The Advantages of Customer Centricity — Wharton’s Marketing Analytics program
This is Wharton’s Marketing Analytics program discussion 1.1 during week one’s module — Modern Marketing Science: Big Data, Better Data, and the Future of Firm Profits. The program kicks off by talking about the strategy of product centricity and customer centricity. Below are the questions and my thoughts on them.
Consider the differences between product centricity and customer centricity.
- What advantages do you see in a product-centric approach?
- Why do you think more organizations are turning toward a customer-centric rather than a product-centric approach to profitability?
- What advantages do you see in a customer-centric approach?
The greatest benefit lies in product centricity is that — it makes product revolution simple.
With product-centric approaches, it is easy for organizations to manage the product pipeline from the manufacturing perspective. It helps organizations develop newer and advanced products or features to stay competitive. In addition, it also helps expand the profitable products to another new market to maximize profitability.
Let’s think about products that come with specifications, for example, smartphones. With product centricity in mind, the improvement of smartphones always means creating another version that is lighter, faster, or has more features.
However, a newer product is not necessarily equal to a higher level of customers satisfaction. There’s always going to be a newer version of something. The challenge facing every business today has gotten more complicated — how do we identify and develop profitable customers?
The answer leads to creating a better customer experience. It also explains that why more organizations are turning toward a customer-centric rather than a product-centric approach to profitability.
With the impact of information fragmentation, products are getting more chances to be exposed to the customers through the internet. Nonetheless, the customers have less impression and understanding of a product.
As more organizations offer both products and services, an organization will miss out on many opportunities and let its competitors steal their customers in the long term if it only takes product-centric approaches.
The advantages of customer-centric approaches are increment of retention rate, lifetime customer value, and word-of-mouth recommendations.
Customer-centric approaches elevate your customers and empathize with their needs in every stage of the marketing funnel.
By offering a better and more comprehensive experience on a consumer journey, customers are more likely to stay a bit longer to explore what a business has to offer, which might bring in more transactions.
Imagine what a satisfied customer would do after purchase? Oftentimes, they will make another purchase from the same company. Hence, it increases the lifetime customer value.
What if they don’t have the need to make another purchase? There’s still a great chance that they would recommend your service or product to their friends and family. Eventually, the business that takes customer-centric approaches will continue to get benefits from those satisfied customers.
