What does it mean to shift from "product-centric" to "customer-centric"?

2022-08-17 10:20:01
Shi Xiufeng
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Summary : "Customer focus" is about more than just selling the product. That's not enough! Enterprises need to pay more attention to: are customers using the products sold? How is the experience? Any questions? What can be improved? Will the customer continue to buy my product next time?

An old American once said that "the customer is god." He is the founder of Wal-Mart Group - Sam Walton.

Sam set up shop believing that "as long as the store offers the most comprehensive range of goods and the best service, customers will flock to it." He has two employee requirements: "The sun goes down" and a "ten-foot attitude." "Sundown" means that each employee must complete their day's tasks before sundown and, if requested, meet the customer. The "ten-foot attitude" means that when a customer comes within 10 feet of an employee, the employee must actively ask what the customer wants and look the customer in the eye when speaking.

Based on this philosophy, Wal-Mart grew into the world's largest retailer.

Today, "customer centered," "customer is God," and "customer first"... We have heard these concepts so much that they are no longer new. Some companies use it as a "bible," others just as a "slogan."

1. Digital transformation, "customer - centric" is hot again!

As I have recently written a series of articles on digital transformation, I have read a lot of relevant materials and cases. I've seen an emphasis on "customer focus" in digital consulting and implementation services and transition.

Here are a few examples:

1). PwC: Digital enterprises take customers as the center of building capacity system.

PwC believes that compared with traditional enterprises, digital enterprises show seven differences in business, organization, IT, and other aspects (see the figure below), the core of which is to build a "customer-centric" capability system. Taking the customer as the center is the goal of enterprise digital transformation, its meaning is to build a multi-level system that takes the customer as the center of the ability of the organization, including around customer design organization structure, innovation ability, and the design based on customer scenarios satisfy customer experience interactive way, and in the data, IT and the inspection mechanism and so on various aspects reflect the concept of "take the customer as the center."

2). Deloitte: A customer-centric approach to digital transformation

Technological progress is driving a fundamental shift in the market, promoting a new round of digital transformation to disrupt. Deloitte believes in making the customer, not technology, the center of digital transformation efforts. Customer expectations and demands create significant challenges and opportunities for employees in sales, service, support, and product functions. To successfully ride the wave of change, enterprises need to constantly evaluate how digitalization changes customer behavior, rethink customer engagement mode, use technology, redesign the role of employees, form customer success ability, maximize customer value, and provide a better experience for customers.

3). Huawei: customer-centered business and technology-driven model

Huawei puts forward that digital transformation should be driven by Business and technology, return to business essence and create value for customers and users. Specifically, it is the V-word model. One line is CBA (Customer-business Architecture), which focuses on customers, returns to Business, and attracts Architecture. The other line is ABC (AI+Big Data+Cloud), which applies technology depth to business processes.

4). ThoughtWorks: Customer-centered digital enterprise model

ThoughtWorks believe: that since it is transformation, we need to understand what the mode of To-be looks like to guide the direction of transformation and gradually establish a consistent vision, which is highly unified at the abstract level, namely "customer center."

Customer focus has been around for decades in a market economy. I remember a few avant-garde businesses from my childhood using the slogan "The customer is King" to attract buyers. However, the digital era has given a different meaning to the customer center. The customer center is no longer simply collecting customer feedback and continuously improving its service. It is to comprehensively explore customers' deep-seated needs, creatively expand service fields and ways, and achieve expected growth with customers.

2. What exactly is "customer centric"?

We've been using the words "customer first," "customer is King," and "customer first" for a long time. Almost every business considers itself customer-centric; I've never heard a senior executive say that his company isn't.

Lei Jun once said: "Don't be god, because no one in China believes in God if you see users as God, is to see users as stupid X." "but this sentence and the second half of the sentence "users should be friends"! This is more sophisticated "customer-centered".

When do you think of a "customer-centric" business, which company comes to mind first?

My first thought is not Huawei, Mi, Taobao, or Jingdong, but Hi Hotpot.

Every time we go to Hi Hotpot to have a meal, we have to queue up for a long time. In this fast-paced era where time is everything, Hi Hotpot can make you willing to wait, which is enough to show that he is "worth waiting for". And Hi Hotpot is "worth waiting for", with his "good service experience, customers love, eat comfortable"!

Truly "customer-centric" enterprises are also more able to get the trust and favor of customers. Customer achievement is to achieve their own.

The purpose of a business is to create customers. The reason why "customer focus" can be regarded as the "bible" by so many enterprises is that they know it is the bottom code of business development.

-- Peter Drucker

Because only customers, through their purchase of goods or services, convert economic resources into wealth and goods into goods. It doesn't matter what the company wants to produce. What the customer wants to buy, what is their perceived value, that is decisive. They determine what a business is, what it produces, and whether it will thrive.

Whatever the time, "customer focus" creating customer value and truly putting the customer first goes beyond the simple slogan "customer focus," and generates the greatest and most lasting business value.

3. Digital transformation, why the special emphasis on "customer-centric"?

"Customer focus" has always been the underlying code for business success. The advent of the digital era has given "customer focus" a deeper meaning. As ThoughtWorks Says, "Being 'customer-centric' in the digital age isn't about simply collecting customer feedback and continuously improving our service; It is to explore customers' deep-seated needs more comprehensively, creatively expand service fields and service methods, and achieve common growth with customers."

