A2X Consulting

Do you buy ‘coffee’ at Starbucks? Or, are you really buying the ‘experience’ around the consumption of coffee? Do you know why customer service has become synonymous with the retailing giant, Nordstrom? What Starbucks and Nordstrom, like many other successful companies, have in common is the focus of their business on customer satisfaction, also called ‘customer centricity.’

Choices, and access to product information, enables customers to control the buying process today like never before. As a leader at your company, you can imagine what types of challenges this brings. “To be successful, organizations must ‘hire’ their key customers, and make them an integral part of their new product development and business redesign efforts,” says Stephen Shapiro in his book 24/7 Innovations. He encourages his readers to redesign their business processes to meet customer demands more effectively.

“The customer is at the center of all that we do. Customer centricity, at its very heart, is all about innovation. It’s innovation in connecting with customers, and meeting their needs in unique ways,” says Anderson, CEO of Best Buy. In 2005, the company rolled out 144 new “centricity” stores, targeting one or two customer segments to offer “value propositions”.

Customer-centric innovation, say Larry Sheldon & Ian C MacMillan, is a rigorous customer-based R&D process which focuses on delivering complete, satisfying experiences to real customers. Customer-based R&D propels innovation efforts out of labs to those locations closest to the customers.

Benefits of Customer Based R&D Include:

• Gaining knowledge about customers not known or perhaps opaque to the competitors
• Employees interacting closely with customers play a central role in the buying process, which can increase employee loyalty
• Customer knowledge leads to innovation that bridges the gap between business plan and market expectations

(Source: Manage Customer-centric Innovations, Systematically; HBR)

Customer satisfaction is a goal of any marketing function in a company. It is not an achievement to simply ‘satisfy’ a customer because that’s the bare minimum requirement. In the face of global business, innovation in serving the customer and increasing the value of your customer’s experience with the company and its products has become a necessity. If you don’t find new ways of engaging and serving the customer, your competitor will. So, learn to focus your innovation efforts on the customer, and you will build lasting, profitable customer relationships.