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Episode 33: The craft of customer-centricity

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Listen to this episode from CIM Marketing Podcast on Spotify. It's not easy to put the customer at the heart of your organisation, much less to convince senior leaders why it's so important to do so.

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- vogue business
- business of fashion

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https://www.informatica.com/blogs/what-is-customer-centricity-and-why-is-it-important.html

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What is customer centricity?

Customer-centricity means putting the customer first and at the center of everything that you do. You might think to yourself, that's easy. I can do that. But is it really that simple?

Being customer-centric entails more than just saying the customer is top of mind. It is about truly understanding the customer, so you can anticipate their wants, needs and communication preferences, create meaningful experiences, and build lasting relationships with them. And that is easier said than done.

Customer-centric organizations take steps to understand the customer and act on that understanding by creating a culture that empowers employees to make the best decisions for both the customer and the company in parallel. They take into account how each business decision, process change, and customer touchpoint affect the experience.

All in all, customer-centricity is as much a strategy as a culture. It has to be ingrained in an organization in order to be recognized by the final decision maker: the customer. Successful organizations realize higher retention rates, more referrals, price premiums, and ultimately greater revenue.

Why is customer-centricity important to your business and brand?

If customers aren't happy, they won't stay with your brand. If you don't have customers, you don't have a business.

Consider your own experiences interacting with your favorite brands. They make it easy to do business with them, they communicate with you via your preferred method, and they may even present offers at the exact time you plan to purchase. Now consider the ones that get it wrong. In the Marie Kondo era of cleaning out, tidying up, and simplifying, how often do you stick with brands that fail to spark joy? Consumers today have an easy path to walk away from brands they love, and they are not afraid to do so. In fact, according PWC, one in three customers will leave a brand they love, after one bad experience.

Across the customer journey, from awareness to purchase to advocacy, each interaction and stage benefits from a customer-centric approach. In today's digital environment which focuses on personalization, organizations are being built on their commitment to do what's right for their customers. It is the definitive competitive differentiator.

For example, Nordstrom has always been synonymous with exceptional customer service. In order to pivot with buyers' demands, they have taken the in-store experience they are known for and replicated it in the digital shopping experience with an innovative mobile app as well as new services such as buy online/pickup in store.

The ultimate reward of creating customer-centric processes is loyalty and retention. As the old saying goes, it is easier and more cost-effective to keep a customer than acquire a new one. In 2014, Harvard Business Review underscored the fact that acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. This concept is not new. So why aren't more companies prioritizing retention over acquisition?

Customer-centricity done right results in your customers trusting they will not only get what they want and need from your company, but will also experience enjoyable and frictionless service, including: boxless returns, order online/pickup in store, immediate refunds, fast delivery of online orders (sometimes same-day or even 2-hour). These experiences delight and build trust that helps to retain customers for the long haul.

3 common challenges businesses face getting to customer-centricity

It's important enough to repeat: Being a customer-centric organization is easier said than done.

What sounds like a simple concept in theory presents challenges in reality. Everything from culture to organizational structure to data and technology within an organization need to be reoriented around the customer - from the back office to the front line - to fully recognize the benefits.
Customer-centricity challenge 1: Getting buy-in and building a culture
The most difficult challenges to overcome are the least tangible. Creating a customer-centric culture is a good example of that. Culture is not something that is forced or easily changed. It doesn't necessarily translate directly from plan to action. It requires everyone from executives on down to embrace the change that customer-centricity brings. Everyone has to want to believe, execute and succeed. At times, it may require taking a leap of faith (albeit a guided leap) centered on a longer-term vision and focusing on more than just the bottom line.

What's the one thing customer-centric organizations have in common? Customer-centricity is a core value. Every employee is focused on the customer and puts the customer first in their thinking and decision-making. For example, at Informatica, we are guided by our " We DATA " values of which one of them is "Think Customer First." It is called out at every all-company meeting, woven into annual performance reviews, and celebrated through recognition of employees who embody the value. Empowering employees to think about what's right and do the right things puts the customer front and center.