In the digital age, more than ever before, "customer-centric" is needed, mainly for the following reasons:

1). Stickier customer binding

How do you keep your customers? Do know the customer better than he knows himself!

Digitization makes it possible for companies to "know the customer better than he knows himself". Collect customer data through multiple channels and keep the data up to date to ensure that even the smallest changes are correct. Leveraging digital technologies and tools to gain insights from this data can align companies with changing customer preferences, helping them optimize processes, improve products, enhance services, and increase customer engagement and loyalty.

2). Higher business "moat"

The "customer-centric" digital transformation strategy not only helps enterprises to obtain more customer conversion and improve revenue and profits but also helps to optimize the business process of enterprises, thus reducing costs. The cost reduction may also feed back to customers and gain more trust from them, thus forming a virtuous circle. Sometimes, when you see a competitor offering you a lower price than you do, it's not necessarily a price war. It may be that the competitor has found a way to optimize and reduce costs. The "customer-centric" digital transformation strategy is easier to help enterprises establish a business "moat" and continuously improve their competitive advantages.

3). Embrace change and respond quickly

Digitization is transforming people's working and living environment, and at the same time, customers' consumption needs are also changing constantly. The traditional "product-centered" buy what you have can no longer meet customers' diversified, personalized, and customized needs. In the digital era, competition among enterprises will revolve around who can respond quickly and who can have deep insight into customers. The closer you are to users, the more opportunities you can take for development!

4). Establish public praise and build brand

"Customer focus" is the only way to retain customers for a long time because understanding their preferences enables them to provide better products and services. Not only that, but over time, customers often become brand ambassadors for enterprises, helping enterprises to gain more customers. There is no more important marketing publicity for corporate brand publicity than word of mouth from customers.

5). Beyond sales, lifelong service

The "customer-centric" digital transformation is about more than just selling products. That's not enough! Enterprises need to pay more attention to: are customers using the products sold? How is the experience? Any questions? What can be improved? Will the customer continue to buy my product next time? The application of digital technology provides various opportunities for enterprises to interact with customers.

4. How to implement the "customer-centric" digital transformation?

"Customer - centered", its knowledge is easy, its action is also difficult.

Here's a look at some of the challenges you may encounter in "customer-centric" digital transformation and how to deal with them.

1). Figure out who the customer is

"The premise of being customer-centric is that we need to be clear about who our customers are and who decides the future development of our company. Then, value is measured on the basis of what value it can provide to the customer.”

-- Peter Drucker

Some say that customers are those organizations or people who buy our products or services. Is it so? For example, are Taobao's customer's merchants who set up shop on Taobao and pay service fees to Taobao? So we buy things on Taobao. Are we customers of Taobao or customers of merchants? So if I sign up for Taobao and don't buy anything on it, am I a Taobao customer? If I do not buy Taobao things but introduce others to buy, am I a Taobao customer? ...

In the digital age, networks and data connect everything. Who are our customers? The problem is no longer simple. Therefore, the first step of "customer-centric" digital transformation is to identify the customer base, followed by an accurate portrait of the customer.

2). Align your goals

This is crucial at any time. Transformation is not a matter of one person or department, and cross-sector collaboration is necessary for the success of digital transformation. Conflicting goals and different priorities can create two layers of planning and execution for digital transformation.

Digital transformation is a knowledge-intensive project, particularly requiring a person's ability. The traditional command and control type of management style will not be able to work effectively. Need all the team members to "take the customer as the center" the digital strategic objectives to reach consensus, let everyone know why they want to "take the customer as the center," and the reason for the transformation.

3). Don't use "customer focus" as a slogan

"Customer focus" is not a slogan, don't take it as a "slogan." Shout it in meetings, but in practice, it is still "me focus."

To achieve true "customer-centric," it is necessary to reform from the organizational level, change the traditional performance evaluation mode, and make "customer-centric" the enterprise's core value. In this regard, some SaaS enterprises have done a good job. Their sales performance KPI has changed from the original performance of selling software to that of customers willing to continue paying for SaaS services.

4). Shift the focus from competitors to customers

In the case of fierce market competition, knowing yourself and your opponent can help enterprises gain greater competitive advantages. In the past several decades of market economy, the study and analysis of competitors have been the main means of competition among enterprises.

However, in the digital era, significant changes have taken place in the living environment of enterprises, and enterprises are often defeated not by traditional competitors but by cross-border attacks from other industries. In this changing era, enterprises are only "customer-centric," which will pay more attention to customers and retain and attract more customers in the constant change of digital enterprise competition.

5). Get closer to customers

Insufficient customer data or inaccurate analysis will not help enterprise transformation and may bring misjudgment and misdirection to enterprise decision-making. In the beginning, you don't know where to collect accurate data. One best practice is to "go to the customer." Only by getting close to customers and getting together with them can we understand their needs and pain points, rather than product managers sitting in the office to think and guess.

At the end

Digital transformation is a systematic reform process, while customer-centered digital transformation is more rigorous. It is a dynamic combination of organization, process, performance, technology, tools, and executive feedback. At the same time, there will be successes and failures in transformation, and no enterprise can implement and complete transformation without experimentation. As long as the team is flexible enough to adapt quickly, learn from failures, optimize the process, and repeat. Ensure you keep the big picture in perspective and allow occasional failures.

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