APRIL 3, 2023
18 min read
According to the review conducted by SuperOffice, customer experience remains a top priority for businesses and it will stay this way for the next five years. The data provided by the same source also shows that almost 86% customers are ready to pay more for a more quality customer experience.
Combining these factors, it’s easy to conclude that being customer-centric can potentially generate more profits.
On the other hand, customer frustration can lead to the customer churn and, as a result, falter your profits generation process. If you do not know how to communicate with customers or satisfy their needs, end-users might avoid going back to your product or services. One of the most important aspects of customer-centricity is relatability; you need to relate to your customers and not the other way around.
So, a customer-centric approach especially in finance gives a number of advantages and in this article I’ll cover most of them. Apart from this, the main question for today’s post is how to ensure your project qualifies for customer centricity standards. So, let’s unwrap this together!
Understanding What Customer-Centric Product Development is
Customer-centric approach is first of all, about putting your customer first. Customer-centric definition states that the client must be the center of your business strategy in order to effectively build long-term relationships and customer experience.
It is important to note that customer centricity is not just about your relations with the customer. It’s about how you perceive the people you sell your products or services to, whether you relate to their pain points and are able to satisfy their requirements.
Overall, you have to make sure that you see the engagement and interaction the same way your customers do. Quite often, businesses can perceive the communication as successful and effective meanwhile from the customer end, the same interaction can be viewed as obtrusive, touting or annoying. So, to avoid that, let’s figure out why customer-centricity is so important and how can your business achieve it.
Why Customer-centric Product Approach is Important
Finances Online’s recent report shows that about 91% of customers would leave without warning when provided with bad customer service. Also, an important notion is that more than two thirds of customers say that bad customer experience affects their perception of a brand overall.
- Improves overall customer experience. Around 66% of customers expect business to understand their needs. As you learn, research, and analyze your end-user needs you might better understand what you should have in your final product or service. Say, you are a male-business owner, you’re 55, and your annual income amounts to $150,000; meanwhile your average customer profile is a woman aged 35 with annual income around $50,000. Your own experience will be most likely irrelevant to your customer in such a case, while if you pay attention and create polls and surveys, you can find out more about what they actually need from your product. This way, you will give them what they have a demand for, and will not be overwhelmed by the market. If you take your customers’ pains into account and forge your processes around satisfying them, you get more loyal clients and therefore more profits.
- Reduces customer acquisition costs. 74% of customers are ready to buy a product or a service based on experience alone. And, on the contrary, poor customer experience, service, and engagement can result in massive customer churn rates. So, if your business can relate to the customers and provide them with a high-level CX, they are more likely to come back and tell others more about your brand. This way, your reputation reduces customer acquisition costs since people believe your brand can deliver.
- Enhances revenue generation. Customer centric meaning includes the ability to acquire more clients via the enhanced engagement and understanding of their needs. Overall, if you know what your target audience needs you should be able to enhance the revenue generation of your business by attracting more people and reducing customer churn. Thus, customer centricity definition includes the opportunity to enhance revenue generation by engaging clients. Customer-centric approach allows you to sell not what you want, but what your customers need.
- Improves marketing efforts efficiency and lowers the expenses. When your target audience sees an ad of your product or service, it is crucial to hook their attention within seconds. If your advertisement shows the solution to their pains, people will linger to learn more about your product. This way, customer centric marketing gives better results and people who’ve already used your product will spread the word about it, lowering the expenses. The more your business does for its customers, the more customers will do for your business.
Characteristics of customer-centric approach
So, if you’re ready to implement customer centricity principles into your workflow, here are some things to consider. First of all, the fundamental basics that lies within customer centricity definition is asking questions and doing it right.
Focus on finding the right people to ask, aiming for a median of your target audience. Start with a survey but note that the most fruitful results can be achieved with a focus group of no less than a hundred people.
Customer centric culture is all about asking the right questions and changing accordingly to the answers you get. Build hypotheses and test them, and don’t cling to them too much. If something doesn’t work and you see your customers unhappy, scratch it and start again.
In the visual above you can see the types of hypotheses by David J. Bland Alex Osterwalder. To learn more about what is customer centricity, I highly recommend reading his book “Testing business ideas”.
Here I’ve gathered some of the customer centric approach characteristics to help you understand how to drive your business towards client-centricity.
