Is your business customer-centric yet? As it turns out, most are not. By their own admission, some 55% of companies rank their customer LTV (lifetime value) capabilities as “basic” or “non-existent.” With more resources and data at our disposal than ever before, why are companies slow to adopt techniques that will help them better understand customers?
Marketing professionals are starting to identify and resolve some of the most stubborn barriers to customer-centric growth, as noted earlier this year at the PostFunnel forum. Here, we’ll take a closer look at some of the remaining hard and soft challenges businesses face in 2019.
More from PostFunnel on customer centricity:
5 Tips from Companies that Put Customer Centricity Up Front
These Modern Brands Prioritizing Customer Service Above All Else
How Companies Can Embrace Customer Centricity
What is Customer-Centric Growth?
The customer-centric approach to marketing has been observed in academic circles since at least 2000, where it represented a shift from the product-oriented and segment-oriented approaches of the 20th century. While product and segment-oriented approaches are perfectly adequate for short-term growth and customer acquisition, studies have demonstrated that long-term growth and market adaptability come from focusing on your customer’s needs.
Customer-centric growth is easy to succinctly summarize. Here’s Matt Duczeminski’s overview:
“Customer-centric organizations operate with the sole purpose of serving the customer. They see customer satisfaction as their prime motivator and understand that a continued focus on providing value is the best way to keep them coming back again and again.”
It’s key to note that customer-centric growth comes not from internal projections or conceptions of what customers care about, which is still a segment or product-oriented approach — rather, it comes from what firsthand data and experience simply shows they want and appreciate. Businesses that adopt customer-centric models often see a positive impact on KPIs like CLTV and retention, which are important metrics to cultivate. That said, many companies aware of customer-centric growth still see low rankings on these metrics, suggesting that certain barriers do exist.
A common problem is that not all businesses are organized in a way that compliments customer-centricity. In fact, one study found that while 42% of marketers say their organization is customer-centric, only 6% of businesses actually are. There are many explanations for this disconnect: perhaps they represent older businesses, haven’t expanded their market reach, use outdated organizational structures, or simply need to rethink how they approach marketing. Addressing barriers to customer-centric growth often requires adapting your organization to better meet customers at any contact point where they expect to reach you.
Hard Barriers to Customer-Centric Marketing
There are many barriers to customer-centric growth, but a few stop it dead in its tracks:
Organizational inefficiencies
The literal structure of an organization can prevent a customer-centric focus, or alternatively, redirect the practice in some more efficient way. For example, consider a business with multiple internal marketing teams — each working on a different product and doing a subpar job tracking their customers. International businesses often face this problem thanks to time zones that prevent colleagues in the same field from actively cooperating.
In these cases, campaigns operate at cross-purposes because their respective marketing teams aren’t sharing strategies. Multichannel marketers stress the importance of a unified Customer Relationship Management (CRM) team for this reason — without a single point of contact, you can’t focus on what a given customer truly wants.
Mismanaged customer data
In 2019, it’s fairly easy for businesses to collect large volumes of customer data, but storing and managing that data has remained challenging. More than half of marketing professionals have reported that a lack of data sharing between organizational silos can prevent businesses from being customer-centric.
These issues are occasionally technical, due to software or hardware that doesn’t communicate with other standards the company uses. They can also be structural, where business units aren’t sharing data into a company-wide pool or are unaware of efforts taken by their counterparts in other departments.
Lack of inbound marketing
To be truly customer-focused, marketing campaigns must be inbound rather than outbound. Inbound campaigns allow you to build up company resources that cater to what customers are looking for. By doing so, you establish your business as an industry leader, cultivate trust among well-informed customers, and create opportunities for data acquisition through gated content. By overemphasizing outbound marketing, you lose opportunities to build customer-centric advantages.
Soft Barriers to Customer-Centric Marketing
Soft barriers don’t necessarily block customer-centric marketing completely. But they can certainly slow things down, confuse your team, and generally muddle efforts to develop customer-focused strategies.
Lack of actionable data insights
The most common soft barrier to customer-centric marketing is a lack of actionable data on customers, their habits, and how they interact with your business. Even when a marketer has access to raw data, they need to uncover insights that highlight the trends taking shape. Generating these insights often requires time-consuming analysis, but digital tools like Tableau speed up the process. In some cases, industry-specific visualization tools can focus analytical efforts — much like Bedrock Analytics offers within the CPG industry.
Organizational inflexibility
Obtaining market research, observing customer needs, and assembling profiles is quite straightforward. Using that data to change the direction of your business is much harder. Less than a quarter of companies rate themselves as “good” at making changes based on customer insights. The difficulty of using data to change your organizational structure, shape strategy, or establish shared goals between business units is a significant barrier to customer-centric behavior. Putting a stronger emphasis on organizational agility can help you respond to customer needs much faster.
Failing to empower sales and customer service teams
Marketers need to understand their audience, and nobody knows the customers better than the employees who interact with them each day. Giving more power and responsibility to frontline staff members — such as sales, customer service, and CRM teams — enables those segments of the business to participate in customer-centric growth by directly contributing to customer satisfaction.
Remember, outstanding customer experience is a crucial driver of long-term growth. Expert analysis bears this out, including one Deloitte & Touche report that describes an empowered front line as a core consideration for customer-centric businesses.
Customer-centric growth isn’t easy, but it’s a strategy that bears results. Unfortunately, it’s also something marketers can’t tackle alone — an entire organization has to be on board to accomplish these goals. The good news is that marketing teams are often the best equipped at leading a customer-centric transformation.
Just remember the words of Chris Macleod, Customer Director at Transport for London: “I am called ‘customer director’ currently but that doesn’t mean I am in charge of the customer, I ‘own’ the customer or I am the only person within the organization who can have a view about the customer… a business might be organized around products or brands but there should be a customer-centricity strand that runs through that. Businesses have to think about those products and those brands through the lens of the customer.”
And it doesn’t hurt to learn from the best. Here are 5 Tips from Companies that Put Customer Centricity Up Front.