One way to create a culture that values customer-centricity is to encourage teams to answer questions to determine if a decision is customer-centric or not:

How will this new product introduction benefit the customer?

How will this new back-office system create an easier, more intelligent way to interact with the customer?

How will this new process remove unnecessary friction experienced by our customers?

If the answer to any of these questions is no or inadequately defined, you may want to rethink your decision. When employees are empowered to think in this way and challenge any decision that is not customer-centric, good things will happen. When employees feel supported and empowered, they go above and beyond for the customers they serve, resulting in high satisfaction and stronger relationships.
Customer-centricity challenge 2: Shifting from product-centric to customer-centric
In his book, Customer Centricity, Wharton School of Business professor Peter Fader gives examples of how brands like Starbucks and Nordstrom successfully pivoted from product- to customer-centric models over the past decade. This shift is due to a change in customer behavior, better access to information, and the ability to scale understanding of and delivery on customer wants and needs. The precision gained with better insights replaces the need to cast a wide net in hopes of getting a bite.

A shift from product-centricity to customer-centricity applies to both consumer and non-consumer-based industries. Think of your bank or insurance agency. In the past, you would have an account number for each account owned, interacting with different representatives for each one. This product-centric approach didn't stop there. Systems recognized a customer by account or policy number, not by name. Processes and experiences were siloed and choppy as a result. You'd often need to share your information multiple times or receive offers for products you already own.

The inefficiencies and poor customer experiences were a result of traditional organizational structures based on the products they sold. Many businesses focused on selling as many products to as many people or organizations as they possibly could. This strategy is 100% product-centric and doesn't take into account customer preferences. In marketing, it results in "spray and pray" campaign strategies where product-focused messages are blasted out to anyone and everyone.

This approach wastes valuable time, money and mindshare because the message most likely misses the target the majority of the time. In addition, a product-centric business model creates silos of teams and silos of data - often resulting in misaligned or competing goals as well as duplicate, inconsistent, and fragmented information across an organization.

Creating strategies and processes focused on customer over product is a critical step in overcoming challenges around customer-centricity.
Customer-centricity challenge 3: Overcoming data silos and technology
Digital transformation means a successful data management strategy to support customer-centricity is even more important. As customers flock to the growing number of digital channels, interactions with your brand have potentially increased in frequency. Consumers and business buyers alike are making purchase decisions prior to engaging with a salesperson due to the availability of information.

Web chats, online product reviews, and social media create additional channels for customers to learn about and experience brands. And for brands to learn about and understand their customers if they manage the data correctly. With more channels at play and more applications in the mix, technology must be an enabler, not a detraction.

Data is often the biggest challenge when it comes to knowing who your customers are and understanding what they want. In many companies, data is unorganized, siloed, duplicated and, frankly, a mess. This may be due to how a company has grown over time, for example through merger or acquisition, where multiple sets of customer data exist, but have not been unified. It may also be because systems are set up by business unit, product, or department, creating silos and duplicates.

No matter how messy it is, data holds the key to understanding your customers, anticipating their wants and needs, and interacting with them in an authentic, relevant manner. It can help marketers, sellers and customer service reps personalize communications and empathize with the customer.

Breaking down silos and getting control of data - centralizing it, cleaning it, enriching it, governing it - and making it actionable go a long way in delivering customer-centricity. And it doesn't stop with customer data. Customer experience involves product, finance, supplier, employee, and other data, including attributes inferred from social media, chats, and other unstructured data sources. Making the data challenge both more difficult and more rewarding when done right.

How to overcome the barriers to customer-centricity

The first step to becoming customer-centric is getting everyone on board - leadership, marketing, sales, service, support, finance - encompassing both customer-facing as well as back-office roles.

