Profitability through Customer Centricity

Defining, re-tooling, then re-defining the customer experience is extremely important.  A customer centric culture for an organization will lead to a positive customer journey and drive future revenue growth.

Imagine a guest staying at a hotel where all of their needs have been anticipated. The check-in process was seamless, the hotel employees greet them with a smile, and who knew bed sheets could be so soft. Or imagine this scenario, a guest goes to a party and the host makes everyone feel like they’re the guest of honor. They have everything they could ask for and even things they didn’t even knew they needed. Both of these experiences were so unforgettable that they can’t wait to go back!

Why should we imagine these scenarios? Let’s put it into this context. The hotel and host are a company, and the guests played their customer’s part. The company anticipated the needs of the customers and created an unforgettable customer experience. Everything was centered around the customer.   From products and services, all the way down to building positive experiences and relationships.

This is what I like to call customer centricity. The concept of customer centricity isn’t new, but it will make all the difference in the success of the company. Customer-centric companies are 60% more profitable than companies that don’t focus on customers. 83% of companies that believe it’s important to make customers happy also experience growing revenue. According to Jeff Bezos, Founder of Amazon “We see our customers as invited guests to a house party, and we are the hosts.  Its our job every day to make every important aspect of the customer experience a little better.”

Let’s talk about 3 benefits for organizations that choose to go all-in with customer centricity!

#1 Future Cost Savings

Always do the right thing for the customer, even though it might be a loss leader, will eventually lead to long term revenue gain. Think of it as an investment that will yield higher profits and save money. In the equipment finance industry, both organizations and personnel forge relationships that last for several years and this will lead to a loyal customer base. A 2% increase in customer retention is the same to profits as cutting costs by 10%.

So, focusing on retaining clients should be the priority, rather than spending extensive time and resources trying to attract new customers and new sales. Maintaining an existing client base is less expensive than acquiring new customers. According to Forbes, loyal customers are five times more likely to purchase again and four times more likely to refer a friend to the company.  

By setting the focus on building loyal customers, the organization is set up for further success in the future. “If you’re not listening to your customers, your competitors are.” Leela Srinivasan, CMO of Survey Monkey

#2 Brand Enhancement

On top of cost savings, customer-centricity also leads to more credibility and growth of the brand. Remember what was said earlier that if the customer is has a memorable experience, they’ll come back to return the favor. By building a loyal customer base, there is an established knowledge of experience and trust with the customer. This sustainability and invested trust that was created with the customer puts the company in the position of being viewed as a trusted industry authority. Customer centricity is the competitive differentiator that will make the organization stand out from the rest. Everyone wants growth for their organization, but customer centricity will give them growth that is sustainable.

#3 Creates a Virtuous Cycle of Learning

Being customer centric cultivates the growth of the companies’ goals aligning with the goals of their customers. Always study the data from the customer’s view. Use empathetic thinking by putting yourself in the customer’s position.  Continually seek ways to improve the organization by asking customers what can be done better as a service organization.

There’s always room for improvement. The 80/8 rule further supports this claim. In a study of over 400 organizations, 80% of companies believed they deliver a superior experience to customers while only 8% of their customers agreed. Everything has to start and end with the customer.  Steve Jobs, Founder and Former CEO of Apple says it best: “Get closer than ever to your customers.  So close that you tell them what they need well before the realize it themselves.”

While there are several ways to collect the customer’s data, here are the following methods that proved to be the most effective to ensure satisfaction.  

Customer Net Promoter Score

A customer net promoter score determines the likelihood that a customer would recommend your organization on a scale of 1-10, with 10 being the highest. The downside of this survey is unless the organization gets an 8 or higher on this survey it will not positively impact their score. However, when they study the data and diligently follow up with the customer to seek ways to improve their scores it goes a long way in securing a loyal customer. 77% of costumers view companies more favorable if they seek out and apply customer feedback. So, always remember to always follow up with the customer, the worse thing to do is survey the customer base and not respond. Always acknowledge the customers!

Root Cause Analysis

A company should always be looking at causes of friction in your customer experiences. This data compiled from both the employees and customers will go a long way in learning of friction in the system while streamlining efficiencies in the organization. A retrospective looks for answers to the following tasks: what did they set out to do, what actually happened, what did they do well, what didn’t work and most importantly what are they going to do next time to learn from this project.

Yes, this might seem like a time-consuming task however the data will find commonalities in where the organization can improve its processes.  Not only do retrospectives help identify ways to improve, they also allow your team the ability to celebrate employee successes. Always make sure that you are celebrating your team’s success and not always focusing on potential shortcomings.

Companies with initiatives to improve their customer experience see employee engagement increase by 20% on average. Forming close relationships with customers goes a long way in equipment finance.  At the end of the day people want to do business with like-minded people and it’s up to the employees to make sure that they are taking the extra time to get to know their customers.

It’s no surprise that employees are more engaged when they are building an authentic and genuine relationship with their customers. By doing this, the organization is constantly expanding the knowledge of their customers, while at the same time celebrating their employees’ insight and energy. 

“Your most unhappy customers are your greatest source of learning”- Bill Gates

Continual Check-Ins With the Customer

Continual check-ins with the customers will allow for time to clarify information that was received from them, as well as flush out any potential issues they may be facing their organization.  There might even be some additional projects that might come out of these meetings, as there are always a potential need that needs to be solved. Customers appreciate this proactive approach to solving their anticipated needs. Technology is ever evolving, and requirements are constantly changing. As an industry leader, it is the responsibility to offer the best and most innovative solutions to any situation that may impact the customer.

These methods demand a focused effort, but all the hard work will pay off. The company will be in a constant state of growth in all stages, which results in a virtuous cycle of learning. This advocates for change to improve competitiveness and sustainability for the entire organization. The benefits are priceless, and the customer will also reap the benefits as well.  

To sum up everything that we discussed, customer-centricity saves money, increases growth in the market, and creates a virtuous cycle of learning. More importantly, it keeps the customer happy which leads to a relationship that mutually benefits both parties. Invest in what will improve the customer journey and they will keep coming back for more. Customer centricity is a vital practice for any organization that wants to have sustainable growth and a competitive edge in their field.