A customer-centric company has been shown to be highly efficient in several ways. It also has been shown to provide an unmatched competitive advantage. Customer centricity enables an organization to outperform its peers in the long-term regardless of if they have a longer history in the industry and more access to resources. Recent research from Deloitte suggests businesses centered on providing the best client experience can be 60% more profitable.
So what is the secret sauce that gives a customer-centric company the upper hand? It boils down to the fact businesses driven by bringing value to their customers will invest the needed resources, time, emphasis, and energy into customer research. In other words, these modern customer-centric companies are listening to their customers more intently and are giving them a voice in executive decisions.
This results in two high-impact benefits: Customer loyalty and customer advocacy.
The Stickiest Experience
Customer loyalty is a powerful element in a thriving business. It means that the lifetime value of your customers is optimized, giving your company a long-term dependable stream of revenue and a foot in the door for greater sales. A recent report found that 52 percent of customers went out of their way to buy from brands they’re loyal to.
Enhanced solutions, smoother services, and sharpened remediation make for the stickiest customer experience. These all produce positive customer satisfaction ratings and reduced friction and churn. All of these effectively plug up holes where revenues are leaking. Loyalty means that when you invest in customer acquisition the returns on investment are stretched to their longest form. Keeping customers will always be more cost-efficient than consistently finding new ones.
Customer-Focused Products Are Better
Companies that prioritize their customers will value research that provides insights into their desires, preferences, problems, and practices. This gives them advantages in product development by creating high-value products and saving time and money while doing so.
- Building new solutions and features.
- Rolling out improvements.
- Removing problems.
Build new features – Being customer-centric allows product development to avoid the pitfalls of building solutions that are not solving real-world problems and products that are not desirable for your target audience. This can be accomplished through conducting customer surveys and even observing your audience using competitor products.
Roll out improvements – Customer-driven teams don’t stop listening to their audience after something is built. They will continue to solicit feedback during the life of the product to see if the consumer’s benefit from the product lasts over time. Ongoing research allows product teams to watch for unexpected factors and quickly remediate them.
Remove problems – Sometimes removing features or canceling products is just as important as adding new ones. Even if your solution was created based strictly on customer research at one time, that does not mean it will be viable over time. Your customers are changing and adapting constantly, making successful product development is like hitting a moving target. Being informed enough to know when to pull back gives customer-focused companies a strategic advantage.
Services Are Smoother
While solutions are definitely the meat of a customer’s relationship with your company, service-oriented interactions are just as vital. Friction and clashes during a customer’s engagements with your teams and representatives can make or break your relationship. Research has found that 61 percent of customers will turn to a competitor after one bad experience. That increases to 76 percent after the second one.
These numbers should emphasize the importance of investing in employee development to provide the right training and resources for them to do their jobs efficiently and to treat customers well while they do it. It’s unlikely that you can make every customer happy, but the least you should expect is that they feel respected and valued after every interaction.
One of the competitive advantages of customer-centricity models is the creation of user evangelists who vouch for your company to their peers and personal connections. A customer who becomes an advocate generates a compounding profit base. Not only is it essentially marketing without overhead, but it’s also one of the most effective and persuasive forms of acquisition for customers when they go to make spending decisions. According to one study, 83% of consumers make decisions based on word-of-mouth referrals.
Customer-Centric Companies Are Competitive
So why are companies with customer-centric models consistently outperforming their counterparts, even some of them which have larger marketing budgets and cheaper price points? Because there are inherent competitive business advantages in focusing on customers rather than profits or shareholders.
Companies latch on to these advantages primarily by listening to customers through the conducting of ongoing UX research. Tetra Insights is the leading qualitative research platform for moderated interview analysis, reporting, and organization-wide access, making listening to customers easier than ever before.