Far gone are the days when it was enough for businesses to rely on their products as the main driver for acquiring, retaining, and activating customers. This product-centric approach (where businesses focus on developing high-quality offerings and expect the customers to follow) is fizzling out. Nowadays, in this modern and highly competitive market, it is crucial for businesses to prioritise the understanding of customer needs, preferences and experiences over simply developing superior products. This article explores the importance of a customer-centric approach and how organisations can shift to customer centricity through practical strategies and the development of core capabilities.

A customer-centric approach places the customer at the core of the business strategy, aiming to improve the customer experience throughout their journey. It involves understanding the entire customer journey map, anticipating customer needs, creating solutions for those needs and ensuring customer experience is enhanced at every customer interaction. This approach is essential because it (1) increases customer retention and loyalty, (2) gives the company a competitive edge in the market, and (3) drives up a company’s revenue in the following ways:

Enhanced Customer Retention and Loyalty

• Companies that provide exceptional customer experiences are likely to retain their customers and reap the rewards of repeat purchases
• Being customer-centric and focusing on customer satisfaction allows companies to earn the trust and loyalty of customers. Satisfied customers are also more likely to recommend the company to others
• Customer retention enables the company to save on acquiring new customers, which usually costs between 5 to 25 times more than retaining existing ones.

Enhances Competitive Advantage and Differentiation

• Delivering exceptional customer experiences enable companies to stay ahead of market trends and adapt quickly to changing customer demands
• Customer-centric companies also improve their brand value and build a favourable perception in the public.

Revenue Uplift

• By aligning products and services with customer needs, companies can enhance their value proposition and drive higher sales
• Customer-centric companies that invest in customer experience see revenue growth 1.7 times faster than companies that don’t
• This approach also increases the customer lifetime value (CLV) through increased purchases, cross-selling and up-selling, as well as reduced customer churn. As evidence, a study by Qualtrics states that 60% of customers will be willing to buy more if they feel cared for.

Shoprite Group

The Shoprite Group is the leading retailer in South Africa and has achieved remarkable growth and success in the African market. One of its strategic priorities is to become a smarter company by leveraging advanced analytics and technology to guide decision-making and optimise customer experiences. Through this approach, the company culture is evolving to prioritise customer-centric decisions, ensuring that customer needs are at the heart of all company initiatives, while leveraging the use of customer data to drive continuous improvement.

Notable initiatives by Shoprite to enhance customer experience include:

• Checkers Sixty60: An on-demand delivery app demonstrating optimised omnichannel integration to enhance shopping experiences. Providing customers with the convenience of shopping from home and a promise of delivery within 60 minutes, making shopping more accessible
• Data-driven pricing and product availability: Shoprite uses the data gathered from the Xtra savings rewards program to influence pricing decisions and ensure on-shelf product availability. Shoprite also allows its suppliers to use the customer data to adapt their sales and marketing strategies to better suit customers
• Speciality store formats: Shoprite has opened more than 15 speciality stand-alone stores (such as Petshop Science, Little Me, Outdoor, and UNIQ) for specific product categories. This enhances the shopping experience by providing a tailored experience in each store. Not only does this create additional customer touchpoints for the group, but it also offers additional data on customer behaviour and preferences.

Shoprite has declared that having better insight and understanding of their customers has allowed them to optimise their business processes by catering for what their customers want. This customer-centric culture has allowed them to optimise their supply chain, reduce costs, and improve customer satisfaction.

The Foschini Group

The Foschini Group Limited (TFG) is one of South Africa’s leading retail groups with a diverse portfolio of brands across various market segments. TFG has prioritised a customer-centric approach by integrating innovative strategies and technologies to enhance customer experience and drive business growth. TFG commits to being a customer-first company by placing data analytics at the centre of decision-making, embracing technologies and innovation to deliver the best shopping experiences, and continuously monitoring the impact of its business decisions on customer experience.

Notable initiatives by TFG to develop a customer-centric approach include:

• The Bash platform: TFG established a leading online platform to seamlessly integrate brick-and-mortar stores through a digital platform and create exceptional omnichannel experiences
• Advance data gathering: TFG has launched a technology-based customer satisfaction tool to gain more insight into customer needs. The TFG Rewards system also serves as a crucial tool for gathering customer data and insights. Notably, TFG Rewards members spend 1.5 times more and are 1.4 times more profitable than other customers
• Employee enablement: TFG has made investments over the past few years into change management and enabling employees to embrace a customer-centric culture.

By leveraging data-driven insights, creating omnichannel experiences, and fostering customer loyalty, TFG continues to enhance its market position. The TFG Rewards program, with millions of members, has boosted customer engagement, loyalty, and revenue. By leveraging data insights, TFG achieves an understanding of its customers, effectively addresses their needs, and delivers optimal outcomes.

Designing for customer needs

The foundation of designing solutions for customer needs begins with a deep understanding of who your customers are, what they want, and how they interact with your products or services. Customer feedback is the cornerstone of the design process involving visualising the entire customer journey to understand all the touchpoints and pain points of the customer journey.

Anticipating customer needs

With a deep understanding of the customer, companies can use trends and insights to stay ahead of customer demands and anticipate future needs. The main focus is thinking about addressing customer pain points before they arise. This proactive approach can lead to the company creating solutions which the customer may not have even known they wanted. An example is Shoprite which created Checkers Sixty60 in anticipation of customer needs, even though this was not something the consumers or the market had declared as needed.

Customer Understanding and Insights

The effectiveness of decision-making comes from how well companies understand their customers, including their needs, preferences, and behaviours. This involves having effective voice of the customer (VoC) programs to gather actionable insights, having capabilities to analyse data and lastly understanding the company’s customer segments and personas to tailor strategies for effectively.

CX Strategy

A clear and well-defined customer experience (CX) strategy is vital for driving customer-centricity into the company. This strategy should also be aligned with the company’s vision and objectives. To effectively communicate and deliver on its customer value proposition (CVP) the business must focus on what customers value the most and how they want to receive that value.

Experience Design

After gaining a deep understanding of customers’ needs throughout their journey, the company must actively design and enhance experiences across all touchpoints. This requires establishing processes to facilitate and manage innovation, ensuring that customer feedback is continuously incorporated into the development of solutions.

Customer Centric Culture

Building a customer-centric culture is essential as employees are a significant part of delivering great customer experiences. The company needs to equip employees with the necessary skills and support to deliver customer experience. This involves providing training, implementing incentive programs and creating a supportive work environment. Employees need to be encouraged to prioritise customer needs and take responsibility for enhancing the CX.

Tracking and Metrics

Measuring the progress and impact of CX initiatives is critical to ensuring they align with company objectives and are worth the investment. Effective tracking and measurement of customer experience success are essential for driving continuous improvement. Some key customer metrics to monitor include Net Promoter Score, Customer Satisfaction Score, Customer Effort Score, Customer Sentiment, Customer Emotional Intensity, Retention, Purchase Loyalty and Customer Churn.

By focusing on customer needs, businesses can boost revenue, strengthen customer loyalty, and stay competitive. Let us assist you to evaluate and improve your customer experience.