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Strategy

2 Fundamental Misconceptions About Customer Centricity

Being customer-focused is NOT being customer-centered, but many companies mistakenly think it is. Use this actionable advice to help you sort it out

Matt Duczeminski
April 18 2018

A few months ago, we wrote about the unfortunate prevalence of “faux customer centricity” throughout the B2C world. A lack of true customer centricity within an organization is rarely due to negligence or malicious intent. Rather, it’s often due to a faulty understanding of what customer centricity actually entails. We’ll look at two of the biggest misunderstandings organizations often have regarding customer centricity and show just how damaging it can be to move forward before clarifying these misconceptions. We’ll also provide some actionable advice for how to head these problems off before they cause too much destruction.

Let’s get started.

Customer-Focused ≠ Customer-Centric

Perhaps the biggest misconception about customer centricity is that it requires you to put your customers at the center of the universe, bend to their will, and do everything in your power to make them happy. This isn’t completely incorrect; but it certainly is a bit misguided. All too often, companies conflate being customer-focused and being customer-centric. Unfortunately, this fundamental misunderstanding causes these organizations to spend (read: waste) valuable time, money, and energy on customer-facing initiatives that aren’t good for business. That is the crux of customer centricity: It’s not that you’re to put customers at the center of your business; it’s that you’re to put customers at the center of your business decisions.

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Let’s look at a hypothetical example to illustrate this point:

You receive a less-than-stellar review of your services on your company’s Facebook page. Not only do you reach out to the customer and offer to mitigate the problem they faced, but you also work to implement improvements to your services to ensure the problem doesn’t occur again.

Sounds pretty good, right? You proved to the customer that you’re willing to put in the necessary effort to help them succeed with your product/service and you also made a permanent improvement to a certain area of your service, too. But in relentlessly focusing on satisfying this customer, you failed to consider how these efforts would impact your business. Come to find out, the customer had no plans of doing business with your company in the future, anyway. You succeeded at pleasing the customer, but you failed to get anything in return for your efforts. Your goal when running a business isn’t only to satisfy your customers; it’s to satisfy your customers and make money doing so.

So, rather than bending over backward for each one of your customers, customer centricity is about identifying the customers that are most valuable to your organization – and focusing relentlessly on catering to the needs of these individuals. The benefits of operating in this manner are two-fold:

For one thing, you stand to gain much more in monetary terms from your best-fit customers, so it makes sense to invest in ensuring their satisfaction. Taking things a step further, by focusing on making improvements that satisfy your best-fit customers, you’ll inherently attract similar customers – who provide similar value – to your organization in the future. As more and more of your customers are best-fit to your services, you can feel confident that their feedback is valid, and will help you make meaningful improvements to your services.

Taking Action

There are a few things to do and consider while shifting to a customer-centric approach to customer relations that can help your organization moving forward. You need to focus on the right metrics – such as customer lifetime value, winback rate, and early repeat rate – before diving into any customer-related initiative. Essentially, these metrics should inform your strategic approach to customer relations, so that you can be sure your efforts will pay off in dividends for your company. Once you better understand the importance of these metrics, you can then segment your customers based on their value to your company. This will enable you to quickly identify your best opportunities, prioritize customer service initiatives, and keep your most valuable customers on board for a long time to come.

For a real-world example of how shifting to a customer-centric mode of operations and focusing on customer value can help your business, check out this case study from Merkle.

Superficial Restructuring

One of the biggest barriers to becoming a truly customer-centric organization is the way an organization is structured.

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As reported by SMS’ 13 Mistakes Organisations Make When Becoming Customer Centric:

“(A) chief mistake is trying to be customer centric but not changing anything about how the organisation is structured or how key connections and dependencies internally are supported.”

Unfortunately, many companies overlook the second part of that sentiment: ensuring everyone within the organization becomes as connected as possible. Without this key piece, no amount of organizational restructuring can possibly make a difference.

(Note: We’ve talked about the importance of generating synergy between your marketing and sales teams. While this is a part of what we’re talking about here, there’s much more to it.)

We sometimes hear of companies that claim to have shifted to a customer-centric philosophy – but, more often than not, these companies are simply paying lip service to their audience. Companies bring in “customer experience specialists,” or even create entire departments revolving around improving the customer experience, and assume they’ve fired the silver bullet that will make them stand out in their industry. If they exist merely as consultants – whose suggestions may or may not be taken seriously by other departments within the organization – there’s little point to having them on board in the first place. To truly become customer centric as an organization, “restructuring” isn’t enough; the company’s entire operation needs to be completely disrupted.

Let’s take a look at what we mean by diving into a case study by

Anecdotes like the one above are anything but rare.

According to a recent whitepaper from NewVoiceMedia, many organizations maintain silos that hinder their ability to provide a truly customer-centric experience to their followers. Senior Vice President of Marketing for NewVoiceMedia, Tim Pickard, explains the three most common – and most detrimental – silos that he discovers within companies are:

  • Operational Silos: Essentially, operational silos exist when a specific division or team within an organization focuses solely on the task at hand, rather than on the “big picture.”
  • Channel Silos: For a prime example of the problem with channel silos, check out this Twitter interaction between Old Spice and a dissatisfied customer. The more hoops a customer has to jump through before getting the help they need, the less likely they are to do business with your company in the future.
  • Hierarchical Silos: Hierarchical silos exist when an employee (or team) is unable to help a customer due to internal bureaucracy. For example, in instances in which a ground-level employee knows the best way to handle a customer’s issue, but needs to “check with the manager” before acting, the customer faces an unnecessary disturbance in their overall experience.

While these aren’t the only silos that may exist within an organization, they are likely the most detrimental as far as customer centricity goes. As we said earlier, no amount of “restructuring” will bring about customer centricity if your organization’s underlying foundation remains company-centric.

Taking Action

One of the most common pieces of advice you’ll hear regarding the path to customer centricity is to “get your entire team on board” with the transformation. But saying you’ve done this, and actually having done it, are two different things. In the case of Worthix’s client, the bank was convinced it was a customer-centric company, due to the fact that it had recently “won an important award stating that (it had) among the top customer satisfaction ratings in the market.” But the fact that the risk management department took action without considering their customers – and the fact that the department didn’t notify other teams of the decision – make it clear that the company was anything but customer centric. It’s not enough that your customer-facing personnel acts in the best interest of your customers (that should be a given, anyway). To truly be considered customer centric, even your “behind-the-scenes” teams need to continuously be aware of how their actions will affect your organization’s clientele.

Adding a “customer experience” team may not make a difference if the team is seen as “extra” by the other departments of your organization. To ensure this doesn’t happen, consider building your CX team out of existing members of your various departments. By creating a “customer experience board,” you’ll enable each of your departments to gain insight into what happens throughout the rest of the company – making it much easier for everyone to stay in the loop.

Wrapping Up

Becoming customer centric is more than just being “in it for the customers.” True customer centricity means figuring out the most effective and efficient way to provide value to your customers throughout every step of their journey with your company. Of course, the main byproduct of doing so is that your company will begin to run more efficiently than it ever has before. By putting your valued customers at the center of everything your company does, you’ll end up reaping just as many benefits as they get from you.

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Matt Duczeminski

Matt is a professional writer specializing in helping entrepreneurs improve relationships with their customers. He lives in Philadelphia with his wife, Sarah, and he'd probably get a lot more work done if his cat would stop bothering him.

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