Sometimes you might have to choose which part of your business to dedicate the biggest part of your investments. Should it be in development and try to create an even better product? Or should it be the improvement of the customer experience? There is no right answer that is true for everyone. However, suppose you already have a good product. In that case, it is good to build a business case for customer-centric investment to show your investors and colleagues that this is an area that shouldn't be neglected.
What is customer-centricity?
The definition of customer-centricity is that this is an ecosystem and operating model that enables an organization to design a unique and distinctive customer experience. And this means that your main goal is to improve the customer experience at every step of the customer journey. You will find the best way to attract users, nurture them, convert them, and keep them loyal to your brand.
Becoming a customer-centric organization doesn't happen overnight. It takes time and effort, but it is something that will pay off. Customer-centric companies have, in general, increased lifetime value and better churn rates than others. This is because they anticipate customers' behavior and answer their needs. The relationship between the customer and the brand is the center of everything, and the customer leads the way.
Below you can see at a glance some of the main benefits of being a customer-centric organization:
- Customers will prefer you instead of a competitor;
- Customer loyalty will be significantly improved;
- Customers are willing to spend more on your products and services;
- Customers will return more often to you;
- Customers will recommend you to others;
- Customers will appreciate your brand and rarely cause any trouble;
- Customers will be more understanding in case of temporary issues and many more benefits.
The business case for customer-centric investments
When you decide to start building a business case for transforming your organization into a customer-centric with the help of more investments, you will have to consider many things. The end goal is clear — building a positive long-term relationship with your clients and, by that increasing your business KPIs. But you will have to convince your investors that the goal is worth it.
What are the challenges?
Like any new initiative, this one has some challenges. Customers are now taking more time to choose between different brands, and the experience you are providing is the main factor in their decision. They expect to be treated as individuals, get what they want at a reasonable price, be supported before and after a purchase, and be reminded that they are important to you. They want a real relationship with the brand they will choose.
It isn't easy to achieve this because so many aspects have changed compared to a couple of years ago that putting you as a business is not easy. For example — social media. This is now the place where customers interact with brands and other customers regularly on a daily basis. Everything that you do might end up on social media, which is why you can't afford any mistakes.
Another challenge is the change in workflows that will need to happen in your company. In many cases, the customer is handled by different teams depending on where they are in their customer journey. But this will have to change because the whole customer experience should become seamless, and the customer should be in the center. Everything you do from now on will have to be with the focus on what your clients need and how they want it. Your revenue will have to be your secondary concern, but rest assured that your bottom line won't take a blow if you adopt customer-centricity right.
Best practices to becoming a customer-centric company
The main idea behind customer-centricity is to make your customers fall in love with your brand and prefer it in front of any other. But in your business case for customer-centric investments, you will have to explain how you plan to achieve that. Here are a couple of best practices that will help you with the transformation and that you need to add as steps in your business case:
- Put the customer-brand relationship first — For you, customers are no longer just numbers. They are real people that you need to understand. They are individuals with their wishes and needs. Your goal is to understand them and offer them the perfect product in an ideal way.
- Adopt a CRM — A customer relationship management (CRM) system is something you will definitely need. Being a customer-centric company means you will need a lot of customer data stored in one place. This is why the right CRM will help you centralize the data and analyze it easier to make valuable conclusions about what your clients need.
- Build a customer success team — Customers like to have a relationship with brands, and you will need someone to maintain this. The people in your customer success team will be on the front line, and they will represent you. So, try to hire people that know how important customers are and how to communicate with them.
These are just 3 things among the big list of steps you will have to take to become a customer-centric organization, but there are probably the most important. They will help you change your way of thinking, have the means to collect and analyze data about your customers, and also maintain a good relationship with them.
How to measure success?
The success of your investment in customer-centricity can be easily measured based on 3 KPIs:
- Lower churn rate — Getting new customers is the main task for each company, but keeping existing ones is even more critical. At some point, the speed with which you acquire new people will decrease, but what will happen if your churn rate remains high? Customer centricity is here to help with that. By proactively answering customer needs and wishes, you will make sure to do your best to keep them as regulars. Therefore, your churn rate will decrease since people won't leave you as quickly as before.
- Improved customer lifetime value — If customers are sticking longer with you is only logical that their lifetime value (CLV) will increase. Building a long-term relationship with clients will mean that they will be coming back to you whenever they need something you offer instead of looking for alternatives.
- Better net promoter score — To measure the happiness of your clients, you can use the net promoter score (NPS). You have probably seen that little pop-out that asks you to rate your experience. This is how NPS is calculated, and the notes are as follows:
- Detractors from 0 to 6 — People that are not so happy and will most likely complain about it in front of other people or on social media;
- Passives from 7 to 8 — People who like your services but are not loyal to you as a brand.
- Promoters from 9 to 10 — People already in love with your brand will most likely stick with it and actively promote it.
If those three KPIs are improving, it will mean that you did things right and your strategy to become a customer-centric organization worked.
Is customer centricity worth it?
The short answer is — yes! Customer centricity will improve your KPIs and, therefore, your bottom line. The change won't be easy, and it will require a lot of work and investment, but it will be worth it. You will be able to unlock the full potential of your customer-brand relationship and make sure that you are doing the best for your clients. They will appreciate that and remain your loyal customers for a long time.
