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Customer Centricity in 2018: Insightful Value Creation, not just Process Alteration.

Customer Centricity in 2018: Insightful Value Creation, not just Process Alteration.

Finland’s top management’s focus has turned to developing customer-centric critical capabilities: the whole brain approach, implementation of data and iterative learning have become the cornerstones for future success. Although the concept of customer centricity has been discussed since the 1950s, it has become imperative in the connected world of the 21st century. Global megatrends, transforming competitive landscape and the resulting empowered consumers have given rise to customer-centric actions also in Finland. Customer centricity has taken a leap from companies’ strategy statements into real hands-on actions within the last five years.

And not without a reason: Numerous international studies have been able to identify the main elements of customer-centric companies and to showcase their connection to business benefits. However, the provided results are on a rather broad level, making their implementation in practice a real challenge.

Customer centricity calls for a whole-brain approach

At its simplest, customer centricity means understanding the needs of the most important customers, consumers or decision-makers, and adjusting the offering to match those needs, while keeping in mind the company’s strategic strengths and profitability. From the customers’ point-of-view this translates into ease and added value – products and services that are in line with his/her values and find relevance in everyday life.

Notably, customer-centric business does not merely equal great customer service. Rather, it requires combining strategy and empathy with customers’ needs, in fancy words, a whole-brain approach. In the future, both the top management and individual employees should have the ability to derive insights from data and the ability to empathize – genuine willingness to help and learn about customers.

Insights engine turns data into meaningful insights

The important building blocks of customer-centric companies, business strategy and purposeful brand, should be built based on solid customer understanding. Therefore, the most essential element of customer-centric companies has become the so-called insights engine, which entails the gathering and utilization of customer and market knowledge for the benefit of customers and together with them.

The current engineer- and product-focused Finnish business culture does not cut it – we also need to understand who the products are for and why. Iterative product development process and co-creation with customers are expected to gain even more foothold in the future. In essence, the customer-centric way of business requires more cooperation between marketing and other company units, but especially with the most relevant customer groups.

Iterative learning enables growing the customer-centric business profitably

As learning in general, the journey towards customer centricity requires a yearning to change, concrete actions and determination to get rid of old, dysfunctional processes one by one. Most importantly, it entails engaging in iterative learning by having the courage to fail, i.e. applying the “fail fast” –thinking. Both consumers and employees need encouragement along the way: systematic communication about the necessity for change, its goals and the role of each employee provide much needed boosts of confidence during the change process. Even the smallest accomplishments should be celebrated along the way. As for the consumers, a clear idea about how the company provides added value and showcasing this in every touchpoint becomes essential.

At its best, customer-centric business translates into a win-win –situation in which rational (business benefits) and emotional (genuine willingness to help customers and ease their lives) are combined. The Know You Again case brought up by one of the interviewees provides an inspirational example of this. In short, Baidu teamed up with the Alzheimer’s Disease China to develop Artificial Intelligence glasses that help Alzheimer patients to better manage their everyday and even slow the development of the disease. Implementing artificial intelligence to ease the lives of consumers is predicted to become one of the essential elements of customer-centric companies in the future.

Altogether, the basic elements of customer centricity, namely whole-brain approach, insights engine and iterative learning, are the same across businesses, but companies need to find their own approach to these. Thus, customer centricity takes us back to the roots of companies’ existence: What is our justification for existence and how can we better realize this based on the needs of our most important customers? Mere process enhancement will not cut it anymore. Instead, companies need to continue to differentiate, learning little by little with their most important customers in mind.

 

This blog post serves as the first glance into the building blocks of customer-centric companies based on a comprehensive literature review and 12 in-depth executive interviews that I have conducted as a part of my Master’s Thesis for Frankly Partners. The main goal was to create a managerially relevant framework, which helps managers to identify areas for improvement and therefore helps in taking customer centricity from talk to action. It has been inspiring to notice first-hand that the corporate world has truly started to embrace the concept of customer centricity. Stay tuned – the entire research and customer-centricity framework will be published at the beginning of 2018.