If we really want to be customer-centric, we have to be willing to turn customers away.

It sounds antithetical, I know. After working so hard to get people's attention, turning them away seems crazy. But if we want to pursue a solid business strategy, that is what it takes. Even the largest of companies can't afford to chase every dollar—only the dollars that align with their business strategy.

"You have to figure out which customer you want to delight and... become world-class experts in what delights them," explains Harvard Business School professor Michael Porter. "And then all those strays that wander into our lives, we just have to be nice and be polite, but that is not who we want to serve. It is very hard to do."

Strategy has always been about making choices, but in the age of the empowered customer, it has become increasingly challenging because our options have grown exponentially.

Serving Everyone Means Serving No One

Meeting every need of every customer may sound customer-centric, but that approach often leads to not serving any customers well.

In a time when competitive advantage is derived from remarkable customer experience, an "all things to all people" strategy leaves a company vulnerable to any competitor that can offer any segment of its customer base a better experience.

What True Customer-Centricity Is  

So, what does a customer-centric strategy look like today?

Helping Customers Achieve Their Goals

Customer-centricity can be defined as helping our prospects and customers achieve their goals in a way that makes sense for our organizations.

It is a focused strategy, in which we prioritize our efforts on those customer needs and desires that we can serve well and profitably.

In this coveted sweet spot, our solutions meet our prospects' and customers' needs and desires. We are operating in a place of shared value, playing on the same team, and pursuing similar goals. That is a powerful combination.

Of course, not all our prospects or customers are the same. We serve a heterogeneous and constantly changing population. As a result, the overlapping area of shared value we have with each of our customers and potential customers varies. This is where tradeoffs, choice, and opportunity come in to play.

Understanding the Value of Your Prospects and Customers

To be customer-centric, we must accurately identify the value of our prospects and customers to determine whom it makes sense for us to serve.

Fortunately, the abundance of data and analytics makes getting to know our prospects and customers better than ever. We can integrate and analyze our customer data so that we can predict the customer lifetime and referral values of our customers. With that information, we can define our markets and pursue more focused and profitable value propositions.

Michael Porter cites IKEA, the Swedish company that designs and sells ready-to-assemble furniture and accessories, as an example of a company with a well-defined strategy.

It understands its customers and what they value—and delivers it. IKEA says that's style, functionality, mix and match, and value. It offers little in the way of customer service—customers gather their own items in large carts from warehouse shelves, cart their items home, and assemble them—but that is an intentional part of its fully designed customer experience. IKEA's commitment to do-it-yourself furniture reduces its costs and offers a remarkable customer experience, which is why it is one of the world's largest furniture retailers.

IKEA may not be the company of choice for high-service/price-point customers, but for myriad people, including my daughter who just set up residence in NYC in anticipation of stating her first job, it offers the best deals.

Personally Treating Customers and Prospects

In addition to being demand-driven and focused, today's customer-centricity is about treating each of the prospects and customers we choose to serve personally. That means taking our customer understanding to the level of the individual and differentiating our products, services, and experiences accordingly.

Reebok, for example, allows its customers to customize the new Reebok CrossFit Nano 4.0. In the near future, three-dimensional printing technology, which makes it possible for anyone with access to a low-cost printer to create a solid object from a digital model, will dramatically transform our ability to customize and distribute products with our customers.

Similar adjustments are happening to services.

IKEA provides its customers with service options to match their individualized skills and budgets. Although its furniture comes unassembled, customers can choose to self-assemble or they can hire IKEA or recommended partners to pull the pieces together for them.

Amazon's Kindle Fire comes equipped with a "Mayday" button, which connects its users to a live tech-support representative right on their screen. (Animated tech advisors routinely receive marriage proposals, an indication of the button's usefulness!)

Individualizing customer content experiences and integrating those experiences across channels is increasingly essential.

Once again, today's data analytics are making this possible. They enable us to...

  • Understand what triggers action
  • Provide relevant options
  • Determine the next best action for each customer throughout their journey

Companies like Amazon are leading the way, setting the bar for every other company, and seeing the results in their revenue.

Constantly Seeking Improvements and Innovations

Finally, customer-centricity means agility, relentlessly pursuing improvement and innovation.

Agile involves constant iteration, testing the effectiveness of our content and experiences, learning what works, and then scaling as appropriate. It means staying close to our customers to uncover emerging and latent needs—the source of tomorrow's revenue—and testing hypotheses about demand with small-scale experiments that replace speculation with reality.

Each experiment builds upon the findings of the one that came before, making it possible for us to test hypotheses quickly and at a low cost, and make pivots to our strategy as necessary.

Our prospects and customers know customer-centricity when they see it. They feel at home. And as Dorothy said in The Wizard of Oz movie, "There is no place like home."

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image of Lisa Leslie Henderson

Lisa Leslie Henderson is an author, a teacher, and an advisor. She is also co-author of The Digital Marketer: Ten New Skills You Must Learn to Stay Relevant and Customer-Centric.

LinkedIn: Lisa Leslie Henderson

Twitter: @ljlhendo

image of Larry Weber

Larry Weber is chairman and CEO of Racepoint Global, an advanced marketing services agency. He is co-author of The Digital Marketer: Ten New Skills You Must Learn to Stay Relevant and Customer-Centric.

LinkedIn: The Larry Weber

Twitter: @TheLarryWeber