- Customer-focused leadership. This is a leadership style that places the needs and wants of the customer at the center of all business decisions and actions. It involves putting the customer first in every aspect of the organization, including product development, customer service, and marketing. To build customer-focused leadership successfully, you need to have a deep understanding of your target audience and learn that your success depends on your customers’ success.
- Culture and core values. Make empathy, ownership, and continuous improvement into the three main pillars of your business culture. Strive to understand and relate to your customers, take ownership of their experiences with your product, and improve accordingly to the feedback you receive.
- Vision alignment. Ensure that every stakeholder of your business shares the same vision on the product, and on the customer centric selling. This will smooth out the workflow and processes your business is going through, leading to a more seamless funnel.
- Efficient utilization of customer data. When you receive feedback or learn about your target audience a new input, put these data into action. Don’t wait until people ask you to, do this as soon as you have the ability to change. Customers appreciate when it seems like you hear their thoughts. More so, ensure that the data transfers across your company without silos, so each member of the team has the right understanding of the current processes.
- First think of what to give, not what to take. Most businesses have their processes centered on gaining profits before providing value. They prioritize marketing funnel and make it a stepping stone to sell more, not better. In customer centricity you have to focus on the value you give your customer, ensuring that you’re aiming at selling better products that solve clients’ pains. This makes your business reliable and contributes to customer retention.
- People before products. Just like in the previous point, your primary goal should be the value of your product. Don’t create everything at once, don’t aim for the stars from the start. Make your product about solving customer’s problems rather than wide functionality that customers won’t need.
- Customer-friendly technology. Digitalization is an important part of a company’s growth and evolution, so ensure that your technological solutions are customer-friendly. Make it accessible and easy to use, this will make the software addictive to customers. Don’t chase unnecessary features that seem trendy, update according to your needs and market demands. Use advanced security solutions and try Know-Your-Customer testing to assure your clients of safety.
- Employees first. Good customer centricity examples start from employee centricity. If your staff is unmotivated and has poor experience working for your company, they won’t be as efficient as they could be. So, start making your company centered on the initial fuel of your services and then your workers will give more value to the customers, too.
- Forget the golden rule. Remember that simple truth of treating others the way you want to be treated? While this is good in theory, it doesn’t work in practice. You don’t treat customers the way you want, you treat them the way they want. The solution might be good to fix your problems but at the same time it can be insufficient for your customer. While it’s great to be in love with your idea, you have to be open to criticism and fresh input.
“We must learn what customers really want, not what they say they want or what we think they should want.”
- Outside-in thinking. Customer centricity is all about outside-in thinking. In this relatively new strategic approach you take customers and their perspective as the base for your business processes and ideas. This way, you build your business to fit the customers’ needs essentially and minimize the possibility of creating unfitting solutions.
Misconceptions about Customer Centricity
Before starting adapting the customer centric strategy make sure you are not falling victim to the misconceptions about it. I’ve gathered some of the most popular myths here, some of them are practical cases I’ve encountered in my work experience.
It is about more research
Customer-centricity is about research, this is true but it is also about analyzing, gathering, and surveying. Your perception of the customer, the questions you ask, and hypotheses you build essentially matter more.
Let’s take a simple example. Say, you’ve researched the market and found a new trend that seems to be extremely popular and proficient, and does the trick for most of the companies and startups out there. The hot take here would be if you have a fintech startup and you’ve decided to leverage gamification as it is a popular method to engage customers. However, your primary segment of customers are people in their late-thirties and they’d appreciate it more if you pumped up the security systems.
So, the research isn’t a magical pill, you still have to relate to your customers and give them what they want, not what you think they want.
Being customer-centric meaning have an expert on board who will make your business better
Each project, product, service, and domain is unique. So, there is no expert who can help every startup at once equally well. Experts aren’t wizards, they can help you figure out how you should do it but they can’t give you direct instructions on what you should do. And, they also need to analyze your domain and customers first.
Of course, a good expert can help you learn what you can try and what you should scratch out of your strategy. But the effect won’t be as magical as you expect it to be, as you still have to put a lot of work into your product.
Here’s what a real qualified customer-centric expert can do:
- Simplify and speed up the analysis process with certain tools and methods.
- Help you separate hypotheses from facts.
- Help you dissect which hypotheses are suitable to try out, and which you shouldn’t pay any attention to.
- Survey your customers and conduct experiments to validate the hypothesis.
Disregards the employees needs
A lot of business owners think that customer centric companies disregard their employees in order to prioritize customers. This is far from being the case as customer centricity demands your employees to have enhanced focus and be able to perform better.
