What is Customer Centricity & Why is it Important?


Customer centricity is a powerful business strategy that puts customer needs at the heart of decision-making. Prioritising the customer experience can help you build stronger customer relationships.

Want to improve customer loyalty and drive sustainable growth? Continue reading to discover more about customer centricity and how it can help you.

What is Customer Centricity?

Customer centricity means putting customer needs first in your business. However, it’s not simply about thinking, “What are my customers looking for?” but rather considering customer needs and experiences when making any decision. This can be redesigning a product feature based on customer feedback.

This requires a shift in company culture throughout differing departments, from product development to marketing. Customer-centric thinking should filter throughout your company so that your products and services yield customer satisfaction and create loyal customers.

What is a Customer Centric Approach?

A customer-centric approach means going above and beyond meeting expectations. It’s about anticipating customer needs, actively listening to customer feedback and using these insights to drive business decisions.

Unlike a product-centric approach, which focuses on selling what the company produces, a customer-centric business focuses on providing customers with value and a positive customer experience at every level of output.

For example, while a product-centric company might invest heavily in developing new features without customer input, a customer-centric business would first gather feedback to understand what users truly need before shaping the solution around that.

To become a customer-centric organisation, your company needs to build a foundation of trust, empathy and responsiveness. Ask yourself the following questions:

  • What does your customer want? 
  • What drives them to make the purchases they do? 
  • What are the experiences of your most valued customers?

Characteristics of a Truly Customer Centric Company

To become a truly customer-centric company, there are a few best practices your business must adopt. Here are the five best practices of a truly customer-centric approach:

  • Hire for customer success: Customer success refers to proactively helping customers achieve their desired outcomes through your product or service. This ensures satisfaction and loyalty. Whether you’re offering a product or service, employees are always the backbone of customer interactions. Hire talent that can adapt to customer-centric thinking and understand the importance of customer-centric experiences. 
  • Prioritise relationships: Customer relationships with existing customers need to be maintained. Attracting new business is important, but maintaining trust and a mutually beneficial relationship with your customer base is necessary for customer retention.
  • Make customer data accessible: Having better access to customer data and insights will help you gain a better understanding of your customers. This will help ensure that future decisions are made with a sound strategy in mind for existing and new customers.
  • Link company culture to customer outcomes: Adopting a customer-centric strategy will motivate your employees when their actions can be seen in the results. Ensure the entire company keeps the customer’s perspective in mind in all their efforts for an excellent customer experience.
  • Define your customer experience strategy: Implementing a customer experience strategy is crucial for your company to enhance customer happiness and achieve sustainable growth while maintaining a competitive edge.

Employing a customer-centric culture in your company and its goods and services to meet the unique needs of your customers will help improve your customer experience.

Key Components of a Customer-Centric Strategy

To enact a customer-centric strategy, you’ll need to understand key components that will help propel your business to success.

Gather Customer Data

Tracking and analysing your customer feedback and data is important for making sure your customer-centric strategy is actually delivering the customer outcomes you intend. Building a customer-centric strategy will only work if it aligns with real-world expectations, so robust and reliable data is a must.

There are many ways to gather data and feedback across your customer-centric organisation. Useful sources include:

  • Input from customer service reps and support teams
  • Web and app analytics
  • Social media interactions and sentiment
  • Reviews on 3rd-party platforms
  • Data from loyalty schemes and referral programs
  • Engagement with brand content
  • Transcript analysis from customer calls, chat logs or SMS feedback
  • Observations from usability testing and user experience trials

Understand Your Customers Through Reliable Data Insights

Once you’ve collected the relevant customer data, the next step is to translate that information into actionable insights. Identifying trends in customer behaviour and linking feedback directly to business operations can help you develop a responsive, customer-focused approach. 

Using customer experience platforms or segmentation tools will give you a greater understanding of your customer base and will help you provide better customer experiences.

Key insights to uncover include:

  • Anticipating customer needs by tracking behavioural trends over time
  • Identifying preferred digital channels and how different customers use them (e.g. contacting customer service reps vs browsing for new products)
  • Finding the most effective strategies to improve customer relationships and increase ROI with little effort
  • Enhancing personalisation through customer segmentation
  • Discovering how to retain customers post-purchase and increase customer lifetime value through loyalty-focused strategies

Focus on Developing Your Strategy and Goals

Once you understand where the gaps are in your business strategy and which customer insights require attention, you can begin setting measurable goals that align with your business outcomes and positive customer experiences.

For example, if your customer service reps are consistently logging complaints about confusing loyalty reward terms, this is a sign that your most valuable customers may not be fully engaged in a program designed for them. This confusion can lead to lower redemption rates.

