Are you really customer-centric?

How would you score yourself on how customer-centric your business is? 8 out of 10? Maybe higher? After all, you have a great offering and service team and you’re developing products that your customer base wants, right?

Maybe. In their book, The Customer Centricity Playbook, Peter Fader and Sarah Toms explain that thinking of your customer base as a monolithic, single and never-changing entity is simplistic and doesn’t quite go far enough in today’s competitive landscape.

Instead, we should stop wasting our limited resources on trying to serve all our customers well and instead focus on those who are contributing most to the business. That doesn’t always mean those who are spending most with you (although that might be the right metric for your specific case).  It might also be those who are supporting others in succeeding with your product, spreading the word about you, or contributing to the offering. It’s only once you’ve worked out who and what are the most valuable for your business (be it LTV - lifetime value - or contribution) that you can genuinely start developing a customer-centric strategy.

At the recent SubscriptionX conference, we heard about Butternut Box, a dog food subscription service which, much like many subscription offerings, originally had a one-size-fits-all approach to their offer and price. But then they  figured out that dogs actually come in a far greater range of shapes and sizes than their owners, and a Great Dane needs a lot more food than a chihuahua. So they revisited their pricing strategy, taking into consideration the specific needs of their customers (well actually their pooches) and made sure they were serving best those who spent the most with them. A few months in and costs to acquire customers are still the same, but they are now enjoying much higher retention rates and margins than before.

So, if you haven’t done so already, identify your most valuable customers and ask yourself if you are serving them as well as you can be. If not, how can you start to? Try not to get distracted by the noise of the whole and drill down on specific customer groups.

This newsletter is brought to you by www.customer-ization.com. We work with B2C brands to activate and empower customer communities to deliver growth, retention and satisfaction. To find out more why not book a call to explore how we can help you harness your customers’ enthusiasm and achieve a step change in your business outcomes.