What are the Benefits of Customer-Centricity?
Imagine if you could give your customers that “day 1” feeling of excitement and potential throughout the entire customer journey.
That’s the goal Amazon CEO Jeff Bezos has for his customers. In his 2016 letter to Amazon shareholders, Bezos describes the preservation of this day 1 feeling as the biggest driver for pursuing a customer-centric approach. He believes customers desire “something better” and that your business needs to provide that kind of continued value. It’s a sentiment that has applications for exclusively B2B enterprises as well.
The benefits of customer-centricity lie in promoting a feeling within customers that your mutual partnership is always leading them toward that “something better.” As the digital transformation of business offers more options for customers, keeping things fresh and exciting is the key to long-term success.
3 Benefits of Customer-Centricity
The rise of the subscription economy has empowered customers to pursue short-term, low-risk commitments. This means the majority of customer revenue is now spread over months and years of recurring renewals rather than being captured in a single sales event.
To cultivate customer lifetime value in this environment, you have to view customer relationships as the mutual pursuit of growth over time. Customer-centricity means sticking closely to your customers throughout their journey, constantly monitoring their progress and looking for ways to improve their experience.
Some of the benefits of customer-centricity include its ability to:
- Promote new value
- Increase existing customer value
- Reduce churn
By applying the central tenets of customer-centricity to everyday customer relationships, you generate the value that is vital to both your success and that of your customers.
Customer-Centricity Reduces Churn
High renewal rates are essential for growth in a recurring revenue business model. If you focus on maintaining customer relationships long-term, you will see more renewals and increase customer value over time. As such, you need strategies to keep customers from wanting to stray.
Customer-centricity lowers churn by maintaining product relevance and a strong relationship with the customer. Since you’re always keeping customer goals in mind, you can monitor feature usage to be sure the product is helping the customer progress toward their goals. Or, if a feature is not providing value to a customer, you can suggest other features or use that information to improve the product. Beyond the features of your product, it’s also important to monitor your customer’s progress through each phase. For instance, did the user struggle to stay on track during onboarding or did they have an issue understanding a feature? If not handled effectively, issues like those could have a major effect on the customer experience during other stages.
By constantly monitoring the daily realities of the customer experience, you can be sure the customer is always receiving the value they desire from your product or service. For example, monitoring metrics known to have a direct impact on customer business success—think license utilization, feature adoption, and more—helps you implement proactive customer engagements. If a customer has low usage rates of features that could add value to their daily workflow, then your team can create campaigns to educate them about the feature and check in on their goals. This way, you can be sure the customer is getting the most out of your product and possibly prevent them from churning due to a lack of perceived business value. It’s also one reason why you need to really understand your customer’s business goals so that you can determine which features will add value for them specifically.
Customer-Centricity Increases Existing Customer Value
While new customer acquisition will always be an important part of business, existing customers are invaluable. After all, retaining a current customer costs less than gaining a new one and can lead to long-term recurring revenue.
As such, you need to prioritize the customer experience so that current customers receive continued value from both the product and their interactions with your team. Closely monitoring the customer experience provides insight into customer needs and reveals ways to improve product performance and the processes your company uses when interacting with them. This could come from an analysis that demonstrates a customer has maximized their license utilization, complex metrics that measure how product use leads to business success or feedback that escalations are not handled satisfactorily. Whatever the scenario, customer success depends on optimizing the customer journey and nurturing them every step of the way.
Customer-Centricity Promotes New Value
You should always be monitoring and nurturing customers to keep them satisfied. Happy customers are more likely to renew, but they are also more likely to become brand ambassadors who spread the word about your business—which may lead new customers to your doorstep.
Sales and customer success can work together to make sure that you’re both retaining current customers and gaining new ones. If information is being shared across teams, you can use insights that the customer success team discovers to also improve the sales process, and vice versa.
The benefits of customer-centricity, therefore, overflow your existing customer relationships and permeate into the realm of future customers. Establishing your enterprise as a responsive, personalized service focused on the growth of your customers will attract new people looking for that kind of experience.
Building a Culture of Customer-Centricity
Customer success is about understanding the everyday customer experience and constantly looking for ways to improve it. However, a customer-centric approach is also a great deal of work when done manually. After all, there’s a lot of data to gather, organize, and track, and it really adds up if you have many customers. Fortunately, achieving this is much easier with a customer success platform that collects all your customer data in one central location, making it easy to share information across your organization.
With a customer success platform, your team will have customer data at their fingertips and the ability to communicate early and often with customers. You can monitor customer health scores that provide an at-a-glance look into how a customer is doing. You can set up automatic engagements triggered by certain key events, such as an important goal completion. And it will alert you of warning signs that might indicate looming churn, such as low feature usage rates, so you can proactively intervene and retain customers. Simply put, such software makes it easier to effectively run a customer-centric campaign.
Customer-centricity promotes long term, mutually rewarding growth by allowing enterprises to maintain that day 1 feeling of future potential. Closely monitoring customers lets you better act on their behalf and achieve lifetime customer value.
Totango helps you better understand your customers. By reducing the complexity of the customer experience down to actionable metrics and measures, it helps enterprises take practical action to nurture customer growth. Request a demo or explore Spark to learn more.