Customer centricity. Customer obsession. Customer focus.
These are not just boardroom buzzwords but rather essential principles for businesses today – from global enterprises to innovative upstarts. Over the last 10-15 years there has been a pivot from being price- and product-focused to centering everything around the customer. Starbucks, Nordstrom, Hilton, Amazon and other brands have created the blueprint for customer experience and customer relationship management (CRM), and have shaped customer expectations for brand interactions. In 2022, all companies need to take a radically customer centric approach.
In this post, we’re answering questions like:
- What is customer centricity?
- Why is customer centricity important?
- How to be customer centric
- What are the top customer centricity examples?
What is Customer Centricity?
Customer centricity means you put the customer at the center of everything you do. Your products, in-store and digital experiences, and customer service are all designed with the goal of providing a consistently great experience and adding value. The entire company has a ‘customer culture’ and removes siloes to provide a cohesive, unified experience.
Customer centric companies remove friction, preemptively solve problems and meet customer needs in unique ways. These companies often leverage powerful technology like machine learning, predictive analytics and artificial intelligence, in addition to sophisticated CRM platforms to provide truly effortless interactions and hyper-personalization
Customer centricity can exist across a variety of dimensions of a business including Customer Support, Marketing, and Sales departments.
What is Customer Centric Selling?
In a nutshell, customer centric selling is a selling strategy that values building meaningful relationships with your customers as opposed to pushy sales tactics. Similarly, customer centric service also is about focusing on growing meaningful relationships, but in the context of the customer support role.
“Human-centric marketing is defined by brands that approach engaging their current and prospective customers via advertising and marketing tactics as whole human beings with hearts, minds, and spirits.” — Philip Kotler
Why is Customer Centricity important?
Customers today expect more. And this comes at a time when customer experience (CX) is the primary differentiator in a sea of sameness. CX now dictates where people spend their money and develop loyalty. Companies need to obsess over providing positive experiences and adding value in order to create a positive view in people’s minds. Every interaction matters. CX expert Shep Hyken says: “Customers notice almost everything. In fact, their brains are wired to make a note of anything they don’t like1.”
Adopting a customer centric mindset is crucial for many reasons:
- Every interaction matters: One in three customers will leave a brand they love after one bad experience2.
- A customer centric philosophy can reduce customer acquisition costs: It’s more expensive than ever to acquire new customers: it’s 5X more expensive to acquire a new customer than keep an existing one.
- Customer centricity unlocks revenue: 86% of buyers are willing to pay more for a great customer experience3. Personalization alone can increase overall consumer spending up to 500%4.
- Customer centricity motivates people to recommend your brand: More than 65% of customers said that their experience on the website or app would be at least a “very important” factor in their willingness to recommend a brand.
How to be customer centric
The first step in becoming customer centric is understanding what your customers need and want. Take frequent pulses on pain points and identify and eliminate friction points: 96% of customers with a high-effort service interaction become more disloyal compared to 9% who have a low-effort experience5. The key to creating such an experience is for the team to be intimately familiar with the customer’s journey through your buying experience.
Customer centricity is also created by personalizing and contextualizing experiences, something that 75% of customers expect today6. This involves surfacing the right products, experiences and information to specific customers at the exact moment of relevance. To do this, companies need to get away from silos and disconnected systems to connect all of the dots of the customer into one centralized view. According to Professor PhD Luigi-Nicolae DUMITRESCU, “You cannot departmentalize a customer centric approach. It must emanate from the very heart of the organization. All departments need to work in harmony, if not complete synchronicity in all communications with customers.7”
Customer centric brands also understand that you can’t be everything to everyone. In his book, Customer Centricity, Wharton professor Peter Fader encourages companies to look at the “overall customer lifetime value and concentrate efforts on those customer segments that were most valuable and interesting to optimize profit8.” Segment your customers to identify the best ones and develop strategies to provide these segments with the best experience. Don’t put resources into courting customers who don’t pay off in LTV. The most efficient way to accomplish this is by using a customer relationship management platform.
Creating a customer centric mindset needs to be managed by an internal champion overseeing everything to do with the customer. In an indication of the shift away from price focus and product focus to customer focus, the role of the Chief Customer Officer has been one of the fastest-growing. In fact, 22% of Fortune 100 companies and 10% of Fortune 500 companies now have chief customer officers9.
The top 5 customer centricity examples you haven’t seen anywhere else
Companies like Starbucks, Amazon, Netflix and Walt Disney World are often cited for their customer centricity, as they should be. In this post, we wanted to find customer centricity examples that you may have never seen before.
