A Closer Look at Customer-Centricity

Customer-centricity generally is defined as organizing your business around the needs of your customers. Clearly, there’s a lot of room for interpretation here, but most database marketing consultants point to Best Buy’s 2005 stores overhaul as the shining example of what it means to be customer-centric. After studying its customer base and testing the resulting approach in laboratory stores, the consumer electronics chain tailored 100 or more of its stores around the needs of five customer segments it identified as most important to the company’s success. Everything from the store layout to the background music, signage, type of staff hired and exact mix of merchandise is centered around serving these key segments.

To take customer-centricity to the ultimate level, however, product development and corporate structure also get designed around catering to the needs of your top customer groups. That’s a huge step for all but startup companies, but the experts consulted for this story point out that customer-centricity offers smaller lessons that fit any business.

“Essentially when we talk about being customer-centric, we’re talking about looking at the world through the eyes of the customer: what they want from you [and] from the market, what they expect and what they can count on you for,” explains Laura Patterson, president of Austin, Texas-based marketing services firm VisionEdge Marketing.

How Is Customer-Centricity Being Applied?
Companies typically are organized around their individual brands, with managers for product marketing, channel marketing and so on. A customer-centric company realigns that focus, says Joe Paulsen, senior vice president and general manager of integrated marketing services at Experian, a global provider of marketing services with headquarters in Costa Mesa, Calif. “You know someone’s doing customer-centricity well when they’ve got a segment marketing organization structure—whether it’s overlaid or not is a different story. But if they’ve got an owner of marketing to [each key] segment, then they’re starting to get down that path.”

These segment managers, he continues, must be “political enough; can evangelize enough; can advocate for [their] segment and muscle up the changes in merchandising, store, product development, marketing and the rest” to pull off this approach.

What Are the Main Challenges?
At a tactical level, the focus is on identifying the key customer groups. Paulsen cautions companies against building these segments too fast. “We want everything oriented around the customers’ beliefs, passions, preferences and so on. But it’s not manageable to manage 20 million unique relationships. So, organizationally, if you do it around segments as fine as you can get them, then you know you’ve got a commitment to [getting more customer-centric],” he explains.

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