NobelBiz | Blog Customer Centricity: How to Build a Strategy Around Your Clients? Published on 09. November, 2021 The Customer Centric strategy is now on everyone's mind, even for contact centers experts and customer relationship specialists. But why is there such a sudden interest in this age-old practice? In recent years, there has been a paradigm shift in the business world. Consumers no longer want to compete for the lowest price. Instead, they value quality and relationships above all else. In reality, the goal of companies is no longer to sell a product or service but to provide a quality customer experience that caters to the wants and aspirations of their target audience. So, how can you put a Customer Centric approach into action? In this article, we will go over the concepts of this strategy, its benefits, and the tactics and technologies you can use to help it expand. Are you a customer centric or customer oriented contact center? To begin, let's define two phrases that are frequently used interchangeably: "customer centric" and "customer oriented." Indeed, there is a huge distinction between the two! What defines a Customer-focused company? Being customer focused entails arranging your organization such that reacting to client requirements and enhancing customer satisfaction are top priorities for everyone. This suggests that the company's business model must constantly alter and change. Its goal must no longer be to sell items, but to give a service to the customer: a monumental task! Customer focus means, in simpler words, providing a consistent, high-quality customer experience regardless of the point of contact or communication channel. Then what does it mean to be customer-centric? Being "customer centric" in a company's strategy goes beyond being "customer focused." It is an approach that connects the development of services and products with the present demands of a certain sector of consumers in order to maximize the company's long-term financial worth in each segment. To attain this goal, it is critical to concentrate your company's strategic objectives around the consumer in a real customer loyalty rationale. How do you foster a customer-centric culture? To succeed in establishing an effective Customer Centric culture, you must begin with a clear premise: every activity, every choice made inside your structure must be thought out in terms of the customer's wants and wishes. To do this, some businesses turn their issue into tangible items during meetings. The most archetypal illustration of this is Amazon who incorporates an empty chair into each strategic discussion. Why? To remind the organization that it must listen to the voice of the consumer and make it a top priority. Customer Centricity is a term founded on the premise that a company places its customers at the center of its priorities and actions. However, in reality, a Customer Centric strategy necessitates a thorough rethinking of your company's organizational structure. And here are the two most valuable checklists: The checklist for a Customer Centric company: \tRaise awareness of the Customer Centric culture and its advantages among all employees; \tProvide them with specialized training so that they all understand the influence of their decisions on the experience provided by your company; \tDefine similar goals not only for your agents but for all of your staff to rally around the customer experience; \tBefore launching a campaign, always analyze the impact of each of your decisions on your target audience; \tPrioritize activities that reduce pain points along the client journey. The checklist to comprehend your client segments and targets: \tEquip yourself with technologies like CRM and Review Management systems to centralize the gathering of interactions with your clients; \tCollect a large number of responses through periodical surveys in order to identify patterns in consumer demands and impediments along the customer experience; \tAnalyze all contacts with your target and views provided by the latter on a regular basis to change your offer and its alignment with the target's current wants and expectations; \tDetermine your greatest consumers based on their average shopping basket size and frequency of repurchase; \tSegment your target into numerous client typologies to understand your customer lifetime value. Right now, how you treat your customers is becoming far more essential than the products or services you provide them with. Listen to Christa Heibel explain why this is the case on the topic of Customer Experience vs Customer Service. As a key part of the Customer Centric strategy, what is Customer Lifetime Value? The question "How much do my customers bring me in the long run?" is central to decision-makers. Indeed, in order to evaluate the profitability of your efforts and hence segment your client base, it is critical to understand and quantify a vital indicator: the lifetime value of your customers or "customer lifetime value". This indicator represents the total of a customer's discounted profits over the course of his or her lifetime. It is what a client gives to a firm during the course of their "relationship." In order to assess the relevance of a campaign, this value is often compared with the cost of client acquisition. The lifetime value of a client varies substantially from one to the next. As a result, a client who buys things regularly but with a lower average basket can be far more lucrative than a customer who buys twice a year for large sums. Customer Lifetime Value or also CLV is a critical metric that allows your firm to calculate the total profit created by its customers over the course of their relationship with you. In a nutshell, it calculates the profitability of your client retention duration and identifies the most profitable customer categories for your company. This KPI is critical because it helps you to focus your efforts on the consumers who have the highest CLV with your brand, increasing your chances of retaining them as loyal customers. This allows you to redirect your efforts and money to these priority clients and delight them over time. Thus, building your strategies and tactics to improve customer loyalty. Because, in this case, aiming correctly entails retaining your top consumers in order to survive and expand your organization in the long run. While acquiring a new client is five times more expensive than retaining an existing one, your loyal consumer will purchase your products or services on a frequent basis. Furthermore, boosting your client retention rate by 5% might increase your earnings by 25% to 95%. How to measure Customer Lifetime Value? It is a two-step calculation that will help you to design your Customer Centric strategy: \tMeasuring the Value of Your Customers First and foremost, you must understand your Customer Value. This indicates the turnover created per buyer, from which you will deduct your acquisition costs as well as your customer service investments, as shown below. Customer revenue - (cost of acquisition + cost of customer service) \tCustomer Life Duration The next step is to measure your retention rate. This is the number of clients you retain from one year to the next. It is calculated on a 100-point scale. For example, if you had 100 clients last year and retained 80, your outcome is 80%, or 0.8. Once you've determined your retention rate, you may use the following method to calculate your customers' average life duration. 