Why Customer-Centricity is more than just Customer Focus

by | Jun 7, 2018 | Digital Transformation, Marketing, Thoughts

This week’s curator Laura-Jane Parker considers the importance of customer-centricity for adaptive Digital Age organisations, and why a customer focus is not enough.
One of the UK’s most iconic retail companies, Marks and Spencer, has been in the headlines again for struggling to attract and keep customers. A stalwart of the British high street, they announced plans to close over a hundred stores following the latest run of disappointing financial results. Much of the analysis has focussed on M&S losing sight of who their customers are today. Fast-fashion brands are providing better products and experiences, that better match digital-age expectations. This piqued my interest since M&S are often cited as an exemplar of customer service excellence.
How can a company that is so good at serving customers not know what they want?
For me, the M&S story highlights the difference between customer focus and customer-centricity. The retail industry is not the only one that is struggling with this challenge.
In financial services, challenger digital entrants such as Monzo and Revolut are reimagining the role of banking in the 21st century. They are taking a user-centred look at the value banks can add to the lives of their customers. Despite having terabytes of customer data, most incumbent banks do not make use of it. They could use it to help you manage your finances better, for example by informing you of your spending habits. More worryingly, they do not even seem interested in doing so. These are examples of the more basic types of services and features fintech startups have co-created using customer input. So, these challengers ensure their products and services add greater value and utility to their customers’ lives.
Manufacturing organisations grappling with Industry 4.0 are trying to unpick decades’ worth of Tayloristic thinking to bring their products to a digital ecosystem. Pioneers of this approach understand that customer-centricity is not about digitisation of current production processes. Nor is it creating digital add-ons to existing products. Instead, the focus must be on finding ways to create a deeper relationship with customers, to sense and respond to their needs with a platform of services that can anticipate their demands.
It is clear that customer-centricity is a key attribute needed to be an adaptive business capable of thriving in Digital Age. But as we have seen from these examples, this does not just mean good customer service or even customer experience. A customer-centric company places the customer and their needs front and centre of the organisation. It also works relentlessly to deliver what the customer has not even thought of yet. Embedding this mindset into your culture means having employees that actively seek to understand customer needs and use these insights as a force for transformation.
To be truly customer-centric you need:
  • Empowered teams able to use their initiative in responding to customer needs and issues
  • Customer co-creation as the preferred way to develop and iterate products and services
  • Open data flows of customer behaviours, satisfaction and actions to be monitored, analysed and shared internally, and used as the basis of improvement actions
  • Clarity of purpose so all teams understand who their customer is and how their work provides value
  • End-to-end value focus such that both internal and external customer satisfaction are prioritised and used as KPIs for all teams
To help explore this topic further, I have collected a selection of links on these themes: