What Is Customer Centricity? How To Achieve a Better Customer Experience

It is now crucial to have the appropriate resources in order to be successful in such a competitive and contested industry so that the user experience with your brand is the best it can be. As a result, the concept of customer centricity is gaining traction in a variety of businesses. The goal of efforts aimed at increasing consumer pleasure is to improve loyalty and, as a result, sales.

Read more on how your startup or business can deliver an exceptional customer experience here.

What Is Customer Centricity

Customer centricity entails prioritizing and placing the consumer at the centre of all you do. You may believe to yourself, "That's simple." That is something I am capable of. Is it, however, really that simple? Being consumer-centric includes more than simply emphasizing the importance of the customer.

It's all about getting to know your customers so you can anticipate their wants, requirements, and communication preferences, provide meaningful experiences and form long-term relationships.

Why Is Customer Centricity Important

Customer-centric businesses work to understand their customers and act on that knowledge by cultivating a culture that allows employees to make the best decisions for both the customer and the company at the same time. They consider the impact of each business decision, process change, and consumer touchpoint on the overall experience.

Customer centricity is a strategy as well as a culture. To be acknowledged by the final decision maker: the customer, it must be engrained in an organization. Bigger retention rates, more recommendations, higher price premiums, and ultimately more income are all benefits of successful organizations. Below are a few reasons as to why companies should be customer-centric.

  • Recognizing The Possibilities Of Growth. Consumer centricity has the advantage of allowing businesses to spot and capitalize on growth possibilities, such as unmet customer wants. For instance, a customer survey conducted by an electronics company might reveal that the majority of its customers are women who prefer to have others assist them in installing equipment in their homes. This may lead to the company expanding its services to include in-home electronics installation.
  • Customer Satisfaction Improvement. Customer happiness is another potential benefit of a customer centric business approach. The goal of customer centricity is to learn what customers enjoy and dislike so that products and services can be tailored to better meet those demands and reduce irritants. For example, a hotel might provide both high-speed wired and wireless Internet connections in each room, allowing guests to choose their preferred connection. Customers that are happy with their experience are more likely to return in the future.
  • Creating a One-of-a-Kind Experience. Because customers have so many options for where to buy things, creating a distinctive, high-quality shopping experience can be just as vital as the products themselves in luring them back. Small enterprises can gain an advantage over larger competitors in this area. Because small businesses have fewer clients than huge corporations, they can devote more time to providing customized service and building long-term relationships.

Challenges Faced Getting To Customer Centricity

Customer centric organizations are more lucrative and grow revenue quicker than customer experience laggards, so focusing on their demands makes good commercial sense. In truth, most businesses fall short of meeting their customers' expectations when it comes to products and experiences.

Many businesses must rethink how they do business in order to develop customer centricity. Rather than perceiving service flow as a straight line from their firm to their customers, service delivery must be at the centre. Regardless of their distance from the end-user, every department and individual must understand their position in the customer's experience. Below are some of the challenges a company might face when getting to customer centricity.

  • The leadership team does not practice what they preach. While the leadership team may talk openly about the need of being customer centric and what that entails, they rarely practice what they preach. This is sometimes because they are driven by quarterly outcomes and have a short-term perspective on what is vital.

    They often find it difficult to support initiatives that their teams are driving because they have not been tied to data. Other times, they believe in creating a customer centric organization but are unsure how to go about doing so.
  • The plan has not been translated into implementation details. People in the company are disengaged from the plan and unable to translate it into actionable steps that can be taken to support it. They find the plan to be too theoretical, and they are unable to see how it fits into their everyday deliveries.
  • There is no customer experience light to guide you. The end-to-end customer experience was not created collectively with the demands, motivations, and sentiments of target customers in mind. As a result, there is little cross-functional buy-in, and each department does its best to improve its piece. This typically has unintended consequences in other sections of the consumer journey, resulting in a negative experience.
  • Multiple endeavors, even if they have the greatest of intentions, deplete resources. Projects haven't been prioritized properly, resulting in a scattergun effect that produces friction, overstretches resources, and strains budgets as everyone tries to do everything and does it poorly.

Here are some solutions to avoid or help with the challenges that were mentioned above:

  • Leadership should be lived. In their decisions, the leadership team can set an example. Change their teams' mindsets by asking them to demonstrate why and how the work they're doing improves the customer experience and the value it brings to the company.
  • Individuals should be able to see the plan in action. Assist everyone in understanding the strategy, why it's vital, and how their function fits into it. Align their SMART objectives and reward their accomplishments to make it practical. Provide regular progress updates and support and guidance to individuals who stray from the path.
  • Collaborate to create the future's ideal customer experience. Create aspirational customer experiences collaboratively to gain buy-in across the organization and ensure that each business activity can demonstrate progress toward the final goal. Why spend time and money if business activity does not assist the execution of the ideal customer experience?
  • Make a list of your top priorities. Try not to take on too much at once. Create an activity roadmap that takes into account finances, resources, and the required delivery time. Even the most sceptics will be influenced by early triumphs, which will increase optimism and demand for more. More folks will want a piece of the action if you're successful.
  • Measure the right things and make a balanced scorecard public. Create a cross-functional performance dashboard that shows how you're doing on your goals. The dashboard should track the most important internal KPIs and link them to the Voice of the Customer (VoC) to show any correlations and business effect as significant customer experience initiatives are implemented.

Measuring The Benefits Of Customer Centricity

In today's highly competitive and rapidly-innovating environment, customer centricity is critical to survival. Businesses who do not understand how to meet the demands of their customers will surely lose out to new, more focused businesses. Public organizations that do not change their methods, vision, or objectives through deep-dive consultation will be seen as out-of-touch and bureaucratic. If you are not sure you are losing out, here are some methods to measure.

Churn Rate

It's growing more difficult to acquire new clients. As a result, more businesses are focusing on retaining existing clients rather than seeking out new ones. This is because

  • recruiting new consumers might cost up to 5 times as much as keeping existing ones.
  • A 2% improvement in client retention has the same earnings impact as a 10% reduction in costs.
  • Each year, businesses lose approximately 10% of their consumer base (also known as customer churn)

Understanding why people leave and why people stay customers is critical to increasing customer retention rates.

To calculate churn rate follow the steps:

  1. Choose a time frame: monthly, yearly or quarterly
  2. Calculate how many customer you had at the start of the time period
  3. Determine the total number of churned customers at the conclusion of the time period
  4. Subtract the number of clients you had previous to the church from the totla number of customer you had.
  5. Multiply that figure by 100

Net Promoter Score

The Net Promoter Score (NPS) is a customer loyalty indicator established by Bain & Company management expert Fred Reichheld in partnership with Satmetrix. The goal was to come up with a simple and easy-to-understand customer satisfaction number that could be compared over time or between industries. The Net Promoter Score (NPS) measures how likely a respondent is to suggest a company, product, or service to friends, family, or coworkers. The concept is simple: if you enjoy using a particular product or doing business with a particular firm, you want to tell others about it.

The respondent is specifically asked the following "ultimate" question: How likely are you to tell a friend, colleague, or family about company/brand/product X?

This question can be answered on an 11-point scale ranging from 0 (not at all likely) to 10 (extremely likely). T

When a customer responds to this inquiry, their response is divided according to predetermined criteria:

  • Promoters (9-10): Are enthusiastic about your product or service and are inclined to refer you to future customers. They will have a higher customer lifetime value because they are repeat customers
  • Passives (7-8): People who gives these numbers are satisfied with their current relationship with your company, but they are most likely to transfer to a competitor if a new or better product becomes available
  • Detractors (0-6): These people are dissatisfied with your product or service and are likely to harm your brand's reputation by telling their friends, family, and connections about it.

Customer Lifetime Value (CLV)

The most valuable "asset" for a customer-centric company is its customer base. If you're investing in long-term connections, you can use customer lifetime value, or CLV, to determine the relationship's "health."

CLV is a metric that evaluates how much money a client brings in for as long as they are a paying customer. It begins with their first purchase and finishes with their last transaction with you.

Customer Lifetime Value is calculated as below:

  • Calculate the Average Order Value: Begin by calculating the average sale value. Consider using a one- or three-month period as a proxy for the entire year if you haven't been recording this data for long.
  • Calculate the average number of transactions each period using the following formula: Do customers come in numerous times a week, as they might at a coffee shop, or only once every few years, as they might at a car dealership? CLV is heavily influenced by the frequency of visits.
  • How to Track Customer Retention: Finally, you must determine how long the average customer remains loyal to your brand. Some brands, such as technology and automobiles, generate long-term loyalty. Others, such as petrol stations or retail chains, may have a lower level of consumer loyalty.
  • Calculate the Lifetime Value of a Customer: You now have the necessary inputs. To compute CLV, multiply the three integers together using the formula below. CLV = Average Transaction Size x Number Of Transactions x Retention Period

Strategies To Becoming Customer Centric

The customer centricity method focuses on gathering, tracking, and acting on consumer feedback with the ultimate goal of creating products that customers love and value. Beyond that, there's a component of mutual respect and relationship-building that's less talked about but crucial. Customers are encouraged and empowered to provide their honest opinions in customer-centric enterprises, which aims to co-create with them. When firms give customers a figurative seat at the table, they commit to not only considering their feedback but also to providing honest answers about what actions the feedback has spurred.