1. / ( 1 - retention rate ) \tThe ultimate outcome is the Customer Lifetime Value. Finally, now that you have all of the pieces in place to compute your CLV, here is the formula you utilize to get it: CLV Average revenue per customer (Customer Value) multiplied by term (in months) multiplied by Customer Lifetime As a result, your CLV will show you how much money a client gives on average during his engagement with your company. It will thus be easier for you to plan your customer-centric strategy since you will know which consumers to target and which expenditures to avoid in order to achieve profitability. However when it comes to KPIs, Customer Lifetime Value is only a piece of the puzzle. In today’s fast-paced industry, getting quick, concrete, and actionable advice for real-life problems is essential, especially for contact center professionals. That is why you must consider your the most essential metrics for an excellent customer service. Technological tools for building customer strategies The Customer Centric approach is fundamentally built on a mindset makeover because decisions are no longer made based on research trends but rather on data received from your consumers. Customer data is critical since it ensures a better grasp of your target audience. You will be able to implement a customer relationship that is completely tailored and customized to the wants and expectations of consumers as a result of this greater understanding of your clients. That is why Customer knowledge is a valuable tool for ensuring long-term satisfaction and loyalty. Customer Data Collection To evaluate and make data speak for itself, it must be collected first. Until recently, satisfaction surveys have proven to be the most effective method for doing this. As soon as they are dematerialized, they may be put at various phases of the customer experience to provide you with an overview of your customer's perception of your contact center. Taking consumer feedback into account enables you to develop a genuine connection with your customers. This allows you to better understand their demands and continually change your service based on feedback. Within the context of open inquiries, your consumers can even go so far as to suggest changes or even new goods or services that will be developed in the near future to fulfill all of their expectations. Centralized Customer Data The information gathered through the many communication channels spread across the omnichannel experience also helps to better categorize your clients. You will be able to confirm your consumer typologies and better serve them if you find common demands. Furthermore, centralizing your clients' information within a CRM (Customer Relationship Management) platform enables you to improve responsiveness and, as a result, contentment. In practice, your personnel will be able to immediately access the history of all contacts between the consumer and your organization during customer support calls. As a consequence, they will be able to give more relevant and tailored replies thanks to your CRM. Improving Customer Experience Implementing a Customer Centric Organization should not be a theoretical endeavor for your contact center, but rather manifested through distinct behaviors. By actively focusing on customer segmentation as well as the centralization of all client contacts, you will be able to provide a customer experience that is increasingly tailored to your high added value target. This loyalty will subsequently help your company's long-term success by allowing you to spend more and more resources to retain more and more consumers who can become brand ambassadors. Segmenting the Client Base You'll obtain vital information about what type of clients you wish to attract by segmenting your customer base. How do you find high-value market segments? Consider 3 consumer categories to address this question: \tNormal Clients: they account for 70% of your customers. These are clients that are dissatisfied with your items and will move elsewhere if a competitor provides a better or cheaper offering. They have a high rate of attrition and a poor lifetime value. Keeping them at any cost might end up costing you a lot of money! \tGood Clients: This group accounts for 20% of all customers. They enjoy your items enough to keep buying them. This translates into a lower attrition rate and a better lifetime value. They can become "Great customers" if they feel valued by your firm. \tGreat Clients: These are the final 10%, often known as "loyal customers," who will remain loyal to your firm permanently. Because their attrition rate is minimal, their lifetime value is relatively high. They are your brand's promoters, recommending your items to their friends and relatives. This is the part you should focus on first. Conclusion: The Endgame of being a Customer Centric Contact Center Customer centricity leads to lucrative segmentation in order to attract the "best customers" for your contact center . This allows for the identification of high-value-added sectors as well as the calculation of client lifetime value. This statistic, calculated from the retention rate, is critical for evaluating what a customer delivers to a firm, particularly in terms of the cost of client acquisition. As you can see, the customer-centric strategy may provide several benefits to businesses, particularly in terms of client loyalty. Furthermore, this method will enable you to connect all of your staff, across all departments, around a shared goal. Being a guarantor of your clients' satisfaction. Remember that being customer-centric entails: \tClient data may be used to better understand and categorize your customer base. \tConcentrating on products and services for the most loyal clients. \tCustomer Lifetime Value is used to categorize consumers. \tEnsuring that all customer service channels provide an equal level of service. \tMaking it possible for customers to contact the organization in a timely, efficient, and personalized manner. \tMaking strategic pledges and commitments to your clients. \tMaking consumers feel appreciated and foster a sense of community around the business. \tRemoving any friction from the customer's purchasing path. At NobelBiz we value each and every one of our client! No matter what, we stand by our customer, our word, our team. To us, a promise is an engagement, and our support and help for the Contact Center industry is and will always be timeless. NobelBiz is also a world-class Voice Services and Software company with 20 years of experience delivering complete solutions for contact centers across the globe, irrespective of size, industry, or activity. Work Remotely with our True Omnichannel Solution: NobelBiz OMNI+ Brings Your Contact Center into the Present You need a solution that lets you do everything remotely, from a single platform with as little effort as possible. That’s where NobelBiz OMNI+ comes in!