Customer-centric is an approach to doing business that focuses on providing a positive customer experience both at the point of sale and after the sale in order to drive profit and gain competitive advantage. The philosophies and operations of customer-centric businesses revolve around their most valuable customers and making sure they're happy.
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Dr. Peter Fader, in his book Customer Centricity: Focus on the Right Customers for Strategic Advantage, explains that because not all customers turn out to be profitable, businesses that seek to be customer-centric and gain strategic advantage should identify the best customers and focus on building their products and services around the needs of those specific individuals. This is achieved by gathering customer data from multiple channels and analyzing it to better understand and categorize customers.
One way to figure out if a customer is high-quality, according to Fader, is to calculate their customer lifetime value (CLV), which predicts the net profit a business will acquire from its entire future relationship with a customer. High-quality customers are those who stay loyal to the company and don't leave unless given a very strong incentive to do so. These customers have a high CLV and collectively have a low attrition rate. Customer-centric organizations strive to acquire, retain and develop this type of customer by enhancing their experience.
Continue Reading About customer-centric
- 1. Author Patricia Seybold discusses her book on how companies are engaging customers in the product development process.
- 2. This book excerpt lays out how to build a long-lasting customer-centric culture in your organization.