Although customer-centricity is one of the most mentioned terms in today’s business, it doesn’t mean that is new as a concept.  Back in 1954, Peter Drucker, one of the most influential and widely known thinkers of management, in his book, The Practice of Management, wrote that “it is the customer who determines what a business is, what it produces, and whether it will prosper”.

According to Peter Fader, Professor of Marketing in the University of Pennsylvania, customer-centricity is “the delivery of the organisation’s products and services in a way that meets current and future needs of the customers in order to increase the financial value of the firm in the long-term”. Moreover, as Shah, Rust, Parasuraman, Stelin and Day point out in a relevant article (2006), “the true essence of customer-centricity lies not in how to sell products but rather on creating value for the customer and, in the process, creating value for the organisation”.

With the above in mind, when marketers were asked from the American Marketing Association to rate their own company’s level of customer-centricity, 76% of companies gave themselves score above 60%, so for sure they must be thinking that they were doing a great job in this field.  Unfortunately, customers don’t share the same views.  Research and advisory company Forrester measure in their customer experience index how do customer-centricity is rated from the customers, and the results showed that only 18% of them placed companies in the top two categories (i.e. “Good” and “Exclellent”).  Therefore, saying that you are customer-centric is one thing, but being customer-centric is another.  So, why does customer centricity is easy to assert, but difficult to build and sustain in organisations?

For starters, we need to clarify that good customer service, which is there mainly because the clients are faced with issues, should not be confused with putting the customer at the center of the decisions that a company makes, which is what customer-centricity is all about.  On the contrary, it is most likely that the customers wouldn’t have to find out how good our customer service is, had they been positioned in the epicentre of our attention in the first place.

On top of that, despite all these assertive declarations from companies regarding their undisputed commitment on customer-centricity, their managers continue to run product-centric departments, the basic philosophy of which is to sell products.  In such cases, the selling approach is principally to highlight the features and advantages of the product/service and the main question that is being asked is “how many customers can we sell this product/service to?”  Organisationally—wise, the focus is mainly internal, and as far as reporting is concerned, key performance indicators are not monitoring customer-centric activities.

According to a study from the Chief Marketing Officer Council there are a number of challenges that prevent organisations to become more customer-centric, based on the views of their own people.  The biggest challenge that is mentioned is the silo mentality between different functions, followed by not having a culture that is aligned with customer needs.  Moreover, people reported that the absence of technology platforms to manage data and not having a common definition of customer-centricity, are also key factors that are contributing to this situation.

“Is there anything that we can do about it?”, I hear you ask.  Please stay tuned, as we will be further discussing customer-centricity in the second, and last, part of this blog post.