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Home - Customer Support & Service - How to Create a Customer‑Centric Business Strategy?
Reviewed by : Prasanta Raut
Imagine you have exhausted all of your resources and effort to produce a top-notch product. But still, businesses whose product is inferior to yours are outperforming you on the market.
What if the missing piece in your effort is a customer-centric business strategy? In today’s world, having a good product only will not quite cut it for you, as competitors will employ their resources to improve customer experience as well.
In this article, we will learn a brief overview of customer‑centric business strategy and how to set it up to maximize growth.
Let’s get started 🚀
🔑 Key Highlights
Table of Content
In simple terms, customer-centricity puts customers’ needs first. It is an approach to business attitudes and policies.
This approach involves analyzing data and feedback to understand customer behavior. It enables companies to adapt by tailoring their products, services, and communications.
This philosophy values personal interactions and a smooth experience. It aims to boost satisfaction and ensure long-term loyalty. Customer-centricity, on the other hand, promotes a process. It is interactive and responsive to customers’ inputs for continuous improvement.
This approach aims to align the company’s goals with customer expectations. It seeks to improve retention, reputation, and market success.
A customer-centric approach is essential for a business to foster. Here are some of the main reasons why that is useful in today’s market:
A customer centric business’s sole mission is catering to users and their needs and demands, so it is obvious that it increases customer satisfaction.
A large focus is placed on delivering personalized experiences so that businesses can improve customer satisfaction.
With a customer-centric business strategy, your main focus is to actively listen to the customer feedback and make them feel valued and understood.
Customers are more likely to have a positive response, improving customer loyalty and retention rates. With this approach, the customers are also likely to recommend your company to others, strengthening the relationship.
A customer is more likely to return to a business that meets or sometimes even exceeds their expectations. So, a customer-centric approach ensures that the services are designed to provide value and address customer concerns quickly.
By building strong relationships, the company will reduce the churn rate and increase customer loyalty. Customer retention not only improves the growth rate but also increases the Net Promoter Score, aiding the business.
Strategies like personalization and reward programs also help to boost customer loyalty.
With Customer Retention Rate, a customer-centric approach also helps to boost company revenue. By understanding customer preferences, businesses study new opportunities and tailor their services accordingly.
The customer-centric approach also increases the upselling and cross-selling opportunities as the services align with what the customers need.
With this approach, the company can boost its Monthly Recurring Revenue as well. Satisfied customers are also likely to make repeated purchases, which in turn will increase the revenue.
When you provide exceptional services, it can also justify premium pricing, further contributing to financial growth and market success.
Satisfied customers can only benefit your brand. A customer-centric approach helps with understanding customers’ concerns and ways to solve those issues.
When companies provide satisfactory services, they cultivate trust and credibility. People are likely to recommend your products to others, and positive word-of-mouth spreads, increasing overall brand reputation.
Over time, with these business strategies in place, brand reputation increases, allowing you to also have a competitive advantage in the market as a company that cares for its customers.
Understanding and responding to customer needs quickly can help a business gain a competitive edge over its competitors.
A company with a product-centric approach might deliver a quality product, but sometimes, that may not only be what the customers are after.
With a customer-centric approach, brands take time to understand what the customers need and then only proceed to deliver those services.
By offering personalized experiences and solutions that cater to user demands, you can create unique distinctions and stand out, even in crowded marketplaces.
With businesses placing their priorities upon customer satisfaction, they are always aware of the problems that the users are facing, which leads to effective and quick problem resolution.
A quick solution to problems will help to improve the brand image as well and turn a negative user experience into a positive one.
So, a company must always place a big amount of its focus on customer service teams dedicated to problem resolution.
A customer-centric approach also pushes a business towards innovation and improvement. By regularly focusing on customer feedback and needs, companies are aware of where customers demand more.
Businesses gain valuable insights from customer feedback and needs. Those insights can then transform into the base work for company enhancement.
Aligning the company’s growth with the demands of users always offers a chance for improvement.
Brands can stay ahead of their competitors by delivering relevant and valuable offerings. This approach also establishes a culture of innovation and motivates a company to improve existing products or services.
Here are some of the challenges you may face in the process of becoming customer-centric and the solutions that might help:
To establish Customer-Centric B2B and Customer-Centric B2C strategies, here is a step-by-step roadmap:
The first step is to embrace a customer-centric culture. The brand leader sets the tone by prioritizing customer satisfaction in vision and strategy.
All employees must understand the importance of the culture and receive appropriate training.
Concepts like open communication and feedback should be embedded in the workplace, and customer success stories should be celebrated. Employees who go above and beyond to serve customers must be motivated.
Businesses should improve their actions to align with a satisfactory customer experience. Building a culture like that will also lead to loyalty.
Strategies to predict and address customer requirements must be in place. These strategies need to be implemented beforehand so a business has the facilities to solve any problem that is likely to arise in the future.
A brand should be ready to go all in to predict user behavior through surveys, focus groups, and even social media in some cases.
Recognizing what the user wants and how they want it will be a strong point for businesses to stand out in the market competition.
This forward-thinking approach will lead to long-term solutions and position the company as an innovator in customer care.
Customers are the heart of any brand, and retention is a very important concept in fostering businesses. So, valuing customers who repeatedly chose your brand over your competitors will decrease the Churn rate.
The offer can be anything from discounts to personalized rewards. You can also use data on customer behavior to offer a benefit that aligns with the user’s shopping patterns.
