In today's ultra competitive market place where customers are highly empowered, competitors are trying every trick in the book to lure away customers from other companies and collaborators have become highly technology savvy. The best way for any company to move forward is by adopting a customer centric philosophy.
As the term indicates, customer-centric philosophy or customer centricity is an ideology, a value system where in companies' activities are centered around the requirements of customers. As simple as it may sound, it is probably one of the toughest things for any company to incorporate into their corporate strategy and structure. Businesses till now have been following the dominant product centric philosophy (of product centricity).
Product centricity refers to an internal alignment with focus predominantly on operations, productions and internal controls. As such, the deciding factor on many decisions was the production efficiency. Further, a product focus results in a more transactional and short-term interaction with customers.
On the other hand, customer centricity refers to an external alignment with focus predominantly on the customer and the way in which customer wants and needs are satisfied whereby value can be created both to the customer being served and the organization that is serving the customer. Customer centricity is also in line with service-centered dominant logic for marketing in that customer centricity goes well beyond selling products to customers and entering a whole new world of providing comprehensive solutions. As such, customer centricity emphasizes building long term relationships with customers.
Do these two ideologies result in tangible systems for companies and ventures beyond definitional jugglery? The answer is an emphatic yes. Customer centricity offers companies certain key advantages hitherto not offered by product centricity. Further, it enables companies in building sustainable competitive advantage.
Product development and design will be more in tune with the needs of the customers rather than being just to reflect the technological prowess or superiority of the company.
Pricing would be more in line with the value perception of the customer and his/her willingness to pay rather being an exercise to cover the cost of manufacturing.
Innovative ways of reaching customer in order to provide them convenience will replace logistic oriented distribution where places where the product ends up at is decided by a number of other operational and financial factors with no emphasis given to customer convenience.
Communications, advertising and promotions will also be line with the receptivity of the customer rather than bombarding the customer as dictated by the demands of selling a prerequisite number of products.
Co-creating value along with customer becomes possible as a customer centric culture of an organization would establish systems that would enable a constant dialogue with customers.
Effectiveness of marketing can be shifted from the traditional market share and sales figures to more comprehensive measures such as the customer life time value, satisfaction scores, and strength of customer loyalty.
Given the emphasis on relationship building in a customer centric culture, it allows companies to don a more long-term perspective rather than a short-term perspective with focus purely on quarterly results.
The customer centric philosophy will increasingly be adapted by businesses in their quest to master the new requirements and role of marketing - customer loyalty.
