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4 Digital Elements for Customer Centricity

4 minute read

Companies can no longer get away with a product-centric, transactional business strategy. To succeed in today’s digital environment, customer centricity is a must.

Recent years have forced businesses to jump-start transformation initiatives to meet customers where they are. Consumers want personalized, unique experiences and will look elsewhere if brands aren’t delivering.

Leaders at supply chain-based organizations know this, which is why customer centricity is top of mind across many industries.  

In a Gartner survey, 83% of supply chain practitioners said they were being asked to improve customer experience as part of their digital business strategy. Additionally, 50% of supply chain leaders say creating a customer centric culture is their top customer experience priority.

Keep reading for four areas organizations need to focus on to embrace customer centricity in today’s digital landscape.

#1: Collect the right data

In the past, the role of the supply chain was to produce and deliver products as quickly as possible for as little money as possible. Now, with the mass amounts of data available throughout the customer journey, organizations have endless opportunities to use data to drive meaningful change.

However, even though data is more accessible than ever, many companies are so overwhelmed with the data available to them that they don’t know where to begin.

For companies that want to tap into their supply chains to motivate and serve consumers, focusing on three types of data is key:

• Sentiment data: What consumers say they will do. Includes product/feature preferences, price ranges, and channel preferences.
• Behavior data: What consumers actually do. Includes purchase price, shopping behavior, return rate, and brand interactions.
• Social data: How consumers interact and share their experiences. Includes reviews, ratings, referrals, and social media interactions.

Demographic data is also easily accessible and necessary for gaining insight into customer needs and tailoring experiences. Businesses can collect this wide range of data internally or externally through various third-party applications. However, when implementing new data collection technology, organizations must focus on comprehensive data management and supply chain analytics strategies to achieve successful adoption.

Read: 4 Common Barriers to Change Adoption

#2: Create seamless digital experiences

Customers expect connected digital journeys when interacting with a brand.

Research shows 74% of customers use multiple channels to start and complete a transaction. Further, 76% of customers expect consistent interactions across departments, yet over half (54%) say it feels like sales, service, and marketing teams don’t share information.

Despite the growing importance of customers, and their high expectations, many companies don’t take on digital transformation initiatives to improve customer experience. In fact, research found 87% of companies see digital transformation as a competitive opportunity rather than a customer-facing requirement.

A mindset change is needed for companies that want to get ahead. Creating value-driven, seamless, and holistic digital experiences should be a priority when improving customer centricity.

Consider these additional statistics:

• 82% of consumers expect immediate responses on sales and marketing questions
• 80% of consumers consider the experience a company provides to be as important as its products or services
• Brands with the strongest omnichannel customer engagement strategies retain an average of 89% of their customers, compared to 33% of companies with weak strategies
• 43% of consumers would pay more for greater convenience

The data is clear: Accessible digital journeys are essential for brands that want to attract and keep customers. To get started, companies can consider using AI for product recommendations, implementing chatbots to improve customer service, creating a strong social media presence, and offering different digital channels to reach consumers where they are.

Read: Supply Chain Trends & Insights Report: Innovation

#3: Understand customer lifetime value

The 80-20 rule, which states that 80% of a company’s revenue is generated by 20% of its customers, is well known in business—and with good reason. Consider this:

• Existing customers spend 67% more than new customers
• Keeping existing customers costs 5x less than attracting new ones
• Increasing customer retention rate by only 5% increases profits by 25-95%
• Referred customers are 4x more likely to buy when referred by a friend, and 92% of shoppers trust referrals from people they know

Existing customers are priceless, so businesses should invest proper time and resources into understanding their customers’ lifetime value and nurturing a strong relationship throughout the customer journey. Using advanced data and analytics is one way to get there. After collecting consumer data, organizations can use predictive analytics to track behavior and gauge lifetime value when customers are in the early stages of the purchase journey.

Implementing a variety of methods to maintain customer relationships and remain accessible is also important for businesses focusing on customer lifetime value. Companies can do this through offering exclusive events, creating referral and rewards programs, encouraging feedback via surveys, providing world-class customer service, and more.

Read: 4 Strategies for Becoming a Customer Centric Company

#4: Prioritize data protection

Consumer data, which holds incredible value, is easier to collect than ever. However, to maintain credibility and build long-term relationships with customers, organizations need to ensure ethical and responsible data usage.

People are wary of how businesses handle their data. Research shows only 27% of consumers understand how companies use their personal data, and 86% want more transparency around how their personal information is used.

Customers are especially suspicious of companies in the CPG industry. In a survey on consumer data and privacy, McKinsey found consumers view CPG companies as the least trustworthy. A mere 10% of respondents said they trust CPG companies with their personal data, compared to 44% who trust healthcare and financial services companies.

Further research into customer centric supply chains found that for both B2B and B2C customers, data privacy and secure experiences were top customer value propositions.

While some customers don’t want companies to collect their personal data, others are willing to allow it for more personalized, custom experiences. PwC research shows 63% of U.S. consumers are open to sharing the personal data for a product or service they truly value.

Therefore, for companies that want to use consumer data to improve customer centricity, transparency and ethical use are non-negotiable. Otherwise, customers will be unwilling to share the data organizations need to excel at customer centricity.

Need help with your customer centricity and digital initiatives?

At Catena Solutions, we specialize in business transformation and data and analytics solutions needed to improve digital initiatives and achieve customer centricity. Contact us to learn more.