Rewarding loyalty will encourage customers to shop with the same brand repeatedly and increase the Net Promoter Score.
A company’s customer-centric business strategy is as good as the employees make it, so authorities need to empower employees.
You can provide them with tools and authority to make decisions that impact customer experience.
It is also necessary to make the employees feel valued and respected. This good treatment will resonate in their performance in the company’s efforts to establish a customer centric approach.
Empowered employees are likely to deliver outstanding services, improving the overall customer experience and boosting loyalty.
To further empower the employees, you can set up reward programs where exceptional employees are rewarded accordingly.
Various tools will help you measure customer satisfaction metrics. Proper tool usage boosts customer service standards, allowing the company to maximize available resources.
The tools like CRM systems and tools for market automation and customer communication can be used to improve the overall system.
These tools help to make sure that customer interactions are seamless and that the data is used effectively to personalize customer experiences.
Furthermore, analytics tools can monitor user behavior and feedback. If the proper tools are implemented, errors can be reduced, and the ability to respond to customers can improve significantly.
Like every other system, evaluation is essential to establish customer-centric strategies. To evaluate performance, the brand needs to set clear metrics and key performance indicators (KPIs).
Regularly reviewing metrics helps to track progress and assess whether the goals are being met or not. Customer feedback is a strong source to improve the company’s performance, so regularly reviewing them is a necessary step as well.
Businesses can make adjustments to strategies that will ensure improved customer experience and business outcomes.
There are many metrics that can help a business understand how satisfied customers are with the services they offer. Here are some of the major KPIs which measure the success of a brand:
Customer Satisfaction Score is a metric that is used to measure how satisfied the customers are with the service or products provided by a company. It is generally measured in percentage. (Range from 0% (terrible) to 100% (fantastic)).
The users are given a choice ranging from 1 to 5. The options range from very dissatisfied to very satisfied. To calculate the CSAT score, the following formula is used:
CSAT = (number of positive answers / total number of responses ) * 100
A score between 75% and 80% is generally considered a good CSAT score. The outcome means that at least 3 out of 4 customers gave you a positive score.
This is a measure of how likely customers are to recommend the company to others. Net Promoter Score measures customer loyalty and satisfaction.
NPS is a very accurate predictor of business growth, i.e., if the NPS is high, your business is likely to grow. A high NPS is also an indicator of a healthy relationship with customers.
To calculate NPS, customers are asked to answer a range of 0 to 10 about how likely they are to recommend the company to others.
NPS = %Promoters – % detractors
Where, Promoters are the people who answer with a 9 or 10, and Detractors are the people who answer with a 6 or lower.
Customer Retention rate is an important metric that almost all businesses measure. It is the percentage of customers that the company retains over a period of time.
For example, if a business with 1000 customers ends a fiscal year with 600 customers, then your retention rate is 60%.
The customer retention rate can be calculated using this formula:
Customer Retention Rate = [(E-N)S] *100
Where E = number of customers at the end of the period
N = Number of customers added within the given period
S = Number of customers at the start of the period
Customer Lifetime Value (CLV) refers to the total revenue a business can generate from a single customer until the end of their business relationship. The longer the relationship, the higher the customer’s CLV becomes.
This is a very important metric as it helps you to target your ideal customers. Measuring CLV also simplifies financial planning.
Customer Lifetime Value can be calculated using this formula:
CLV = Customer Value * Average Customer Lifespan
Churn Rate measures the rate at which customers stop doing business with an entity. Like most of the other metrics, the Churn Rate is also measured in percentage.
For a company to grow, its growth rate must always be higher than the churn rate. To understand it simply, the churn rate is the exact opposite of the growth rate.
To calculate the Churn Rate, the following formula is used:
Churn Rate = (Lost customersTotal Customers at the start) * 100
First Response Time (FRT) is measured as the duration of time from when a customer issues their queries to when a representative responds to them.
Unlike others, this metric is not calculated in percentage. Instead, it is measured in minutes, hours, or days.
The formula to calculate the first response time at any particular hour of the day is:
FRT = Total FRTs during that particular hour/ Total number of resolved tickets
In conclusion, a customer-centric business strategy is crucial for business growth and competitive advantage. By prioritizing customer satisfaction, businesses can increase their revenue and build a strong brand reputation.
Metrics like CSAT, NPS, and CLV are vital as they allow businesses to understand how satisfied customers are on a scale.
A business needs to overcome many challenges before completely implementing those strategies, but once a brand bypasses those hurdles, it can maximize resource utilization.
With a customer-centric approach, a business can improve its market position and lead to long-term success.
The three pillars of customer centricity are:
The four Cs that are primarily concerned with Customer Centricity are culture, community, conversation, and consistency.
Customer Relationship Management (CRM) serves many purposes. One of the many things CRM is used for is supporting a customer-centric strategy. It provides customer information and enables personalized interactions.
These systems gather data and track customer interactions. This information can be used to segment customers based on their behaviours and preferences. Tools are also available to support requests, which ensures that the representatives have up-to-date information.
Hence, CRM provides data and tools which eventually help towards customer centric business model.
As it is already in the name as well, the most important element in customer-centric marketing strategy are customer’s needs, desires, and interests.
Prasanta, founder and CEO of Dialaxy, is redefining SaaS with creativity and dedication. Focused on simplifying sales and support, he drives innovation to deliver exceptional value and shape a new era of business excellence.
Prasanta Raut