A customer-focused approach to business has quickly risen to be one of the most popular strategies in the business world. While the ROI on improving your customer’s experience might not be obvious at first glance, the data shows that companies with a customer-focused mindset drive 4-8% more revenue than their competitors.
But what exactly does it mean to be customer-focused, and how can you make your business more customer-focused? If you are looking for the answer to these questions, you’ve come to the right place.
In this article, you’ll find an explanation of the customer-focused business approach, why you should consider applying it to your business, how to do so, and the advantages and disadvantages of the philosophy.
Customer Focus Defined
In business, customer focus, or client focus, refers to putting the interests of the customer first. A company committed to customer focus develops its entire culture to meet the needs of the customers both proactively and reactively.
As it relates to sales and the interaction between the seller and customer, being customer focused is about the seller taking the customer’s point of view. You are putting yourself in your customer’s shoes and viewing things from their perspective. In other words, you need to understand how your customer feels, what they dream of, and what they aspire to become or achieve. Putting your customer first means concentrating on their needs, wishes, aspirations, and dreams instead of focusing on yourself and your business.
In a customer-focused organization, company-wide decision-making is centered on customer satisfaction and retention. Customer service teams play a small role in this holistic approach. All initiatives must aim to increase customer satisfaction from the frontline sales team to the HR department. In theory, as long as customer needs are met, other aspects of the business will, in turn, follow.
Customers-focused businesses have achieved acclaim in the marketplace because they address a need that no other business had previously addressed.
Customer-focused approach in different industries
A customer-focused approach can take many forms depending on the type of business for which it is applied. Here is a look at what this approach looks like in the online retail, tech, and fast-food industries:
- Online retailers: In an effort to provide a good customer experience, many online retailers scan their sites for pain points. E-commerce businesses look beyond products to increase customer engagement and reduce churn by improving site navigation, customer support systems and return policies.
- Tech: Customers’ feedback is actively sought by tech companies in order to develop new products. Others give away software for free because their core business is mining customer data and selling it to advertisers.
- Fast food: Positive customer interactions are often the priority of fast-food chains. These chains look beyond the menu to enhance customer loyalty, whether it involves launching an easy-to-use ordering app or introducing novel ways to move drive-thrus along.
Why Should You Build a Customer-Focused Business?
We can better understand a customer if we put ourselves in their shoes and view things from their perspective, which helps us develop the most effective solutions for them.
Furthermore, focusing on the customer has three critical benefits:
Fosters loyalty: Creating a mutual engagement with your customers usually results in a more attractive relationship between you and them. An issue that your customer originally thought they were facing suddenly becomes your joint project. Furthermore, you and your customer become equally committed to the same goal. Imagine that your customer wants to win a contract with their customer but lacks something that their competitor has. When you focus on your customers and understand their situation, you will be better able to help them. Their challenge becomes your challenge. Achieving that contract together becomes your objective.
Increases customer engagement: You are better able to help customers if you are customer focused. Your customers will sense and recognize that you are making an extra effort to understand their situation and really understand them so that you can be of better assistance to them. Customers like to feel heard. Salesforce research found that 62% of customers expect companies to adapt based on their actions, feedback, and behaviors. When you don’t listen to your customers, they will find someone who will.
Provides you with a competitive advantage: In addition to feeling great about what you do and how you work, being customer-focused can also increase your success. Instead of chasing customers for support, you will more frequently be contacted by those who want your help. Word-of-mouth is incredibly powerful.
Your business will be more successful overall by focusing on your customers. In fact, companies that focus on the customer are 60% more profitable than those that do not.
8 Tips to Build a Customer-Focused Business
In order to become a customer-focused organization, you must be intentional about how you interact with customers on a daily basis. The customer must always be at the center of every interaction. This becomes harder and harder to scale as you grow.
Following these eight tips will help you keep both relationship management and process improvement at the forefront of your mind:
- Listen to your customers
Each customer has a story to tell, but they don’t want to have to repeat that story every time they interact with your brand. Customers who feel ignored by having to repeat themselves aren’t likely to think of your company as customer-centric.
You’d be exhausted if you had to reintroduce yourself every time you see a coworker. Businesses often communicate with customers in this way, which is neither personal nor customer focused.
