Customer centricity is the most often heard CRM buzzword these days and almost every other CRM concept, ranging from customer engagement to customer experience management (CEM) to customer profitability and customer value, is linked to it.
What is customer centricity? Do all advanced and sophisticated efforts to acquire and retain customers qualify to be called customer-centric initiatives? Is it limited just to the boardrooms and the CXOs to elucidate in conferences? What does it take for the organization to really become customer centric?
Customer centricity is still an emerging concept for most organizations where revenues, profitability, and growth determine all strategic decisions. A genuine focus on the customer and prioritizing customer value in all decisions and functions will make an organization a formidable force in the marketplace in this social economy.
Customer centricity cannot be restricted to only sales, marketing, and service, but need to percolate down to manufacturing, product design, costing, and supply chain functions for an organization to be profitable and successful in the marketplace.
The following myths need to be busted for an organization to be truly customer centric:
- Customer centricity is relevant only for the service industry
- Customer centricity is a responsibility of the front office.
- Customer centricity is conceptualized and strategized only by CXOs of the organization.
- Customer centricity is attainable with the existing organization structure, processes, and systems.
- Higher customer satisfaction scores imply a customer-centric organization.
CUSTOMER CENTRIC ORGANISATION: VALUE CHAIN
As with any other strategic initiative, inducing "customer centricity" across the entire organization would need a paradigm shift in the mind-set of all stakeholders involved in both internal and customer-facing activities:
Inbound logistics: A customer-centric organization needs to prioritize quality and cost to customer in every activity of inbound logistics -- inclusive of transportation, warehousing, and distribution -- that has a significant influence on customer satisfaction and experience. An agile and prudent inbound logistics system highly influences repeat purchase behavior. Customers are delighted most often with the quick, trackable, and reliable delivery of goods and services, as in the case of Amazon.com.
Operations: Operations are the lifeline of most organizations and more so for organizations like airlines, freight carriers, or telecom providers that have high-volume, customer touchpoints. One wrong delivery, one delayed or cancelled flight, and one irate call center agent/flight-attendant is sufficient to erode significant brand image - thanks to the ubiquitous social media that provides customers the power to provide both bouquets or brickbats at a lightning speed with huge impact.
Outbound logistics: In the era of e-commerce the quality, speed, and reliability of logistics is important. Apart from looking for viable and cost-effective means to deliver goods and services to customers, organizations now are more compelled than ever to take a closer look at the condition in which goods arrive and are required to innovate ways for customer to receive goods and services as soon as they can and in the best manner possible. This requires empowering the partners in the distribution chain to be well-equipped to deliver products in good condition.
Marketing and sales: The primary challenge in organizations that are not customer centric is that the sales and marketing functions have conflicting goals. The secret of a customer-centric organization lies in its ability to accurately predict and meet the customer's articulated and unarticulated needs based on deep relationships and customer behavior analysis. A customer-centric organization launches effective campaigns to well-segmented targets with personalized message. Later, the prospects are pursued with suitable product recommendations and attractive value-based pricing. If required, the organization should be agile to create new solution to customer's varying needs than selling old wine in a new bottle.
Service: A well-trained, effective, and genuine customer-centered service agent is indispensible to the customer-centric company. Organizations often invest heavily in training customer service agents and performance metrics are usually focused on minimizing call center operations costs such as response time, number of calls handled, and the like, instead of the effectiveness of calls. The success of the service team lies in creating a delighted and loyal customer. Airlines, for example, could empower agents to compensate for canceled flights through a paid-for trip that the passenger can enjoy with family.
Procurement: Although considered as a support activity, procurement does influence customer experience as the quality of the end product is only as good as the equipment that manufactures it. Similarly, in the service industry, the quality of the output is determined by the process followed from raw material to finished good/final delivered service. A constant proactive understanding of customer needs and mapping it to the new product configurations available in the market that can precisely deliver the customer needs should be the motto of a customer-centric procurement team.
Technology: A customer-centric organization ensures that technology is leveraged to create convenience, exclusivity, and superior experience to its customers. Personalized product recommendations, convenience of ordering online and delivery at an offline store, mobile banking, and presence on the social web to promptly respond to customer queries, complaints, and feedback are just some of the successful strategies used by customer-centric organizations to increase brand loyalty and sales revenues.
Human resource management: Customer-centric organizations require people passionate about customers and who proactively put themselves in customers' shoes to innovate what the customer need. Recognizing, motivating, and incentivizing the workforce across the value chain is at the core of the customer-centric organization.
Firm infrastructure: The organization structure, control mechanisms, and culture have a very strong influence over the success of the organization. The same holds true for a customer-centric organization, which has to have an infrastructure that promotes a flat structure with incentive and reward mechanisms to foster customer centricity. Forming dynamic, flexible teams from members across functions and units is key. The organization needs to realign itself to how the customer perceives and communicates his need and the offerings from the organization.
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