Think Twice Before Adding Customers to Your Strategy Slides: A Must-Read Guide

It's easy to say that you're customer-centric, but is it truly reflected in your strategy? Recent studies have shown that companies that prioritize the customer experience see better performance. So why do so many organizations fail to effectively implement a customer-centric approach in their strategy? Before you add "customer-centric" to your strategy slides, make sure you're taking the necessary steps to truly put the customer at the forefront of your decisions.

Are we truly customer-centric or just navel-gazing?

Many organizations claim to be customer-centric, but do they truly understand what that means? There are distinct differences between those who truly prioritize the customer and those who simply pay lip service to the idea.

• Difference #1: True customer-centric organizations have a clear and defined strategy for customer-centricity, with specific goals and targets for improvement. Navel-gazers, on the other hand, simply include the customer on their strategy slides without any real direction or ambition for change.

• Difference #2: True customer-centric organizations allocate the necessary resources for gathering and utilizing customer understanding and building capabilities for data-based customer behavior tracking. Navel-gazers, however, rely on gut-feelings and operate without any real conceptualization, design or validation with customers.

• Difference #3: True customer-centric organizations have a strategy that guides and unites the entire organization, with each team working towards a common goal. Navel-gazers, on the other hand, have each team operating independently, resulting in confusion and lack of direction.

• Difference #4: True customer-centric organizations focus on long-term value creation, while navel-gazers focus solely on short-term value capture, often at the expense of the customer experience. This leads to a cycle of bribing customers to buy a sub-par product or service, ultimately resulting in a negative impact on the company's reputation.

• Difference #5: Management prioritizes internal goals over the needs and wants of customers. Discussions about customers and decisions that affect them are not considered in management meetings.

• Difference #6: Customer journey is not a concept that is considered or implemented. The organization operates solely based on its own perspective and goals, and the customer is an afterthought. Internal processes are also not designed with the customer in mind.

  Difference #7: Belly button gazers divide their organization into separate functions, with each guarding their own territory fiercely. There is little collaboration or communication between departments and no focus on the overall customer experience. This results in a siloed approach, where each department prioritizes its own success over the success of the organization as a whole.

Customer value creation

Customer-centricity is a business philosophy where the customer is at the forefront of all decision making. This approach prioritizes the understanding and addressing of customer needs, wants and desires in order to create value for them. From strategy to operations, everything is designed with the customer in mind. This requires a deep understanding of who the customers are, their pain points and what solutions will best serve them. By focusing on a select group of customers and providing tailored solutions, customer-centric organizations are able to create a unique and differentiated experience that sets them apart from their competitors.

Stages in the customer value creation

• Value creation: Creating value for customers is a crucial aspect of any successful business. To achieve this, it's important to identify who your customers are, what problems they face, and how you can address those problems with your offerings. Customer-centric organizations put in the effort to understand not only their market and competition, but also their customers. They make strategic decisions about what to focus on and what not to, knowing that trying to do everything for everyone leads to a bland and unappealing result.

  By choosing the right customer segments to focus on, these organizations can better serve their customers and deliver products and services that meet their needs. This requires an ongoing effort to gather feedback and insights from customers, and to maintain strong relationships with them. By prioritizing the customer experience and consistently delivering value, customer-centric organizations can build lasting relationships that benefit both the customer and the business.

• Value delivery: Customer-centric organizations understand the need for a holistic and lateral approach to creating and delivering value to customers. This includes conceptualizing strategic focus areas to understand the big picture and guiding resource allocation. Every decision and action is aligned with the strategic focus areas, creating value for the customer together as a team.

  These organizations have a clear understanding of how to deliver value and measure it using both business and customer experience metrics. They track and follow-up on progress and make necessary adjustments to ensure they are on the right track. They also have a culture of experimentation and testing.

  Customer journeys are at the forefront of their thinking and processes are built around these journeys to optimize value creation. Each employee understands their role in creating a positive customer experience and is dedicated to value creation through their work. Technology is used as an enabler for the customer journey, behavior is tracked and customer feedback is collected and used to make data-driven decisions.

  The customer is a priority for everyone in the organization, and all employees have access to customer understanding and research. They also have opportunities to participate in customer-facing activities such as customer service or research. Management also includes customer-related items on their agenda and actively engages with customers through regular meetings.’

• Value capture: In a customer-centric approach, the focus is on creating long-term customer satisfaction and loyalty, which leads to repeat business and positive word-of-mouth promotion. By putting the customer at the center of everything, products and services are tailored to meet their specific needs and problems, resulting in high levels of customer satisfaction. This approach also leads to cost savings by eliminating non-value-adding activities and identifying new business opportunities through customer research. The management of customer-centric organizations is also focused on key business metrics beyond just sales, such as customer lifetime value and customer retention rates, to ensure long-term success.

Embrace the change

Before implementing a customer-centric strategy, it's important to understand the true meaning and implications of such a business approach. It is not just a buzzword or a marketing strategy, it involves a complete organizational shift in thinking and action. The change affects every aspect of the company, from strategy and structure to processes and management. Are you ready to embrace this change and be open to learning new ways of thinking and doing things? Keep in mind, the business landscape is constantly evolving and companies that are able to adapt to change are more likely to thrive in the long run. A customer-centric approach is essential for future-proofing your organization. Keep in mind that transformation does not happen overnight, it requires a long-term and systematic approach. Embrace the change and see the opportunities it presents.