Saturday, January 25, 2014

Apalah 'Customer centric' itu ?


What does it mean to be “customer-centric” as a business? Assuming that you start with a quality product and service, being customer-centric means understanding the customer’s point of view and respecting the customer’s interest. You fix problems, handle complaints, and remember individual customer preferences.
But customer centricity isn’t merely a matter of adding up these different components of quality, service, insight and responsiveness. You can introduce all these ideas into your business model, but if you don’t grapple with your company’s most basic strategic objective, then sooner or later your efforts will fail.
In the past I’ve found it helpful to explain the contrast between customer centricity and product centricity by using a diagram, illustrating visually that these two strategies actually represent different “dimensions” of competition. If you think about it, for a business to be competitively successful, it must meet two conditions:
  1. It must be able to satisfy a customer’s need, and
  2. It must have a customer who wants that need satisfied.
So first we should visualize a “marketing space” defined by the customer needs a business can satisfy (the vertical dimension) and by the number of customers it has (the horizontal dimension). Then we can map customer centricity and product centricity on the same diagram:
Product-centric competition is based on having a product that meets a certain customer need, and then trying to find as many customers as possible who want to have that need met. Success is measured by the length of the horizontal arrow (i.e., how many customers are reached). In competitive terms, this would represent your company’s market share.
But customer-centric competition starts with an individual customer and tries to meet as many of that customer’s needs as possible – across all the company’s divisions and business units, and through time (i.e., meeting a customer’s needs week after week, month after month). And the length of the vertical arrow represents your share of customer.
From this diagram it should be clear that customer centricity doesn’t actually conflict with product centricity, because they aren’t opposite in direction but orthogonal, so they have little or no effect on each other. That is, the strategies and tactics you follow to be more product centric will have little effect on your share of customer, while customer-centric strategies will have little effect on your market share.
By using the graph to contrast customer centricity and product centricity, the difference between these two competitive strategies is now obvious:
A product-centric competitor focuses on one product at a time and tries to sell that product to as many customers as possible.
A customer-centric competitor focuses on one customer at a time and tries to sell that customer as many products as possible.
But there are two more points worth explaining about the diagram:
First, on this two-dimensional marketing space, the vertical dimension isn’t defined by products, per se, but by customer needs. So when you think about your “share of customer” don’t just think about it in terms of wallet share. Instead, ask yourself what share of this customer’s needs are you actually meeting? What share of the customer’s life are you participating in? And what additional products or services might allow you to increase your participation in the customer’s life, overall?
Second, the financial objective for a product-centric competitor is to maximize the value created by each product, while the financial objective for a customer-centric competitor is to maximize the value created by each customer. But unlike products, customers have memories. This means that the business a customer generates for you tomorrow, either as a repeat customer or as a reference for other customers, is based largely on their memory of how well they were treated today.
The implications of this final distinction are very important, because customers are the link between the profit you make today and the profit you are likely to make tomorrow. The customer relationship directly connects today's profits and costs to your company's overall shareholder value.
Another way to think about it: Tracking a customer relationship is like watching a movie in progress, while tracking your product sales involves taking snapshots of the business situation at different times.


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