All teams need to recognize the impact of first impressions during the awareness and consideration phases. When customers are at the beginning of their journey, it's critical to ensure marketing hits the mark and doesn't alienate customers. You may not have all the data you need right from the start. But, over time, as data is added and connected with the customer's profile, it guides future decisions and helps build hyper-targeted and more personalized campaigns.

As their journey continues and prospects become customers, customer-centric processes must be in place for a smooth and frictionless onboarding process. Conversations and outreach to customers must add ongoing value to ensure repeat business and loyalty - not to mention brand advocacy.

Here are some customer-centric best practices to help you achieve your vision:

Build a customer-centric culture. Ensureevery employee, from the CEO to the frontline worker, lives and breathes the customer. Build it into your mission, values, and vision.

Improve your data. Improve data quality, consistency and availability to help everyone in the organization identify and understand the customer at every stage of the journey. Too often, data is an underutilized asset because of the erosion of quality and the difficulty using it. With AI, data can be automatically connected to resolve identities and reveal insights that improve personalization and next best offer initiatives.

Capture customer feedback. Gain a better understanding of your customers by really listening to what they want and need. Look for patterns in the feedback. Not every customer is always right, but it pays to listen to many customers who provide the same feedback - whether explicitly stated or expressed by their behavior.

Reward employees. Tie employee compensation, recognition and reward structures directly to meeting the needs of the customer. Build trust within your employee base and empower them to think customer first.

Think long-term. A long-lasting customer is more valuable over time than a single transaction. By creating frictional experiences, having empathy and making a customer feel known, those long-term relationships with your customers will result in loyalty and retention - and ultimately greater revenue. This is truly where CX has an impact on the bottom line.

Measuring the benefits of customer-centricity

Another key step to building a customer-centric strategy and culture is agreeing on the key performance indicators (KPIs) and metrics that you will measure to determine what is working and what needs to be tweaked to ensure success.

What gets measured gets managed. Using customer metrics such as retention rate, propensity to churn, customer satisfaction (CSAT), customer effort score (CES), and wallet share will keep your efforts on track. Customer-centric marketing, sales and service efforts must align with measurable KPIs. In addition to tracking metrics such as revenue by product or channel, you must also capture and measure customer behavior, sentiment, value and other important customer-centric metrics.

For example, most chief marketing officers are laser-focused on increasing customer lifetime value (CLV), which measures the value of a customer over the entire relationship. It is a critical indicator of how well marketing and other tactics are working to establish long-term, highly profitable customer relationships. By tracking CLV, you can spot early signs that a customer might churn, for example if spending subsides below what is typical for that customer. You can also use CLV data to perform customer segmentation for targeted promotions and other offers.

Another key metric is Net Promoter Score (NPS). NPS is widely used, especially by consumer-facing brands and simply asks: "How likely is it that you would recommend [brand] to a friend or colleague?" It is a common predictor of growth and measures overall perception of the brand. Complement NPS with additional metrics and insights to derive actionable insights that will improve customer experience.

Go forth and be customer-centric

People buy from people they trust. And people do business with a company, not departments within a company. This is why customer-centricity must be promoted at the executive level across an organization. The payoff for customer-centric organizations is that loyal customers spend more over time. They are also more forgiving of minor trespasses (a poorly timed offer, an out-of-stock item, a wrong item delivered) because there is a sense of trust that the organization will take care of the customer in the long run. But betray that trust on the bigger items without quick resolution, and you risk losing that customer forever.

Retaining customers and growing wallet share requires having the right culture, data and technology that drive customer-centric sales, marketing, and customer service. The foundation for a successful customer-centric business practice requires technologies that streamline processes and reduce the cost of data management and makes trustworthy data accessible across your enterprise.

By creating a customer-centric strategy, your organization will have the right information at the right time to stay ahead of your competition, manage healthy customer relationships and maximize value for your stakeholders.

