Customer

Centricity
Without customers, businesses
could not succeed.
 Customer
focused

Customer
Centric

Market Market
Driven oriented
 Peter Drucker is often credited with being the first to recognize marketing
not as a specialized functional activity, but as “the whole business seen from
the point of view of its final result, that is, from the customer’s point of
view.”
In his iconic 1954 work The Practice of Management, he asserted that “there
is only one valid definition of business purpose: to create a customer.”
Traditional Organization versus Modern Customer-Oriented
Organization
Theodore Levitt-Marketing Myopia

What business are [we] really in?

That businesses will do better in the end if
they concentrate on meeting customers’
needs rather than on selling products
 2
Building a
customer
centric culture
1 3
Understanding Serving the
the customer customers

Customer
Centricity
 1 Understanding the Customer
• Customers buy products for the benefits that the product features
provide.
• E.g. Companies sell automobiles, customers buy transportation,
image, and freedom.
• In order to identify these benefits, an understanding of what
consumers value is critical.
• As a rule, consumers attempt to maximize what is called customer-
perceived value (CPV), that is, they want the greatest benefit
(economic, functional, psychological) from the lowest possible cost
(evaluating, obtaining, using, disposing) of the product or service
 Customer Perceived Value

Customer-perceived value (CPV) is:

“The difference between

the prospective customer’s evaluation of all the benefits and
all the costs of an offering and the perceived alternatives.”
Determinants of Customer-Perceived Value
 Customer Value Analysis
 The purpose of customer value analysis is to reveal company’s strengths and
weaknesses relative to those of various competitors.

 The steps in this analysis are:

 Identify the major attributes and benefits customers value.
 Assess the quantitative importance of the different attributes and benefits.
 Assess the company’s and competitors’ performances on the different
customer values against their rated importance.
 Examine how customers in a specific segment rate the company’s
performance against a specific major competitor on an individual attribute or
benefit basis.
 Monitor customer values over time.
 Total Customer Satisfaction

Satisfaction is a person’s feelings of pleasure or disappointment that

result from comparing a product’s perceived performance( or outcome)
to expectations.
 If the performance falls short of expectations , the customer is
dissatisfied.
 If it matches expectations, the customer is satisfied.
 If it exceeds expectations, the customer is highly satisfied or
delighted.
 Customer Expectations

 Formed by past experiences, friends, marketers, competitors,

information and promises.
 If marketer raise expectation too high, the buyer is likely to be
disappointed.
 It sets too low. It won’t attract enough buyers.
 Some of today's most successful companies are raising expectations
and delivering performances to match.
 Delivering High Customer Value
 Value proposition-whole cluster of promises offered
 Value-delivery system-communications and channel experiences offered to customer
 Example- how Google provides value proposition to its users?
RATING AGAINST CUSTOMERS BUYING CRITERIA

This Comp Comp Comp Comp Comp Comp Comp

Quality & Price Bus A B C D E F G

Non-Price attributes %
Affecting Customer Weight
Choice

Product - Related %
1.
2.

Service - Related
1.
2.

Total 100%
Has quality gone up/down (+/-)
In past 4 years
Relative Price today 100
Relative Price 4 years ago 100
Market choice of suppler specified by
Price ………… % and Quality ………………. % (Total 100%)
1.1 Assessing Customer Needs and Values

What Exactly Is a Customer?

The definition of a customer can vary greatly.
• In some industries, wholesalers, retailers, and other parts of the
distribution chain have a profound influence on the choices
customers make. So it’s important to understand “the trade.”
• In other markets, non-buying influencers specify the product,
although they neither purchase it nor use it. These include architects,
consulting engineers, and doctors.
• In still other markets, one person may buy the product and another
may use it; family situations are an obvious example.
 1.2 Measuring Customer Satisfaction and Gathering Feedback

Given the corporate value of retaining customers, an organization’s

goals need to focus largely on satisfying its clientele.

• It’s hard to grow a business if your customers don’t recommend your

products or decide not to return at all.
• Moreover, it’s difficult to fix problems you don’t know you have. That
is why measuring satisfaction and capturing meaningful feedback is so
important.
Net Promoter Score
 Net Promoter Score
 The Net Promoter Score, or NPS®, is based on the
fundamental perspective that every company’s
customers can be divided into three categories:
Promoters
Passives
Detractors
 By asking one simple question — How likely is it that
you would recommend [your company] to a friend or
colleague?
you can track these groups and get a clear measure
of your company’s performance through your
customers’ eyes. Customers respond on a 0-to-10
point rating scale and are categorized as follows
 Net Promoter Score
We ask:
1
“How likely are you to recommend Mobilink to a friend or colleague?”
Extremely likely
If you score 9 or 10, you will
10 Promoter recommend Mobilink to
2
9 others often
8
Neutral If you score 7 or 8, you will
7
recommend Mobilink less or
6 not at all to others
We classify 5
the customer 4 If you score between 0 and 6
by their score
you are likely to discourage
3 Detractor
friends and family from
2
using Mobilink
1
0
Extremely unlikely
Net promoter score is % of promoters minus the % of detractors

% Promoters

Minus

% Detractors

Net Promoter Score (NPS)

2.Building a Customer-Centric Culture

• Marketing is not something you do to the customer; rather, it is how

the customer influences your organization.
• Creating a truly customer-centric culture is about developing a deep
understanding of, and effecting true organizational change to focus
on, the customer.
• Gathering, standardizing, organizing, and translating customer
information that comes from all across an organization requires
companies to establish some type of infrastructure that will serve to
coordinate it all.
3. Serving the Customer

• Customers traditionally made decisions on whether to buy a product

or service based on some combination of perceived quality and price.
• Companies make a profit by maximizing volume sales and reducing
marginal costs per unit.
• That conventional strategy, however, has proved problematic because
a company’s cost advantages can be realized only to a point before
quality is sacrificed.
 Jeff Bezos-Point of View

l t h in g s ; we
w h e n we sel ake
on ey m e r s m
d o n ’t make m e h e lp custo p a n i e s n ee d
We
on e y when w30 o do that, com etitive
make m ecisions.” T n a n d comp
purchas
ed
e p rop ositio e ds .
a va lu m e r n e
lop to
to deve g based on cus
in
position
 A Shift in Focus

 From acquisition to retention

It costs less to serve loyal customers than to acquire
and serve new ones
The profitability of customers is related to the length
of the relationship with those customers
 A daily commitment from both the marketers
and the organization is required to retain
customers