Despite the mounds of data showing that investing in customer service drives better business results, building a truly customer-centric company still takes courage.
True customer centricity requires a deliberate commitment to principles that may run counter to the kinds of short-term, cost-cutting tactics that are easier to connect to the bottom line.
If you want to build a customer-centric company, you have to commit to a set of values — and instill them across your entire organization — that put customers first and foremost in all decisions.
It’s not easy, and it doesn’t always come naturally. But if you succeed, it will have a direct and positive impact on your bottom line.
What does it mean to be customer centric?
Being customer centric means focusing every aspect of your businesses — from marketing and sales to product development and support — on customer needs and interests, prioritizing customers’ long-term successes over short-term business goals.
Consider all the times you’ve received dehumanizing service from a company that prioritizes nickel-and-diming their customers over delivering a positive customer experience:
- The airline that gouged you when you had to change your travel plans due to a family emergency.
- The cable company that rescheduled three times and still no-showed in the four-hour window you took off from work to meet them.
- The retailer that failed to ship your partner’s birthday gift on time and took another week to respond to your calls and emails.
Did you feel valued as a customer, not to mention as a living, breathing human being with needs, plans, a budget, and a full life that’s already complex enough?
Clearly, not every company takes a customer-centric approach. And despite how it may sound, we’re not here to judge.
The reality is that it’s entirely possible to grow a successful business without taking a customer-centric approach. Consider a telecommunications company that holds a virtual monopoly in a given region; their customers may have no other option. In other cases, customers value a low price above anything else, including service quality.
Different approaches can work for different business models, and where you position your business will vary depending on your market and the customers you are targeting. But in almost all cases, customer centricity is a powerful way to stand out from your competition.
Relational vs. transactional service models
Transactional companies are focused on single, one-off interactions with their customers. A customer makes a one-time purchase or submits a single support request and gets an answer; after that, the company-customer relationship ends.
Relational companies, on the other hand, focus on developing long-term relationships with their customers. They take time to understand customers’ needs and motivations and recommend solutions that meet those needs. And if a perfect solution doesn’t exist in the moment, they may even create one, following up with the customer later to let them know there’s a better solution.
A transactional company might try to upsell you when making a purchase because the goal is to make as much money as possible in each individual interaction. The goal is short-term revenue generation — not the creation of lifetime customers.
Instead of upselling, a relational company might recommend a product it makes less money on because it better meets a customers’ needs. The sales rep gets to know you, takes their time with you, and recommends the best solution because when you have a need for their products again, you’re much more likely to go back to the place where you were treated well.
Transactional may seem like a negative way to describe a relationship, but we all experience positive transactional relationships with certain businesses. For example, both sides are happy with a transactional relationship when you’re ordering fast food or streaming a movie.
But relational companies see customer centricity as a growth opportunity and a competitive differentiator. Generally, they don’t require a spreadsheet to tell them putting customers first is the right thing to do — they put customers first because they understand the long-term value of a great customer experience.
Why is customer centricity important?
Data from a variety of studies shows that customer centricity improves financial performance and provides a competitive advantage:
- Seven out of 10 U.S. consumers say they’ve spent more money to do business with a company that delivers great service.
- Increasing customer retention rates by 5% increases profits by more than 25%.
- It is anywhere from five to 25 times more expensive to acquire a new customer than it is to keep a current one.
- U.S. consumers are willing to spend 17% more to do business with companies that deliver excellent service.
The ROI of creating an outstanding customer experience more than pays for itself.
And customers aren’t the only beneficiaries; building a customer-centric company also empowers employees to make good decisions and do their best work, so customer centricity is both a growth strategy and a way to build a strong company culture.
6 best practices for building a customer-centric company
Now that we’ve covered the why, let’s take a look at the how. Here are six strategies for building a customer-centric company and creating lasting, loyal relationships with your customers.
1. Invest in customer service
Customer-centric companies don’t see customer support as a cost of doing business; rather, it’s thought of as a revenue generator. Their support teams are the driving force behind company growth.
Your support team is closest to your customers. They’re talking to customers every day and helping them achieve their goals. There’s no better team to undergird everything you do and every decision you make as a company.
Building a customer-centric company requires that you invest significant time and resources in your support team so that they’re not always just fighting to empty a queue. That means prioritizing:
- Hiring excellent people.
- Paying customer support agents more.
- Treating them as the proactive, empowered, revenue-generating professionals they are.
- Eschewing metrics like first response time in favor of measuring customer happiness or customer effort.
- Maximizing your potential with self-service support.
- Staffing so that people can spend 20%-40% of their time outside of the queue.
Those investments will create the space to elevate your support team to deeper and more proactive conversations with your customers.
Customer support is only one part of the overall customer experience, but it’s a place where your company values are clearly shown directly to your customers.
2. Get everyone in the company involved in support
It’s hard for non-support team members to put customers first when they never directly interact with customers. That’s why many customer-centric companies have adopted the practice of whole company support — having everyone in the company spend time in the support queue helping customers.
Help Scout Co-founder and CTO Denny Swindle says that “Support teams can too often be used to shield the rest of the company from customer issues and complaints. But if you’re an engineer building the product, you should want to know where users are getting confused or blocked.”
