Despite the 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 short-term, cost-cutting tactics that are easier to connect to the bottom line.
To build a customer-centric company, you must 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 directly and positively impact your bottom line.
What does it mean to be customer centric?
Being customer centric means focusing every aspect of your business — 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 didn’t show 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 an entire life that's already complex enough?
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; then, the company-customer relationship ends.
On the other hand, relational companies 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. If a perfect solution doesn't exist at 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 purchasing because the goal is to make as much money as possible in each 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 customer's needs. The sales rep gets to know you, takes their time with you, and recommends the best solution because when you have a demand for their products again, you're much more likely to return 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 specific businesses. For example, both sides are happy with a transactional relationship when 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 show that customer centricity improves financial performance and provides a competitive advantage:
Seven of 10 U.S. consumers say they've spent more money to do business with a company that delivers excellent 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 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 to do their best work, so customer centricity is both a growth strategy and a way to build a strong company culture.
Examples of customer-focused behavior
There are many real-life examples of customer-focused behavior out in the world, but here are a few of our favorites.
Blue River Technology considers customer feedback
The founder of Blue River Technology, Lee Redden, thought he had come up with a winner when he was a student of the Lean LaunchPad and founded his company that designed large-scale riding lawn mowers.
As part of the program, Redden was tasked with doing customer research and was required to talk to 15 customers a week, sourcing feedback about his ideas. Three weeks into the process, he pivoted and changed his plans. As scary as it might have been, Blue River Technology has now received $13 million in funding, all due to asking for customer insights and changing its business strategy to address what customers were really looking for.
MeUndies engages customers with autoresponders
MeUndies sets the gold standard when it comes to customer experience. They are so customer focused that most of their standard customer support features, such as contact forms, autoresponders, and returns, are delightful. In this case we'd like to highlight the autoresponder that they send to every email into their inbox:
It worked! You sent us a message, and we got it. That's all this email is. To let you know that. And to let you know you should see a response from us within the next 2-4 days.
If you are looking for a more immediate solution, check out our live chat to talk to a real person.
Or if you don't want to talk to us, you can always check out our Help Page where you will find answers to a lot of questions. Not all the questions…but a lot: https://help.meundies.com/hc/en-us/
It's sweet and funny, and it conveys a ton of information to the reader.
Disney takes personalization to the next level
Most companies have some data stored when it comes to their customers. For many, it's just browsing data, payment history, and logs on past support inquiries. Disney, however, aggregates more than you might expect. For instance: The business applied for a patent to collect customer data by scanning guests' shoes, which it could use to gain insights into the most common paths between rides, where guests spend the most time, and other logistical information.
From their immersive experiences to their personalized photo packages, the Disney company takes a holistic, customer-centric approach to doing business.
8 best practices for building a customer-centric company
Now that we've covered the why, let's 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; instead, it's 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 you to invest significant time and resources in your support team so 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% to 40% of their time outside the queue.
Those investments will create the space to elevate your support team to deeper and more proactive conversations with 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, "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 allows engineering teams to step away from code and hear from people using the product. It also allows marketing teams to encounter objections and 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 significantly improves customer happiness and loyalty.
3. Actively solicit customer feedback
As Kathy Sierra describes in Badass: Making Users Awesome, your customers don't care about your product or service 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 called 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 to improve the customer experience if you don't have a system for regularly collecting customer feedback.
You'll find that customers can help you build a product that other customers love. While they can't singlehandedly steer your development toward innovation, a truly customer-centric company will take advantage of the fact that their customers often know what they want.
There's an even deeper benefit to asking and listening. As you ask for feedback and your customers offer it, you boost your chances of achieving a high customer satisfaction rate. Your insights will be more meaningful and bountiful, and your customers will be happier.
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 touchpoints in a positive way, and it makes them feel respected as a user and ultimately connected to the brand."
He continues, "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, a free resource or a 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."
“We’re not only in the business for our customers, we’re in the business for their customers, too.”
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 must also extend that empathy and care to your team. Here's how:
Start at the top. If you want your team to care about customers, start prioritizing it at the top. Don't just say that you value excellent service or write it in a memo; live it. Reward it regularly, recognizing those who go above and beyond. Make it clear to everyone that customers have a say at your company. A customer-centric approach is a way of doing business that fosters a positive customer experience at every stage of the customer journey.
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 of their job. Empower your employees to make decisions independently and 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 complex problem alone.
Show gratitude. Above all, remember to thank your employees regularly and show them how much you appreciate their intentional work in caring for customers.
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 customer costs and increased business profits by investing in their employees. Having a customer-centric approach goes beyond how you interact with customers; it also relates to the internal culture you build within the company.
Employees at Costco are paid 40% more than employees at competitor Sam's Club. Ninety-eight percent of Costco’s 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 typical approach in the retail industry of understaffing stores and paying employees as little as possible to boost profits. But Costco has been highly successful with its good jobs approach: Its gross profits have increased yearly for the last three years — nearly 23% from 2017 to 2020.
In her book, Ton clarifies that this type of success requires more than just well-paid and highly trained staff. Over 10 years ago, Costco worked on business-wide operational improvements to support their higher service costs, simplifying their business by offering fewer items and running more periodic promotions, for example, which made it easier for floor staff to run the stores.
Building a customer-centric company starts with creating 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.
7. Personalize your experience
No matter your business, you likely have at least some information about your customers. Use that to create a personalized experience that draws customers or potential customers in.
There are many ways to make personalization work for you — you don't have to automatically go straight to displaying products based on users' browsing history. Instead, consider customizing newsletters to the specific segments of your user base or adding additional recommendations in your support responses that may help.
For instance, if a customer reaches out to you about having trouble purchasing your product, respond to them to rectify the problem and include information about what they might be interested in doing after purchasing. This forethought makes your customers feel appreciated and seen.
Customer data is super important, and using it correctly is crucial to building a customer centric approach.
8. Meet your customers where they are
The companies that offer the best customer experience prioritize fitting themselves into the customers' lives, not the other way around. Instead of forcing your customers to come to you, meet them where they are.
So, if a customer reaches out on social media, answer inquiries in that channel instead of sending them a contact form and asking them to reach out there. If you cannot answer customer inquiries directly in the channel where they reach out, try to make it as easy as possible to get where they need to go. For example, if you cannot provide support directly on social media, create an easy path to transfer them to a better channel without the customer needing to reiterate their question and any additional details.
A fundamental tenet of excellent customer experience is taking as much work and effort off the customer's plate as possible. That means being present and available anywhere that they might reach out.
How do you measure customer-centric culture?
As wonderful as it would be to have a direct metric to understand how customer centric your team is, unfortunately, it doesn't exist. Instead, use lagging indicators to determine how your choices impact your customers. For instance, if you engage and address customer centricity, you may start to see a lift in specific metrics after the fact.
Here are a few metrics to keep an eye on:
Customer satisfaction score (CSAT)
Net promoter score (NPS)
Churn rate decrease
Customer lifetime value (LTV)
None of these measurements alone indicate customer centricity, but as they start to collectively trend upward, it means that changes to customer strategy are having a positive impact.
The benefits of customer centricity
A customer-centric growth strategy doesn't always fit easily into a spreadsheet, but that doesn't mean you shouldn’t invest in it. 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 up against companies with more money and bigger teams, but you'll thrive on the values that resonate with customers.