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What does customer focussed or customer-centric business mean?

Firstly, let’s take a look at how customers attribute profit to a business; research has shown that many businesses operate according the 20: 80 rule (Angel customers and Demon customers by Larry Selden & Geoffrey Colvin). 20% of a business’s customer base generates 80% of its profits. What’s even more interesting is the 80% of less profitable customers also contains a big percentage of loss makers, which are costing businesses money by being on their books.

The 20:80 rule is only a rule and all runes can be broken, and this is where customer focus comes in. By building a business around its’ most valuable customers, a business can change the ratio of 20:80 to a greater percentage of profitable customers; this is what’s known as being customer centric or customer focussed. Valuable customers are part  every aspect of customer-centric business from its core strategy to its day to day operations

Why bother thinking about being customer focussed?

99.9% of successful businesses have one thing in common, they’re all customer focussed and customer-centricity forms a key part of their business strategy.  They also have the following advantages over their less customer focussed competitors:

A profitable customer base Clear understanding of how to grow your business and profits, based on a deep knowledge of your customers An ability to respond quickly to your customer needs and changes in your business environment A faster, more efficient organization, as everyone beats to the same drum Better protection in downturns, due to more loyal customers

In the next few pages, we’ll show you how you can evaluate your business for customer centricity and take steps to become customer centric.

What’s under the hood of a customer focussed business?

They know their customers: they understand their value, needs and they listen to them Customer centric business strategy: the business is built around their core customers Customer culture: employees live and breathe their customers Customer metrics: the business tracks its customers as part of key business performance tracking

How can I check if my business is customer centric?

Take a look at the questions below and answer them Yes or No for your business:

Do you have a clear idea of  who your customers are and what are their needs? Do you know which of your customers are most valuable to you? Does your business strategy / mission mention anything about your customers? Do you hire / develop your staff with your customers in mind? Do you have a process by which customers and employees can give feedback and review / act on this within your business? Do you have a customer complaints process which enables quick resolution of customer problems? Are all your employees empowered to deal with customer complaints? Do you know how satisfied or loyal your customers actually are? Do you provide specific services or incentives for your most valued / loyal customers? Do you deliver what you promise in your advertising / marketing to your customers?

So let’s take a look at how your business did:

Customer Nirvana: if you scored 10, you’re all good and just need to keep doing what you’re doing. Doing well: if you scored 5-10, you’re in pretty good shape and just need to refine your customer focus within your business Must do better: if you scored less than 5, its time to hit the drawing board, and look at what you need to do to make your business more customer-centric.

In part 2, I’ll be giving you an insight into how to build a customer focussed business. If you want to find out more before the next article is published, go to my site where I have provided a free guide on buiding a customer focussed business

Phillip Hunt
Founder of Ysatisfy customer satisfaction consultancy
www.ysatisfy.com