Denny continues: “This gives you empathy for your support team members, so when you’re developing a feature, you have both the customer and support team at the back of your mind.
“You can also see the common issues, complaints, and requests that customers write in about. As engineers, if you have those themes in your head, you can think of them when you’re developing new stuff, and you can incorporate them into the things you’re already developing.”
Whole company support gives engineering teams a chance to step away from code and hear from people using the product; marketing teams are given an opportunity to encounter objections so that they can become more informed about how customers perceive the product.
The result is a better understanding of how customers think and what issues they are struggling with, which go a long way toward improving customer happiness and loyalty.
3. Actively solicit customer feedback
As Kathy Sierra describes in Making Users Awesome, your customers don’t care about your product or service all that much — they care about what it helps them accomplish. Your job is to help customers succeed in the context of their jobs.
CX expert Don Peppers echoes that statement in his post ”Explaining Customer Centricity With a Diagram”: “Assuming that you start with a quality product and service, being customer centric means understanding the customer’s point of view and respecting the customer’s interest.”
Listening to customers is an inherent part of being customer centric. It’s tough to know how you can improve the customer experience if you don’t have a system in place for collecting customer feedback regularly.
You’ll find that customers can help you build a product that other customers love. While they can’t singlehandedly steer your product toward innovation, a truly customer-centric company will take advantage of the fact that their customers do often know what they want.
4. Sweat the small stuff
“There are certain aspects of a business that elicit trust and connection,” says Help Scout Co-founder and Designer Jared McDaniel. “For me, what sets companies apart is the effort put into the final 10% (which often requires 90% of the work).
“Whatever area it’s in — product, business, or culture — when you demonstrate that level of attention to detail, it highlights that nothing you do is by accident, that you’re paying attention. It shows that you care.”
Jared is ecstatic when customers tout their love for Help Scout, even if they can’t pinpoint exactly why: “I believe they love it because they’ve experienced each and every one of those touch-points in a positive way, and it makes them feel respected as a user and ultimately connected to the brand.”
“We’re not only in the business for our customers, we’re in the business for their customers, too.”
Jared believes that excelling in the last 10% is the real game-changer, especially in a crowded market with bigger budgets and larger teams. “You have to differentiate in nuanced areas of the business to truly stand out.”
He concludes, “So whether it’s a headline or an email, free resource or paid feature — all of those pieces need to work together and require a team of people that really care about making them happen. That’s what I think creates an experience and a brand that customers stick with.”
5. Treat your company culture as an asset
One part of building a customer-centric company is valuing your customers; the other part is valuing your employees. In addition to fostering meaningful and empathetic relationships with your customers, you have to extend that empathy and care to your team as well. Here’s how:
- Start at the top. If you want your team to care about customers, start by making it a priority at the top. Don’t just say that you value great service or write it in a memo; live it. Reward it on a regular basis, recognizing those who go above and beyond. Make it clear to everyone that customers have a say at your company.
- Hire people who fit. When evaluating potential new hires, consider whether or not they share your company values. Do your best to build a team of people who are enthusiastic about helping your customers thrive.
- Trust your team. Everyone likes to take ownership in their job. Empower your employees to make decisions on their own and to delight customers in the ways they feel are best.
- Establish good lines of communication. Make sure it’s easy for everyone to communicate and stay on the same page so that nobody feels like they’re facing a difficult problem alone.
Above all, remember to thank your employees regularly.
6. Structure your business to enable customer centricity
In The Good Jobs Strategy, Zeynep Ton looks at how companies like Southwest Airlines, In-N-Out Burger, Costco, and Trader Joe’s have lowered costs for customers and increased business profits by investing in their employees.
Employees at Costco are paid 40% more than employees at competitor Sam’s Club. Ninety-eight percent of store manager positions are filled internally, and turnover for employees who stay more than a year is 5.5% — significantly lower than the industry average of 59%.
This goes against the more typical approach in the retail industry of understaffing stores and paying employees as little as possible in order to boost profits. But Costco has been highly successful with its good jobs approach: The company’s gross profits have increased every year for the last three years — nearly 23% from 2017 to 2020.
In her book, Ton makes it clear that this type of success requires more than just well-paid and highly trained staff. Costco worked on business-wide operational improvements to support their higher service costs, simplifying their business by offering fewer items and running fewer promotions, for example, which made it easier for floor staff to run the stores.
Building a customer-centric company starts with building an employee-centric company. When you pay your employees well, don’t overwork them in favor of your bottom line, and empower them to delight customers at every opportunity, customer centricity becomes a natural part of how your business operates.
The benefits of customer centricity
A customer-centric growth strategy doesn’t always fit easily into a spreadsheet, but that doesn’t mean it doesn’t work. People invest in billboards and other forms of brand marketing all the time, and it’s really hard to measure their effects, too!
Building a customer-centric company is good for your customers, your employees, and your bottom line. If your business operates in a competitive market, you might be outcompeted by companies with more money and bigger teams, but you’ll thrive on the values that resonate with customers.