Rajesh Bhargave Imperial College Business School

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You don't have a business without your customers, so it's essential their needs remain your North Star

Every business will say customers are top of the agenda but while they might talk a good game, not everyone achieves it. The needs of the customer are constantly at risk of being eclipsed by more pressing demands for attention such as cashflow, logistics or operations, and it’s all too easy for them to slip from view.

In The Practice of Management (1954), Peter Drucker wrote: “The purpose of business is to create and keep a customer.” But the balance of power has shifted – today’s customers are more informed and have more choices than ever, and organisations need to work harder for them.

The pandemic has turbocharged a shift to digital. At the same time, customer behaviour is changing rapidly, prompted by business and lifestyle changes – more consumers are buying groceries and takeaways online for example – and companies need to keep up.

But there are challenges to being this customer-centric. Business leaders must truly understand the perspective of the customer and how they engage with their organisation.

Understanding your customers

Thanks to web data and customer satisfaction surveys, it’s never been easier to know how consumers behave, how long they linger on a webpage and how they rate your service.

Companies can use many other quantitative research tools, such as conjoint analysis, to drill down into consumer preferences and gain more accurate knowledge. But there are also risks of exclusively focusing on data which can be easily quantified. Consumer fatigue can set in, with satisfaction surveys now eliciting fewer responses, making them less effective.

Customer behaviour is changing rapidly, prompted by business and lifestyle changes

It’s the questions that businesses don’t ask their customers that could actually give the most valuable information – thoughts and feelings can’t always be expressed as a number and big data doesn’t always reveal the truth of someone’s experience.

Businesses need to find ways to allow core customers to express spontaneously what they feel and engage with them in a more open-ended way. Companies are beginning to devise more imaginative ways to ask the same basic question: "what do you like about our company?" 

It’s not enough to take a snapshot, we need to observe customer journeys, understand their experience and react to it. Businesses need to weigh up whose feedback they want, possibly prioritising their most valuable and loyal customers.

Keeping customers front of mind 

There’s a second challenge: how, amid logistical, strategic and financial pressures, do you keep customers at the top of your agenda?

The hospitality sector truly understands the importance of customer-centricity and has been exceptional at meeting customer needs, as have big players in tech, but other sectors and businesses are so busy day-to-day that customers are neglected. In the past the automotive sector has been too rigid, too focused on finance, on problems with workforces that it lost sight of the need to delight its customers.

Large high street retailers didn’t listen to what their customers wanted, and have suffered. So how can businesses keep customers front of mind, especially when staff are working remotely? In the past, some companies have done this by prominent displays of client photos and stories, which act as visual reminders for staff who might not have direct contact with clients.

Companies need to find concrete ways to reduce the distance between staff and clients. Collaboration platform Slack does this well amid remote working by collecting and sharing customer stories in newsletters to their staff to give an idea of the people behind the data.

Making customer-centricity part of your culture

And there's a third challenge: it’s not enough for companies to declare their customers are paramount, they need to consider the organisational changes required to make this happen.

Customer value needs to become part of the culture and must be reflected in the entire organisation, from the leadership down. Companies must aim to hire candidates who can empathise and truly understand their customers. Consider whether there is room in an organisation for a consumer champion, responsible for customer insights, research and advocacy. Larger companies could look into empowering managers to incorporate this at local levels. 

What gets measured gets managed, as the adage goes – what are the benchmarks that show a company is achieving its goal of customer value? One popular measure is net promoter score, which measures how willing customers are to recommend a product or services to someone else.

Some sectors and businesses are so busy day-to-day that customers are neglected

We have seen great strides in customer awareness over the last two decades. New companies tend to do better for their customers than larger corporations – they can’t afford not to. But as companies grow, different needs compete for attention, and it’s easy for lose sight of customers. Traditional sectors such as automotive are becoming more responsive, with the disruption of innovators such as Tesla, and the long heralded carpooling and leasing –"cars as a service" – expected to develop over the next decade.

It’s hard for businesses to make changes when they are firefighting, and they did plenty of that during 2020. It was a tough year, but many economists are forecasting a resurgence of the roaring twenties over the next few years. With the turbulence that businesses face during 2021, it could be too easy to lose sight of this simple truth – the customer must be at the centre of everything. After all, how can you survive without them?

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Rajesh Bhargave

About Rajesh Bhargave

Associate Professor of Marketing
Dr Rajesh Bhargave is Associate Professor of Marketing at Imperial College Business School. His research and teaching specialises in the area of consumer behaviour.

You can find the author's full profile, including publications, at their Imperial Profile

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