Paul Holland has over 25 years’ experience in establishing & managing successful international businesses in the Executive Search, Sports Marketing and Investment sectors. Commencing in financial services, Paul progressed to a senior management...
What have e-commerce clothing retailer Zappos and low-cost US carrier Southwest Airlines got in common? Both are financially successful; both have created a company culture that brings competitive advantage. Importantly, both are known for their dedication to customer centricity.
While Zappos doesn’t have the cheapest or the most innovative products, customers choose the company knowing that Zappos employees will look after them if something goes awry with their order.
Conversely, Southwest Airlines pioneered what it called “simply flying”, the low-cost carrier model has become a popular American airline by focusing on low operating costs, hiring employees that fit the corporate culture, and has created a flexible customer approach.
In short, customer centricity is not merely a consideration in either company. It’s a core operating principle.
The concept customer-centric organization or customer centricity was born in 1954 when Peter Drucker (1909-2005), one of the most widely known and influential thinkers on management, said: “It is the customer who determines what a business is, what it produces, and whether it will prosper.”
Many marketers still use Drucker’s logic today, and successful business have found that the core of consumer centricity is customer empowerment, providing the information and the tools customers need to make their decision to buy.
The rise of social media platforms and online reviews brought an unprecedented level of influence and transparency for companies and those that use them. Customers are now more inclined to research who they use before making service or purchasing decisions, and companies know they share their experiences especially online with vast audiences.
Smart companies use social media interactions to build loyalty through transparency and speedy engagement where a customer has questions or complaints. These platforms enable individuals to drive the kind of experience they want to have with a brand, knowing digital word-of-mouth is a great influencer.
By developing company culture, it shows the customer is at the centre of a company’s philosophy, operations, and innovations – customer centricity shifts the focus from products to principles.
By online followers:
While Nike maintains a dedicated X (previously Twitter) account solely for customer support, it’s Instagram following of 305 million makes it the global leader in the social media space; Starbucks social media statistics show 37.2 million Facebook; and Virgin Atlantic boasts 1.2-milion followers just on its Virgin “Most Engaging” Google+ Page.
Recently, the Coca-Cola Company’s CEO James Quincey noted that “consumer-centric segmentation has been key to managing the changing and challenging macroeconomic environment. Ensuring we have the right product, in the right package, in the right channel, at the right price points to drive transactions and meet consumers where they are.” Coca Cola’s net revenues grew 5% year on year to $11.0bn (£8.8-bn) in the first quarter of 2023.
Other ways in which business leaders can measure levels of customer centricity include various key performance indicators (KPIs) such as customer satisfaction scores, Net Promoter Score (NPS), customer retention rates, and customer lifetime value.
Additionally, tracking customer feedback, conducting customer surveys and monitoring social media sentiment provides insights into the effectiveness of customer-centric strategies. This helps leaders gauge the organization’s focus on meeting customer needs and building strong, lasting relationships.
Customer centricity is more than woven into an organisation’s culture – it is the core of the culture. From it stems customer retention, revenue generation, and word-of-mouth promotion.
Experts note that acquiring new customers is around five times the cost of maintaining satisfied existing customers and that 86% of those who experience a good CX are willing to pay more for it. Also, that 32% of all customers would stop doing business with a brand they loved after one bad experience.
By reviewing the actions your company takes to put the customer centre stage, the gains are clear to see.
Whether it’s using information to personalize each customer’s retail choices, or offering bespoke services gleaned from analyzing accessible data, a C-suite with its foundation in customer centricity will clearly have a competitive edge.
Says Paul Holland, Consulting Partner, Signium Ireland: “Ultimately, the customer – or in the case of a professional services firm like Signium, Client Centricity – must be a core foundation in everything we do.
“Our clients make considerable, high-stakes investments in trusting us to find and engage the talent they require to build their businesses. We owe it to them to deliver the highest standards of client service in all our interactions with them, from pitching for the business to finalising negotiations with the successful candidate.”
Holland adds that the IP of any professional services firm is reflected in how client relationships are managed. “We are in a ‘relationship management’ business where trust, management of expectation and delivering what we said we would are key. Constant, clear communication, with good news and bad, is vital to building trust. There can be no compromises, the commitment must be constant and unwavering.
“The ultimate test of any professional services business,” says Holland, “is in its client retention rates and the length of client relationships. These metrics tell the true story.”
Empowering your teams with the technology, training and authority to solve customer problems and drive customer satisfaction and loyalty fosters a company-wide culture that places customer value at its core. By acknowledging and rewarding employees who meet customer needs, customer centricity becomes the way you do business, and a strategy for productivity and growth.