Customer centricity instead of growth at all costs: why service is decisive now
"The customer is king" – a motto that's still common in retail. But e-commerce companies in particular can benefit from this attitude. Competition in e-commerce is fierce, and customers switch to the competition faster if they have bad experiences with your customer service.
Many fast-growing companies initially focused solely on growth and transformation to move their business forward. Once these growth opportunities were exhausted, they had to come up with other ways to increase revenue and found them by shifting their efforts to efficiency and profitability. But what do you do when these methods are exhausted too?
Over time, many companies have lost sight of their greatest potential: their own customers! This shows in inadequate self-service portals and long queues at customer support. A dangerous game, considering that it often takes just one negative interaction with a company to put customers off for good.
So from now on, it's back to the roots – or rather: bring on customer centricity!
What is customer centricity?
Customer centricity isn't an isolated tool companies can use – it's a company philosophy. Customers are put at the center. To increase customer satisfaction and strengthen your customers' loyalty, the company needs to move away from a product-oriented approach toward customer centricity. If the product is at the center, customers can quickly stay away when there are production errors or unmet expectations. For you, your customers should be at the center, and every decision your company makes should be made with your ideal customer in mind. The result is a loyal customer base that celebrates your wins with you and good-naturedly accepts small mistakes.
For a quick check of whether your company takes a customer-centric approach, ask yourself these questions:
Is it easy for customers to do business with us?
Can our customers quickly see a benefit when they invest in us?
Is it pleasant for our customers to work with us?
Can you answer yes to all of them? Then congratulations! You're on a very good track. You may also have heard of the following metrics, which show you how to measure your customer centricity:
How can I measure customer centricity?
To find out whether it's easy for customers to do business with you, look at customer lifetime value (CLV). It shows how profitable your customers are for your company and how long they stay loyal. So if customers keep coming back to buy from you, that's a good sign of customer centricity.
Customers also shouldn't have to wait for you. Well-equipped self-service portals or chatbots can help your customers help themselves. The ticket deflection rate (TDR) measures how helpful your self-service offering is. It shows you how many customer inquiries to your support were deflected by self-service resources. If your TDR is very low, you should consider a chatbot that can intercept many inquiries before they overload your support team.
The customer retention rate (CRR) measures how long you can retain your customer base over a given period. This metric is especially important for companies with subscription models or in highly competitive niches. There's hardly a more direct way to measure how well your company satisfies its customers.
Which data feeds into the customer health score (CHS) varies from company to company. How often do customers use your product? How often is your support contacted? What does your customers' payment history look like? Do your customers interact with your marketing content? All of this can feed into the CHS. The CHS can show you early on whether certain customers are thinking about canceling or losing interest in your company. So before the CHS drops below a certain threshold, your customer service team can contact these customers and convince them to stay.
To measure both the internal and the external view of your company, the employee engagement score (EES) and the net promoter score (NPS) are a good fit. The EES shows how motivated and productive your employees are, whether they identify with the principles of customer centricity and whether they're willing to go the extra mile for your customers. A high NPS means customers are willing to stand up for your company and recommend it. To achieve a particularly high score, your company needs excellent customer service and a customer-centric marketing strategy, which we'll come back to later in this article. But first: what are the benefits of customer centricity?
Benefits of customer centricity
Focusing on your customers' wishes and needs leads to higher customer satisfaction and greater loyalty to your company. When your customers feel comfortable with you, they become regular customers. A loyal customer base not only leads to stable revenue in the long run, it also saves you some marketing costs. In the age of influencer marketing, recommendations from people you know are becoming more and more important. The word of mouth your customers generate for you becomes all the more valuable. In a way, your customers become an extension of your marketing team.
Regular customers also buy from you more often and usually aren't put off by higher prices, which has a positive effect on your customer lifetime value. Even when you make changes to the product, regular customers are less likely to turn away. Overall, a customer-oriented approach leads to higher, more stable revenue in the long term.
And don't forget: customer centricity sets you apart from the competition, which can become an excellent unique selling point for your company. When customers are satisfied with your company, they're also satisfied with your products and services. A stable customer base also lets you focus on additional opportunities for innovation and so keep standing out from your competitors.
Customer centricity as a marketing strategy
A customer-oriented marketing strategy is above all about putting yourself in your customers' shoes. You may have worked for your company for years and know its strengths and weaknesses, why your product is the best option for your customers and what sets you apart from the competition. But now you have to package all that experience so that new customers see at first glance what makes your company special and why your product is the best choice for them. If you don't manage that, potential new customers may quickly turn to the next offer.
If a company's marketing focuses only on generating leads, it inevitably leads to marketing tactics that nobody enjoys. That may work in the short term, but in the end it always damages your company's reputation, calls its integrity into question and leads to more and more complaints than positive reviews.
So your marketing should always focus on topics that appeal to your customers and above all show your company's mission. The secret of exceptional content marketing is content your customers find genuinely useful!
Emotions and business? Absolutely!
The most effective way to increase customer satisfaction is to bind your customers to you on an emotional level. If you manage that, you can build trust, which inevitably leads to loyal customers.
If you think connecting on an emotional level means a lot of work for you, rest assured: with AI chatbots, your customer support can be personal, emotional and fast without creating extra work for your service team.
With natural language understanding (NLU), chatbots can understand and interpret human language and respond in the context of the conversation. Emotional AI can pick up on subtle cues about how your customers are feeling as they interact with your chatbot. Are they satisfied or frustrated? Do they understand your chatbot or are they confused? Your customers feel better understood, don't get one-size-fits-all answers and receive individual support. If the chatbot is ever out of its depth, it can hand the inquiry over to your service team via smart human handover. That way, no inquiry goes unanswered and every customer is looked after individually.
Conclusion
Customer centricity is and remains a company philosophy that can only work if all employees have internalized it and act accordingly. It's a long-term strategy that requires constant adjustment and attentive observation of your customers.
AI tools such as chatbots can take a lot off your hands, but you have to take care of implementing them and make sure the chatbot has all the information your customers need. That way, it becomes an important pillar in your pursuit of customer centricity.
If you work decisively on implementing customer centricity and the effort seems too high at first, it's nothing compared with the great benefits you'll gain from this company focus.
The result of customer centricity is a steadily growing, loyal customer base that stands by your company through changes and secures stable revenue. Your regular customers also become part of your marketing team by recommending your company to friends and family. You can then use these savings in customer acquisition to develop your product further and take innovative paths.