In order to make sure satisfied customers feel heard, companies will require that same connective tissue. You need to define who they are and what they need. To do so, try asking yourself these questions about your customers:
- What do they need?
- How do they make decisions?
- What are their objectives?
- How do they feel?
Identifying a customer’s primary goal, such as saving time at work and spending more time with family, can help you find the right solution. Utilize web analytics, product usage patterns, and customer attrition rates to gain insight and solicit customer feedback.
- Take a multi-channel approach to communication
A single communication channel may seem simple but communicating according to your customers’ channels of choice is a powerful way to build loyalty.
Your customers should not have to make an effort to reach your brand. Companies that focus on their customers meet them where they are. In this way, customers can contact them whenever and however they wish.
You should look into the demographics of your customers and consider the types of questions you receive most often. Your market research might recommend offering a particular channel. You might find, however, that your customers prefer a mobile-first approach. If your customers are using mobile messaging channels, such as SMS or WhatsApp, consider adding them to your repertoire.
Having a 360-degree view of the customer will be crucial for connecting conversations across channels. This will ensure that the customer’s context follows them wherever they go. As a result, your business can respond quickly and personally to customers no matter how or when they reach out.
- Encourage collaboration
In order to create a consistent, overall better customer experience, teams need to work together. The majority of customers expect companies to collaborate on their behalf.
Despite this, customer data is divided between multiple systems owned by different departments, which often leaves customers with a disconnected experience when dealing with a business. A truly customer-focused business will strive to capture a complete 360-degree view of its customers. Taking this step will allow them to provide unified customer engagement across multiple channels.
Support teams and sales teams may collaborate as follows:
- The agent can flag the sales team if a customer wants to learn more about a new product.
- A sales rep can contact an agent specializing in technical issues if the question is more technical
Collaboration pays off, too. A collaborative sales and support team has:
- Increased lead generation
- Increased number of deals
However, collaboration shouldn’t hinder your team’s productivity, as that only slows things down for the customer. In order to effectively collaborate on the customer’s behalf, departments need to integrate customer data across departments. By doing so, teams can share insights without:
- Interrupting their workflow
- Bringing the customer into the loop about what goes on behind the scenes
As a result, teams can offer customers the personalized experiences they expect based on context and conversation history.
- Make use of the customer’s feedback to improve
An important aspect of becoming a customer-focused company is knowing how to handle customer feedback. Rather than dodgeball with customer complaints, customer-focused companies make sure the customer’s voice is heard and create a better experience based on their feedback.
There are several tools you can use to gather customer feedback. These include:
- You can survey your customers using e-mails, chatbots, or even social media channels.
- You can invite customers to talk about their experience with your product through an online community. You can even have them vote on new features or products this way.
Your customers need to be involved in the feedback loop. A healthy relationship requires both sides to be engaged.
- Connect the data to your customer
With the availability of more and more data, companies are no longer forced to guess what their customers want. Companies can now look to trends to find out what their customers want.
However, taking a customer-centric approach to data doesn’t mean using it blindly. The approach combines data with empathy. In other words, this means:
- Contextualizing data
- Understanding who uses your product and what they are looking for
Your product team may align a product update with customer support data in order to ensure it is relevant to those it impacts. As an alternative to sending every customer the same email, a marketing team might adapt their content based on the customer’s profile.
You’ll need to connect insights across systems and software to manage and interpret your data effectively. Yet, data split between different departments often prevents companies from using it emphatically and in ways that benefit their customers. The reason is that they lack the proper context.
- Leverage the power of AI
The best businesses proactively meet their customers’ expectations, not just by reacting to what they need.
As a result, technology such as artificial intelligence (AI) and the Internet of Things (IoT) has given businesses the tools to become more proactive in their interactions with customers. Consumers and business buyers alike are willing to pay a premium for differentiated, first-to-market products and services, putting pressure on businesses to keep up.
Proactive experiences, however, do not need to be costly or complicated. Machine learning might help customer support teams proactively predict potential customer pain points to reduce customer complaints. In other cases, sales teams can deploy a chatbot to proactively acknowledge customers and handle any questions they have while shopping.
- Appoint a customer-focused advocate
Business owners can easily lose focus on customers in the day-to-day running of their companies. This is why appointing a chief customer officer (CCO) is becoming a more common trend.
