CUSTOMER CENTRICITY IN BUSINESS

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The Interview with Peter Fader & Sarah Toms:

• A key term is CLV, which stands for “customer lifetime value.” Taking this into account, it is almost always more profitable to retain existing customers versus acquiring new customers.
• There are high-, mid- and low-value customers. In your customer base, there are fewer high-value customers and losing them could drastically, negatively impact your business profits. There are more low- and mid-value customers. They are easier to acquire and losses don’t hurt your business as much.
• The paradox of customer-centricity is that despite these facts, many companies still expend a lot of effort into acquiring and retaining the risky high-value customers rather than retaining the dependable low- and mid-value customers. Be careful with how you manage your customer base.
• Don’t prioritize price over customer experience. Focus your efforts into creating a valuable experience first and foremost, and you will find that a loyal and profitable customer base will follow.
• Wait to create loyalty programs until you learn more about your customer base, their spending habits, and their wants and needs. Also, assess the kinds of customers you’re attracting from your marketing campaigns. Then build your loyalty program using this data.
• Most loyalty programs are really marketing programs. For instance, “Buy nine and the tenth one is free!” True loyalty involves an emotional connection.
• Customer heterogeneity refers to differences between customers. You must recognize these differences and not attempt to create a one-size-fits-all approach to use across your entire customer base. Celebrate the differences that elevate your customers above “average.”
• The Customer Centricity Manifesto consists of four major areas:
  • Customer Heterogeneity
  • Cross-Functional Uses of CLV
  • Metrics That Reflect Customer Equity
  • Clear Communications with External Stakeholders

Quotes:

“Be careful with how you manage your customers. Make sure that you’re not accidentally firing your customers. That’s not what customer-centricity is about.” – Sarah Toms

“Recognize the heterogeneous nature of your customer base and don’t create a one-size-fits-all approach.” – Sarah Toms

“When it comes to your customers, don’t celebrate averages. Celebrate differences.” – Peter Fader

About:

Sarah Toms is the executive director and co-founder of Wharton Interactive. She works with The Women in Tech Summit and techgirlz.org to support women and girls in the technology field. Recently, she co-authored The Customer Centricity Playbook with Peter Fader.

Peter Fader is a professor of marketing at the University of Pennsylvania’s Wharton School. He is the author of Customer Centricity: Focus on the Right Customers for Strategic Advantage. Recently, he co-authored The Customer Centricity Playbook with Sarah Toms.

Shep Hyken is a customer service and experience expert, New York Times bestselling author, award-winning keynote speaker, and your host of Amazing Business Radio.

This episode of Amazing Business Radio with Shep Hyken answers the following questions … and more: 

1. What is customer-centricity?
2. How can I be customer-centric?
3. How can I create customer loyalty?
4. Does price matter more to customers than experience?
5. How can I use data analytics and metrics to improve my CX?