What is customer-centricity? And why does it matter?

Customer-centricity is a marketing strategy with the primary goal of acquiring high-value customers and maximizing the value of every customer relationship. It acknowledges that there is no "average" customer and that the differences among customers represent an opportunity to build more long-lasting, profitable relationships through relevant communication.

Customer-centricity stands in contrast to other common marketing strategies, such as product-centricity (competitive advantage through superior product design or merchandising) or channel-centricity (focus on achieving dominance in one or more channels).

Moreover, customer-centric marketing isn't new, but in many ways, it represents a return to a much earlier era of marketing: the personal relationship between neighborhood shopkeeper and customer.

Being customer-centric also has made a resurgence in recent years, fueled in large part by e-commerce tools.

Here's why being customer-centric matters.

1. New tools offer visibility into individual customer behavior

Throughout much of the 20th-century, mass retailers didn't know who you were or what you did once you completed the check-out process. Often, they lacked even the ability to tie together multiple purchases that you made over time.

The loyalty card revolutionized customer-centric marketing in the 1990s by offering a way to track and link an individual customer's transactions. But Web technology has gone leaps and bounds further, creating an unprecedented opportunity to collect information on shoppers' behavior, interests, and preferences... and to create a single unified vision of the customer across multiple touchpoints.

2. Customers are interacting with you in more ways than ever before

Web technology has also offered new opportunities for customers to engage with brands, transforming the "broadcast" mentality of mass advertising into a dialog between retailers and customers. A customer who pins an apparel retailer's Capri pants on Pinterest and likes every Facebook update is different from a customer who responds only to steep discount emails. That data represents a potential windfall for retailers: It gives them the opportunity to tailor communications to different customer segments in a more meaningful and relevant way.

3. Customers expect a single, seamless experience across different platforms, devices, and channels

Gone are the days when mobile was used primarily for a quick in-store price comparison. Holiday 2013 e-commerce data shows that customers are increasingly using mobile devices for exploration and engagement. As shoppers feel increasingly at home across both digital and offline environments, retailers that understand how and when to engage with key customer segments will be best positioned to win their business—in the long run.

4. Traditional product-centric strategies are increasingly vulnerable

As author Peter Fader argues in Customer Centricity, globalization and the unprecedented rate of technological advances have created cracks in the foundation of product-centric strategies.

The "ever-more demanding consumers of today have every reason to be demanding; the entire world and all of its goods and services are now at their fingertips," Fader says.

Nowadays, customers can find virtually any product online with the touch of a button. Retailers can no longer rely on geographic exclusivity or even proprietary technology to drive long-term profitability. To establish meaningful and lasting competitive advantage, retailers must build their businesses around communicating the right message to the right customer at the right time.

5. The explosion of metrics has led to inefficient channel-centric strategies

Opens, clicks, impressions, likes, retweets—the complicated digital advertising ecosystem has led to a profusion of metrics to track and optimize. But has it led to smarter spend? After all, optimizing in isolation can often lead to misguided investment decisions. Without a clear sense of the role that each channel plays in the purchase process, individual channels often all look to maximize their own metrics at the expense of overall profitability. The solution? A channel strategy built on an understanding of distinct customer segments—and how to communicate with each to maximize their long-term engagement and loyalty.

* * *

Ultimately, customer-centricity is both an opportunity and an imperative for retailers wanting to thrive in the 21st-century marketplace. By orienting their business around customers rather than products or channels, retailers can ensure that their marketing strategy is aligned around their single most valuable long-term investment.

Enter your email address to continue reading

Five Reasons Marketers Should Be Customer-Centric

Don't worry...it's free!

Already a member? Sign in now.

Sign in with your preferred account, below.

Did you like this article?
Know someone who would enjoy it too? Share with your friends, free of charge, no sign up required! Simply share this link, and they will get instant access…
  • Copy Link

  • Email

  • Twitter

  • Facebook

  • Pinterest

  • Linkedin


image of Jordan Elkind

Jordan Elkind heads the customer success team at Custora, a customer-centric marketing platform for e-commerce retailers.

LinkedIn: Jordan Elkind