So, nearly every customer centric organization is employee centric first. A lot of them even have their employees using their products and services! This is what you should strive for, treating your employees the way you’re planning to treat your customers, too.
If you adopt customer centricity, you’ll destined for success automatically
Customer centric mindset doesn’t guarantee you immediate success. Even if your product is perfectly user-friendly it still doesn’t mean users want it.
It’s a common misconception among startupers as when we start something, pour our ideas and efforts into it, we always see it as something bigger than it actually is. Hence, comes the biggest mistakes of every startup owner ever - the fear of giving up on certain features and ideas.
A lot of startups continue trying to improve something that doesn’t work initially instead of scratching it and starting again. Sometimes listening to your customer means actually changing the way you see your product completely. Pivot in time and then the results will come faster, and most likely will be more profitable.
Did you know that Avon initially sold books, not cosmetics? Or have you heard of the famous TV network Nintendo? Nokia entered the mobile communications market more than a hundred years after it was founded, and Twitter was initially created as an SMS service.
Even Google technology company once was just a search engine, and we all remember those times.
Benefits of client centric approach
So, here it goes, the benefits of customer centric approach. They are numerous and in this paragraph I only scratched the surface of everything your company can get if it starts leveraging customer experience.
Customer-centric approach drives more attention to your products as customers use them with more satisfaction. This visibly enhances a company’s growth as the existing clients bring new clients, spread the word about your services, and basically advertise your company for you.
Enhanced customer retention
Customer centricity contributes to enhanced customer experience, which in turn enhances customer retention. You get more people supporting your business, more clients coming back to work with you again, and more loyal customer base overall.
Increased sales / Clients spend more
As I’ve indicated above, a lot of customers are ready to spend more just for the sake of getting a better experience. You can raise your sales up to 10% if you center customer experience and service and leverage customer centricity.
Advanced business value
Customer centricity brings you a higher business value overall due to increased sales, profits, and brand recognition. Improved customer relations lead your business towards being more respected on the market and, as a result, being the preferable choice of your TA.
Just as I indicated above, customer centricity provides a competitive advantage in the form of reputation your business gets among the customers. Being the preferable choice for them makes you one step ahead of competitors. However, this reputation is something you will have to constantly maintain.
The analysis you perform to find out your customers’ needs and requirements can help you detect and prevent potential risks. You’ll be able to see the growing and faltering demand for certain products. Also, if any crisis occurs you will have an opportunity to communicate with your audience more effectively, bringing additional transparency into your relations.
Lowers marketing expenses
You will be able to cut costs on maintaining the existing customers if you already took care of customer retention by being customer centric. Aside from this, customer centricity can help you raise the customer lifetime value which is an expected sum of money a client is expected to spend on your services for the lifetime.
Challenges of building Customer Centric Approach
If you’re ready to go for customer-centricity, you might encounter several challenges in your practice. In the graph below you can see the challenges most companies encounter in their customer-centric journey.
However, in this paragraph I will be sharing my own experience and vision of the challenges companies often face when trying to implement a customer-centric approach.
Lack of long-term vision
Often companies are focused on momentary solutions that can bring more profits now but won’t be as future proof later. A lot of business owners don’t think about scaling when launching the product, which can be a crucial mistake.
This way, you’ll be able to satisfy the short-term needs of your customers but when the market changes your business might falter. One of the possible risks with the lack of long-term vision is also the possibility of creating the software with little to no scalability. When your customer base is not so large this solution will suffice but as soon as more people are interested in your services, the software can end up malfunctioning.
To overcome this challenge, focus on both short- and long-term gains. Ensure that your technical capabilities are enough for future scaling and you’re ready to adopt the changes in the market.
Lack of customer data
Remember that the primary goal of customer centricity is to obtain and analyze more data in order to understand the client. A good choice would be software for feedback gathering and data analysis systems.
Some startups make the mistake of conducting small surveys faster instead of taking more time to assess the intel from a bigger number of people. Try to gather as much information as you can as it will help in risk mitigation and will overall make your attempts to build a customer-centric approach better.
Also, to overcome this challenge don’t go blindly with data you gather. Analyze the input and customer feedback as some of the information you will get might prove pointless for your business specifically. Listen to each voice but change when the large public demands it.
Data silos or inability to share and interpret information
As you’ve seen on the graphic above, around 52% of business owners surveyed by SuperOffice think that data silos are the most visible challenge for implementing customer centric approaches.