A CCO’s role is to serve as the voice of the customer and ensure that customer focus is maintained throughout the organization. They use data and research to champion customers’ needs, guide the development of products and processes, and identify areas where teams need to improve their customer focus skills.
Furthermore, they ensure that a customer-focused approach leads to tangible benefits for your business, including increased customer satisfaction, reduced customer churn, and increased revenue.
- Support the teams that support customers
It’s important to give a pat on the back to the people who are on the front lines of your business, your customer service agents. While maintaining customer focus should not fall on any specific team, it is nonetheless important to give them that extra pat on the back. Your customer service team directly interacts with your customers and directly impacts your brand’s reputation. Customers can tell when an agent is unhappy or overworked, which can lead to a negative experience. In customer service, burnout is a significant risk. Companies need to support their support teams to empower agents to do their jobs well.
A good way to acknowledge their importance is to invest in training, nurture career growth, create incentives, encourage teamwork, share good customer feedback, or show empathy. Each team will have its own way of accomplishing this. Although there are no set rules to follow, there is always inspiration to be found in others.
Advantages and Disadvantages of a Customer-Focused Business
Like with any business strategy, a customer-focused approach will have its share of benefits and drawbacks. While, in general, you will have increased customer loyalty and higher profits, you could run into issues with increased costs due to the ever-changing needs of your customers.
The advantages and disadvantages of being customer-focused include:
Advantages of being customer-focused
The following are a few benefits of taking a customer-focused approach:
- Higher profits
According to studies, selling to an existing customer who knows your business is much easier than selling to a new one. In general, you have a 5 to 20% chance of selling to someone new, while 60% to 70% of loyal customers would not hesitate to purchase from a company that they trust again.
- A competitive edge
Fierce competition in all industries means focusing on the customer becomes a differentiator and can help companies remain competitive.
- Increased loyalty
Customer-focused approaches aim to offer your customers the best possible solutions and tailor your services to meet their needs, increasing customer satisfaction. Customers who are satisfied tend to stay loyal and return, which can (and will) contribute to your overall success. When companies create products and services that seem to consider their needs, customers are more likely to purchase from them. Businesses that highly value training their staff to emphasize customer service are also more likely to attract customers.
- More motivated employees
It is crucial that employees who interact with customers feel good about the company, too, because they are the company’s direct point of contact with “the outside world.” When employees of an organization feel good about their workplace and its values, they are likely to do a better job on a daily basis.
- Better customer service
Customer service becomes part of your brand when you run a customer-focused business. Customers automatically associate your company name with friendly and knowledgeable sales professionals and a company dedicated to meeting customers’ needs. Businesses such as Zappos and Trader Joe’s are celebrated for their commitment to providing superior customer service and being customer focused.
- Increased referrals
Businesses benefit from customer referrals since they reduce advertising costs. Customers who are loyal to a business are more likely to refer its products and services to their friends, family, and colleagues. Referral customers tend to be prequalified, so turning them from prospective customers into buyers is easier.
Disadvantages of being customer-focused
Some of the drawbacks of utilizing a customer-focused approach include:
- Potentially higher financial costs
Companies can develop policies aimed at pleasing and retaining customers that have an adverse effect on their revenue. Allowing the customer to return an item to a retail store at any point after purchase, for example, can be expensive for the business and may not make sense. Understand the bottom-line cost and long-term viability before developing customer-focused policies and processes.
- Ever-changing customer needs
Customer needs are constantly changing, so your customer-focused business needs the resources, such as financing, staffing, and time, to meet them. Small businesses may find this challenging, as it can be expensive and lead to employee burnout.
- May hurt your drive to innovate
Companies that focus solely on their customers’ needs and wants may suffer from a lack of creativity. Customer-focused companies may resist improving products or creating new ones, which can hinder their drive to innovate. When surveyed about their needs, customers may know what they want, but companies should use research and development to come up with ideas they wouldn’t have come up with on their own.
Final Thoughts
An improved relationship with your customers is one of the many benefits of building a customer-focused business. If you ask your customers for feedback and use that data to improve your services, you can increase their loyalty and your standing in the industry. This approach, however, isn’t a one-time deal. Customer-focused businesses have to be on top of their customers’ needs every day, which can be challenging for companies that grow quickly or in industries with constantly shifting customer demands.