Want to learn more? Download A Marketer's Guide to Customer Experience ebook to get actionable CX tips and guidance on long-term strategies now.

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What Is Customer Centricity and Why Is It Important

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Customer-centricity means putting the customer first and at the center of everything that you do. You might think to yourself, that's easy. I can do that. But is it really that simple? Being customer-centric entails more than just saying the customer is top of mind.

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videos
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- allows customers to get up products on their phone to move around their room via any device.
- helps reduce return costs
- makes shopping experience easier
- personalised to each customer

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pros
- increase brand loyalty
- strong relationships
- make customers feel valued

cons
- each customer is different \
- brands drift away from other factors. eg improving products

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- why AR is good
- the future of technology
- is it negative or positive?

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take photos of my vogue magazine visual magazine articles 

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take photos of my vogue magazine visual magazine articles 

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write about how they adopt this in their business
- augmented reality (Ikea place app)

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https://www.bluefountainmedia.com/blog/ikea-place-is-revolutionizing-retail-through-augmented-reality

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Augmented Reality may seem like it's all fun and games, but IKEA's new AR app, IKEA Place, is proving that this technology has practical business applications as well. IKEA Place was launched in September 2017 with the release of iOS 11. The app was built on Apple's ARKit, a framework that allows developers to create augmented reality apps for iPhone and iPad. ARKit will play a critical role in ushering in the era of AR by introducing the technology to millions of iOS users. Although many of the top ARKit apps that have been downloaded so far are games, IKEA Place, which exists to make shopping with the brand easier and more foolproof than ever before, is proving popular with users as well. With IKEA Place users can see how IKEA products will look in their homes before they actually go to the trouble to purchase and assemble the products. The app is easy to use - simply choose from over 2,000 IKEA products and hold up your device to see how the product will look in the space. Images are rendered in 3D and, according to IKEA, scale to space with 98% accuracy, so users can feel confident using the app to determine if a product will fit within the dimensions of a given space. Textures of products are also visible and respond to light and shade conditions within a space. The AR applications that get the most attention are usually the ones designed mostly for entertainment value. Think of Pokemon Go, Snapchat Lenses, and other AR games that spark interest by entertaining users. But even though IKEA's application of AR technology might seem relatively mundane at first glance, it's actually a sophisticated and genuinely useful consumer tool which has major implications for the future of retail. The IKEA Place app demonstrates 3 key benefits available to retailers who invest in developing AR experiences for their consumers.

1 - AR helps close the omnichannel gap

These days, virtually every business is looking for ways to make their marketing approach a more omnichannel one. Unifying consumer experience across digital and traditional channels, and finding ways to link one to the other, is a major challenge. Augmented reality apps are part of the solution. In the case of IKEA Place, AR places the brand's products in the consumer's home. It's a blending of the digital world and the real one, and it makes IKEA incredibly relevant on mobile. The mobile app drives users both to brick-and-mortar IKEA stores and to the website where many products can be purchased online.

2 - AR can improve the in-store experience

Shopping at IKEA is notoriously stressful, so much so that people often joke that going on an IKEA shopping trip as a couple can make or break the relationship. The reason the experience can be so fraught is that IKEA carries a huge inventory of products, and knowing which ones will look and fit best in a space is a challenge for shoppers. Taking a product home if you aren't sure it will look right is a risk because returning a sofa or a bed frame is a task few people relish. Not to mention that buying a piece of furniture you'll have to live with for years to come is actually a pretty high stakes endeavor for most shoppers. IKEA Place improves the in-store experience by helping users narrow down their shopping lists from the comfort and convenience of their own home. Users can then go into the store armed with a list of product options that they know will fit in their homes, making the final decision a matter of choosing between a handful of vetted options, as opposed to hundreds of untested ones. IKEA Place can help get users in and out of the store faster and with greater levels of satisfaction with the shopping experience.

