Advances in technology and communication, combined with the explosive growth in data information, have given rise to a more empowered global consumer. Recent economic and political events highlight the need for companies to understand how consumers view the world and the most important attributes for their purchasing decisions.
Responding effectively to rapidly changing consumer needs has become one of the top strategic agenda items of organizations, alongside regulatory change and talent management. The value of customer-centricity has become direly important today. Customer attitudes and behavior can determine how customers view and interact with the industry, as well as their expectation for the future.
Organizations who respond best to what customers want now are most likely to succeed. A clear understanding of customer needs and behaviors across the organization will help drive profitable growth strategies and provide the confidence to invest in opportunities at a time when staying within budget is extremely difficult.
Customer-centricity and the New Customer
What is Customer-centricity? Customer-centricity is creating a positive Customer Experience at the point of sale and post-sale. And, today, this has become essentially important to all organizations. More and more organizations are adopting Customer-centric Design principles and seeking to become a Customer-centric Organization.
Consumers today are more demanding. Expectations are higher in terms of convenience, flexibility, and personal interactions. They are more diverse as more women are mainstreamed into the workforce. They are more hedonistic – it is all about me. And lastly, they are more sophisticated.
With the evolving customer demands and expectations making a dramatic change in business operating models, organizations have no way to go but become customer-centric. Starting the transformation towards Customer-centricity requires the need to focus on essential principles that will redefine relationships with customers and transform business models.
The 5 Core Principles to Customer-centricity
The 5 core principles of Customer-centricity govern the new strategic paradigm towards Customer-centricity.
- Protect business against disintermediation
The first core principle ensures current and future consumer needs are delivered and the connection with the end customer is not severed.
- Redefine customer relationships
The second principle makes sure that a product-centric business changes course and gives importance to customer interaction.
- Increase productivity to gain a Competitive Advantage
The third principle leads organizations to look at productivity with a dual lens rather than on a very limited scale. This can be a basis for a Competitive Advantage for the organization.
- Diversify sources of revenue
The fourth principle leads companies to be more strategic in terms of revenue sourcing rather than being fixated on hard and soft pricing cycles.
- Collaborate with new partners across the value chains
The fifth principle emphasizes the importance of partnerships in today global business environment.
These 5 core principles serve as a guide for organizations as they go through each step towards Customer-centricity. However, Customer-centricity is never achieved in just an instance. These 5 core principles is just the beginning.
Customer-centricity is achieved by building an operating model around a deep understanding of its customers – what customers value and what they contribute to the profitability of the company.
Interested in gaining more understanding of Customer-centricity? You can learn more and download an editable PowerPoint Customer-centricity Primer here on the Flevy documents marketplace.
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