As alignment and synchronization is extremely important for customer-centric organizations, you have to make sure everyone on your team exists in transparent environments. It’s important to stay on the same page and see the customers’ needs from each point of view.
So, to overcome this challenge arrange regular meetings within and across the departments. Here in DashDevs we have weekly cross-department meetings to ensure our sales, marketing, and other processes are aligned. Apart from this, each of our team members knows their responsibilities and have a transparent view of the workflow.
Such practice helps us remain customer focused and provide each of our clients with personalized experiences.
To adopt customer-centric practices you have to do more than analyze data and ask the right questions. Customer-centric culture means you have to allow your product to pivot around the customers’ demands and requirements, making their point of view the center of your new developments.
This way, when you release new products or services you keep in might the value they bring to the customer and not only to your business. If you choose to do so, this challenge won’t affect you.
In an opposite case, non-aligned culture might result in distorted workflow and too many bottlenecks. This might prolong your time to market and overall result in poor KPI. Not to mention that if your culture is non-aligned with customer centricity, you might even use the wrong KPI to measure customer satisfaction in the first place.
No technological backup for data management
Customer centric companies always work with a lot of data, so you will need data analytics solutions. Such solutions will help you process the immense amounts of data in order to dissect the most important lessons and meanings out of the input you’re getting. Not only this, data analytical systems can predict trends, demands, and even customer behavior if they are powered by artificial intelligence.
Also, technology can backup your data and help you power through if your system crashes or data leaks out. This provides both you and your customers with advanced security.
Tips in Building Customer-Centric Fintech Products
Customer-centric approach in fintech is important because it gives your client the feeling of being heard and results in extra trust your business earns. Since trustability is a major pain point for fintech solutions, being extra in this wouldn’t hurt.
So, I’ve summed up my knowledge in these tips you see below. They should help you tune in the customer centric approach to be more effective.
Research and anticipate the TA’s needs and pains
Customer centricity requires you to understand your customers to the fullest. So, you should anticipate their pains and needs by acquiring as much information as you can. Experiments can be useful here, as you will need to check your hypotheses, so you can try to implement prototypes first.
Be thoughtful about customers’ feedback
Once you attain the first feedback, use it in action. As I’ve mentioned before, you should analyze it and find the ways you can improve your business from what customers are telling you. It’s crucial to give people what they ask for as this is the fundamental truth of customer-centric approach.
I stated before that you need to check hypotheses before you treat them as facts. So, use the feedback but don’t rush to implement everything; check if it’s right for your business first.
Relate to the customers, use their communication style
If you’re communicating with middle-aged consumers you probably shouldn’t be using modern-day slang widely used by Gen-Z. Apart from this, you also might try to implement the selected communication channels via social media platforms you TA is using the most. In this case, middle-aged customers should be comfortable with following you on Facebook and contacting you via WhatsUp. For younger customers, Instagram and Twitter will do better.
Launch user testing
The best way to see whether your product will be successful is giving people the opportunity to actually use it. So, launch user testing to allow customers perform different tasks in your software and check themselves if they’re satisfied with what you created. Besides, this is the best way to actually see your product from the customers’ perspective.
Stay approachable and exceed expectations
Remain approachable for your customers and make sure you not only reply to the feedback by giving commentaries, but by adjusting your product to their needs. People will feel their impact on what you’re creating and this can pump up their interest in your services. If your users know that you care, they will be more engaged in the software’s improvement and buy your services more.
So, what does customer centric mean? First of all, for you it means to be on the same page with your clients. Customer centricity is all about relating, researching, analyzing, and improving. Pivot your project around the customers’ needs and don’t be afraid to change, fall back, and bend the ideas.
Customer-centric meaning excludes rigidness. You have to be agile and adjustable. This is how we in DashDevs achieve our point of customer centricity. If you wish to know more about it, I’d recommend the book “The mom test” by Rob Fitzpatrick.
Or, keep up with our blog–more articles on this topic are coming soon!
What are the key 4 steps on customer centricity?
So, wrapping up the article, it’s safe to say that the key four steps on customer centricity are the following:
- Customer understanding
- Vision alignment
- Usability of a product
- Optimization for customers’ needs
What is a customer centric strategy?
A customer-centric strategy is an approach to business that places the customer at the center of all decision-making processes. This means that every aspect of the organization, from product development to marketing to customer service, is designed to meet the needs and preferences of the customer.