3 - AR boosts e-commerce sales

Buying furniture and home decor online is, in many ways, far riskier for consumers than buying nearly any other product. For one thing, products are usually large and shipping is very rarely free, which means customers can pay high shipping fees for products they're not even sure will look good in their homes. Size and color can be particularly challenging to assess when shopping online, and these happen to be the two most important attributes of a furniture purchase. AR can help boost e-commerce by breaking down barriers to purchase. It answers customer questions about how things might look in real life, reducing uncertainties and making them more likely to complete a purchase. It's especially useful for big-ticket items that cost a lot to ship and may be difficult to return.

Where Is AR Headed?

Augmented reality has many potential applications in the retail sector. It's already being used by beauty retailers like Sephora and L'Oreal to allow users to see how different products will look on them. It can be used to create virtual fitting rooms, where users can see how clothes and accessories will look before they place an online order. It's even relevant in store, where it can demonstrate use cases for packaged products. Retailers looking to provide value to consumers would be wise to follow in IKEA's footsteps. AR is more accessible than ever, and as consumers become more accustomed to seeing it integrated into the apps they use, we can expect the demand for the technology to grow.

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IKEA Place Is Revolutionizing Retail Through Augmented Reality | Blue Fountain Media

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Augmented Reality may seem like it's all fun and games, but IKEA's new AR app, IKEA Place, is proving that this technology has practical business applications as well. IKEA Place was launched in September 2017 with the release of iOS 11.

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Blue Fountain Media. 2022. IKEA Place Is Revolutionizing Retail Through Augmented Reality | Blue Fountain Media. [online] Available at: <https://www.bluefountainmedia.com/blog/ikea-place-is-revolutionizing-retail-through-augmented-reality> [Accessed 11 July 2022].

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Ikea.com. 2022. The IKEA vision, values and business idea. [online] Available at: <https://www.ikea.com/gb/en/this-is-ikea/about-us/the-ikea-vision-and-values-pub9aa779d0> [Accessed 11 July 2022].

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Mullen, M., 2022. What Is Customer Centricity and Why Is It Important | Informatica. [online] Informatica.com. Available at: <https://www.informatica.com/blogs/what-is-customer-centricity-and-why-is-it-important.html> [Accessed 11 July 2022].

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Pitman, J., 2022. Local Consumer Review Survey 2022: Customer Reviews and Behavior. [online] BrightLocal. Available at: <https://www.brightlocal.com/research/local-consumer-review-survey/#> [Accessed 14 July 2022].

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Retail.globaldata.com. 2022. GlobalData Login. [online] Available at: <https://retail.globaldata.com/PollsAndSurveys/GetSurveysQuestionById/146599?surveyid=286> [Accessed 11 July 2022].

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R. Sandeep, C., 2022. How Augmented Reality Can — and Can’t — Help Your Brand. [online] Harvard Business Review. Available at: <https://hbr.org/2022/03/how-augmented-reality-can-and-cant-help-your-brand> [Accessed 11 July 2022].

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https://www.forbes.com/sites/blakemorgan/2021/04/05/what-does-it-mean-to-be-customer-centric-in-2021/?sh=7d0194cd6364

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What Does It Mean To Be Customer-Centric In 2021?

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Customer experience is continually evolving as technology and customer demands change. Just because a company was once customer-centric doesn’t mean it still is in 2021. What does it mean to be customer-centric in 2021? Consider these six factors of customer-centric companies.

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putting the customer at the centre of everything you do - constantly providing a good service
customers wants, needs and communication preferences.

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how brands adopt it
the pros and cons
what customer centricity is

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YouTube, 2022. say Hej to Ikea place. [image] Available at: <https://www.youtube.com/watch?v=UudV1VdFtuQ> [Accessed 11 July 2022].

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how customer centricity could potentially impact on the future of fashion retail landscape and environment going forward.

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brands that show good customer centricity 

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brands that show good customer centricity 

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starbucks
in the style
amazon
patagonia