By clarifying the language and redesigning the loyalty dashboard to better reflect customer behaviour can improve customer retention and drive higher customer lifetime value.

This kind of feedback-driven change requires your customer-centric company to act across numerous teams:

  • Product teams refine the dashboard layout and reward structure
  • Marketing ensures customer communication preferences are met with clear messaging
  • CX teams collect post-action insights to measure impact
  • Analysts review KPIs such as reward redemption, repeat purchases and customer loyalty
  • Leadership aligns future business strategy around what delivers real customer value

Important Customer-Centric Metrics to Track

To effectively gauge your customer-centricity initiatives, it’s crucial to monitor specific key performance indicators (KPIs). These metrics provide insights into customer satisfaction, customer loyalty and overall experience. Here are some key metrics to consider:

  • Customer Satisfaction Score (CSAT): Measures customer satisfaction with a product or service, typically through surveys asking them to rate their experience on a scale. 
  • Net Promoter Score: Assesses customer loyalty by asking how likely they are to recommend your company to others.
  • Customer Effort Score: Evaluates the ease with which customers can interact with your company to fulfil a request or resolve an issue. Lower effort scores are linked to higher customer satisfaction and loyalty.
  • Customer Retention Rate: This represents the percentage of existing customers who remain with your company over a specified period.
  • Customer Lifetime Value: Estimates the total revenue expected from a customer throughout their relationship with your company. 
  • Customer Churn Rate: The percentage of customers who discontinue their relationship with your company over a period of time.

Benefits of a Customer Centric Approach

Adopting customer centricity offers numerous benefits that can significantly enhance your business’s performance.

Enhanced Customer Loyalty and Increased Revenue

When customers feel valued and heard, they are more likely to remain loyal to a brand. This loyalty yields repeat business and leads to higher spending. According to the 2023 Achieving Customer Amazement study found that 76% of customers are more likely to choose companies offering superior customer service, even if that means going out of their way.

Additionally, 48% prioritise excellent customer service over lower prices, highlighting the direct link between customer centricity and customer engagement and spending.

Competitive Advantage

Prioritising customer centricity helps set a company apart from its competitors. In the B2B space, building trust is especially critical. A Deloitte Digital benchmark report indicated that B2B suppliers demonstrating strong commitments to sustainability enhanced customer trust. This trust translated into greater customer loyalty, a willingness to pay premium prices and long-term purchasing commitments, offering a distinct competitive edge.

Improved Personalisation

Implementing customer centricity allows your business to tailor new products and services to individual preferences, leading to more meaningful product development. Qualitrics notes that rapidly growing brands derive 40% more revenue from personalised approaches compared to less successful counterparts.

Challenges of Customer Centricity

Transitioning into a customer-centric organisation presents numerous challenges that your business must navigate.

Organisational Silos

Departments working in isolation hinder the flow of customer information, making it difficult to deliver a unified and customer-focused experience. Breaking down these silos is necessary to completely understand and enhance customer value.

Empowering Employees

Frontline staff often lack the authority or tools to address customer complaints efficiently. This can diminish the effectiveness of a customer-centric marketing strategy. Providing employees with the necessary resources and decision-making power is crucial for maintaining a customer-centric brand. 

Adapting to Evolving Customer Needs

In an ever-changing market, customer preferences change rapidly. Maintaining customer centricity requires continuous research and flexibility to align products and services with current customer value expectations.

Integrating Advanced Technology

Implementing technology that supports a customer-centric focus can be complex and resource-intensive. By using the right tools, you’ll gain access to an outstanding consumer-centric marketing tool and keep customers happy. 

Cultural Resistance to Change 

Shifting from a product-centric to a customer-centric brand involves a significant cultural transformation. This is particularly prevalent where traditional systems are deeply embedded in operations and there is internal resistance to adopting new processes for customer centricity. Introducing new tools and systems that support a frictionless onboarding process for customers and employees can help ease the transition.

The journey to customer centricity isn’t without its obstacles. But those who embrace the challenge pave the way for stronger relationships, lasting loyalty and meaningful growth.

Transform Your Company into a Customer-Centric Business With Vypr

Becoming a customer-centric business starts with understanding your consumers at every step of the customer journey. That’s where Vypr comes in. Vypr is the world’s leading product intelligence platform that enables businesses to understand changing consumer behaviour through fast, cost-effective consumer insight.

With tools like our brand tracker, you can measure evolving brand perception and refine your focus for a more robust marketing strategy. Plus, our data quality methodology ensures that the insights you glean are both accurate and actionable, helping drive loyalty, increase retention and make better product decisions.

Ready to infuse your business with a customer-centric culture? Discover what customer centricity is and transform your brand today.