1. Wayfair uses AI and data for hyper-personalization
Wayfair offers over eight million products, from furniture and décor to appliances and storage10. It has 37,173 kinds of coffee mugs alone, and when you account for different colors, sizes or materials, there are over 70,000 options11. Without taking a customer centric approach, the user experience would be overwhelming and time-consuming.
The company uses predictive analytics and AI to create detailed buyer personas to show the most relevant products for customers, eliminating the need to scroll through pages and pages of products to find something they like. Wayfair “uses machine learning technology to work out which products complement one another and recommend them to customers. This makes sure that Wayfair isn’t wasting its customers’ time by recommending products that simply won’t work with the items they already own12.”
According to Wayfair Cofounder Steve Conine: “On average, we capture and store four terabytes of data every day and over the course of a year, we track approximately 40 billion customer actions on our site…..Data has been democratized across the organization — it can be accessed and used regardless of whether an employee works in marketing, logistics, or engineering. Data has allowed the company to better execute on its strategy through improved personalization.”
2. Stitch Fix removes the hassle of clothes shopping
Stitch Fix is one of the most fascinating customer centricity examples. The company gets to know customers through a personalized style quiz, and then after finding out clothing style and color preferences, favorite brands and styles, and budget, stylists curate pieces and outfits for the individual customer. There’s no subscription, items can be easily returned and you only buy the products that you like. Points of friction have been identified and eliminated.
The company relies on AI and big data to power its operations. CEO Kristina Lake says, “Data science isn’t woven into our culture; it is our culture13.” The company reviews style trends, preferences, sizing info, and inventory. Stitch Fixes AI algorithms and data experts determine what styles typically work for each type of customer. And this is paying off: Stitch Fix increases its client base by 17% each year and currently serves more than 3.5 million customers14.
3. Ikea’s In-Store and Digital Experience Elevate the CX
The customer centricity at IKEA runs deep. According to Maja Bricevic, a Communications Specialist with IKEA Canada, “IKEA’s vision is to create a better everyday life for the many, and is committed to meeting the needs of its customers by creating a great customer experience, whenever and wherever [customers] want to meet us.”
The Swedish home retailer is recognized for its immersive in-store customer experience. Customers shop carefully furnished and curated spaces, visit a food court and snack on famous meatballs and even take advantage of complimentary childcare.
Apart from the in-store experience, IKEA’s digital experience is also very customer centric. One way the customer delivers this is through its IKEA Place app. Shopping for home furniture can be challenging to imagine how an item will look in your space. The app gives customers the ability to virtually place true-to-scale 3D models in their own space, furnish a whole room in one tap or find the perfect product by searching with your camera.
4. L’Oreal mixes up makeup on demand
Unlike products like toys or books, which are the same for everyone, makeup looks different on every customer. To help customers find the exact right shade, the company launched L’Oréal Perso, an AI-powered smart device that creates custom formulas for lipstick, foundation, and skincare. A customer uploads a picture to the Preso app “which will use AI to identify skin conditions like dark spots, large pores, or wrinkles.” The app layers in real-time contextual data to account for environmental concerns that affect the skin, including pollution, pollen, and UV index. All of this is used to create a custom formula that is dispensed in a perfectly portioned, single-dose.
The company aims to give consumers more control over their makeup and skincare, according to Guive Balooch, global vice president of L’Oréal Technology Incubator15. “Consumers have been asking to be part of the process of their beauty and have a stronger relationship with how well it’s working. [With Perso], you become part of the process of your cosmetics,” he says.
5. Hilton treats every loyalty member like a true VIP
Hilton is one of the biggest hotel brands in the world, boasting 6,110 properties with more than 971,000 rooms in 119 countries and territories. Annually, 178 million guests stay at its properties. Even with these extraordinary numbers, the brand has implemented strategies to be truly customer centric. The driving force behind this is the Hilton Honors guest loyalty program, which has over 115 million members16.
With the free Hilton Honors mobile app, guests can book their stay, select the exact room they want, order meals, check-in and out, unlock their door and elevators with a Digital Key, all from their smartphone17. The honors program and app provide a truly frictionless experience from booking and pre-stay to on-site. Because of these digital interactions and building rich customer profiles, “front desk staff can focus on more valuable face-to-face interactions, while guests avoid worrying about losing hotel room keys.”
Final Thoughts: Customer centricity is here to stay
Keeping the customer at the center of everything you do is a must for companies to compete, build loyalty and generate revenue. Customer centricity needs to be a fabric of every modern organization, with siloes eliminated and departments working together with the same goal: create positive customer interactions that deliver value across the entire customer lifecycle.
Are you interested in making one of these customer-centricity lists? Let’s discuss how AI can transform your company into a customer-centric powerhouse.
For more information, visit:
- The 15 Best Customer Experience Tools to Elevate CX
- How Customer Self Service Can Help Your Business & Your Customers