Evolving with Your Customers

Customer-centricity is a never-ending process. Your service or product will evolve over time if you actually care about the customer. Future trend analysis and post-purchase surveys can assist you to figure out where the market is going and how impending adjustments will affect consumers' purchasing decisions. Even if people aren't providing input, you can still adapt to their evolving tastes. Software firms are successful because they upgrade their products based on usage patterns.

Trend studies and industry research can also be used by non-technical organisations to determine movements in buying patterns. Industry leaders frequently do extensive market research and compile their results into a single complete report. You can be sure to uncover anything about altering consumption trends if you read each page thoroughly.

All of this means that customer-centricity must be ingrained in the DNA of your organization, and it must be a continual process rather than an ad hoc plan.

Be aware of what your customers desire

Knowing what your consumers want is another important criterion for becoming a customer-centric firm. You'll need some qualitative input for this, which will assist you to obtain a better grasp of their psychographics. Here are some methods for gathering qualitative data that you can use:

  • Conduct Customer Feedback Surveys. Businesses can use Voice of Customer (VoC) surveys to collect information via website popups and emails. To learn more about your consumers' expectations and attributions, use a blend of closed and open-ended questions.
  • Plan a gathering. If your business is based in a certain location or neighborhood, hosting an event that allows clients to interact with you is a smart idea. Make certain that it is held in a setting that will appeal to your target audience. You might even come across potential clients who are interested in learning more about what you have to offer.
  • Obtain Information through Social Media. One of the best aspects of social media is the freedom that users have to express themselves. As a result, the majority of the comments they post on company profiles are motivated by their desire to express what they truly believe and feel. This means that just observing their statements, you may learn a lot about their beliefs and habits.

Make The Customer Experience More Personal

A modest addition of tailored messaging could boost your customers' lifetime value or retention rates. Consumers are more likely to buy from a company that remembers their identity, knows their purchase history, and recommends things based on their previous purchases, according to 75% of respondents.

Try segmenting your clients and sending relevant content to tailor your customer experience. Customers can be divided into groups depending on the frequency or volume of their transactions, and then customized communications can be sent to each group.

Examples of Customer Centricity Companies

Customer focus entails more than just providing a good product or staffing a call centre. It gets ingrained in the company's culture and has an impact on everything from staff engagement to customer service. Customer centric businesses exist solely to serve their consumers and are laser-focused on delivering exceptional experiences.

These businesses cause disruption in their industry and are frequently rewarded with higher revenue and growth. Customers who have a positive experience with a brand earn 5.7 times more money than those who don't. Financial gains and strong customer-focused cultures are seen by companies that invest in customer experience. Below are a few customer centric companies.


Jeff Bezos, the creator of Amazon, understands the value of putting customers first. Early on, he said that the company does not profit from product sales. It earns money by assisting clients in making purchasing decisions. This mindset resulted in significant improvements to the Amazon website, the majority of which were intended to assist potential customers in making purchasing decisions.

Reviews, for example, are now shown directly on product pages, providing a more transparent environment for customers. Sellers can be held accountable for the quality of their products because customers are sharing their true feelings with one another.

Customer Centricity / Amazon


Zappos, online clothing and footwear retailer with annual earnings in the billions of dollars, is known for more than just its great products and low pricing. It's also known for its customer-first mentality.

For example, the corporation does not set call time limits for its customer loyalty team. Zappos representatives are urged to stay on the line until the customer's issues are resolved.

If they were focused on the product, they would have set strict call limitations to ensure that every query is answered as promptly as feasible. Zappos, on the other hand, is entirely focused on the customer. The current record for the longest call at the company is 10 hours and 51 minutes!

Hilton Hotels & Resorts

Hilton Worldwide Holdings Inc. has defined the hospitality industry for decades, flourishing as one of the world's most customer centric hotel brands. To collect and analyse consumer data from numerous sources, the organisation employs a variety of customer experience management strategies, including:

  • Use of social media
  • Review sites on the internet
  • Responses from visitors
  • Analysis of bookings

This absorption of data aids Hilton in encouraging clients to book directly through the company's website rather than through third-party travel agencies. The company even produced a campaign called "Stop Clicking Around" that comprised multichannel ads with a direct booking CTA to raise awareness of the possible benefits.


It's time to get started now that you've learned about the components of a customer-centric business . You've already taken a step in the right way if you're working on removing friction from the customer journey and improving the customer experience.

You may need to tweak and modify your approach if you're new to the topic. You'll be able to grow possibilities to promote loyalty and boost your bottom line by keeping your consumers' requirements and preferences in mind while you refine items and execute promotions.


Why Is Customer Centricity Important

Measuring The Benefits Of Customer Centricity

Challenges Faced Getting To Customer Centricity

Strategies To Becoming Customer Centric

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Written by Pinky

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