions that satisfy our clients and strengthen their trust.
Step 3: Gather feedback and collaborate
Our engineers work closely with each customer from developing the concept to providing post-delivery support. After implementing new solutions, we listen to our customers and adjust our operations until they are satisfied.
Step 4: Forge long-term partnerships
As our partnership with a customer grows, we become trusted strategic advisors instead of just software developers. The long-term commitment results in an even higher level of satisfaction and positive word-of-mouth referrals for Intellias.
Measuring the success of customer centricity
Referrals are a sign of happy customers, but there are more formal ways to test the success of a customer-centric business model. Three metrics are especially helpful:
- Customer satisfaction (CSAT) score: CSAT indicates customer satisfaction with a company’s products or services or the overall customer experience. A CSAT score is typically gathered through a survey asking customers to rate their satisfaction. High CSAT scores indicate that the company is meeting or exceeding customer expectations, while lower scores show less satisfaction.
- Net promoter score (NPS): NPS ranks customer loyalty by asking how likely customers are to recommend a company to others. Scores are divided into three categories: promoters (9–10), passives (7–8), and detractors (0–6). A high NPS generally suggests a higher level of satisfaction.
- Customer retention rate: This tracks the percentage of customers who continue doing business over a specific period. A high retention rate indicates strong customer satisfaction and loyalty, while a low retention rate suggests customers are turning to competitors.
Opportunities for customer-centric success
Consumer demands will continue to change, and technology will change with them. A customer-centric model will become even more important for growing companies to stay ahead in competitive industries. Companies must also use predictive analytics, automation, and other modern technologies to help them make stronger connections with their customers. For Intellias, this means staying ahead of trends that affect our customers so we can offer relevant solutions to their unique challenges.
A customer-centric business model changes a company’s strategy at its core. By embedding customer centricity into everyday business practices, companies can future-proof their operations. They can also show that they still think the customer is always right.
Intellias improves business operations with digital systems that help companies use data to put their customers first. With custom software development by Intellias, you’ll find that when your customers succeed, so do you.
Ready to wow your customers? Contact Intellias to learn how custom software can make your business customer-centric.
