There’s a 12-step process for everything and creating a customer-centric organization is no exception. Today the customer experience reigns supreme, so building a customer-centric organizational structure is essential for sustainable growth and success. Does your organizational structure reflect a customer-centric culture and help you create customer value? If not, follow this 12-step process to implement such a framework. If you have a board of directors (BOD), especially a director with customer-centric Marketing expertise, there are six ways that body can help you with the process.

Without meaning to sound like a broken record, placing your customer at the center of your business decisions is a fundamental principle of customer-centricity. One of the earliest and most cited definitions of customer-centricity comes from Michael D. Johnson’s and Anders Gustafsson’s seminal work, Improving Customer Satisfaction, Loyalty, and Profit: An Integrated Measurement and Management System. They define customer-centricity as “a strategy that aligns a company’s development and delivery of its products and services with the current and future needs of a select set of customers in order to maximize their long-term financial value to the firm.”

4 Ways That Will Launch Organizational Success Via Customer-Centricity/Experience

We’ve been writing about the importance of customer-centricity since Johnson’s and Gustafsson’s book was published in 2000. Customer-centricity and customer experience are deeply interconnected concepts that complement and reinforce each other in the pursuit of organizational success. Research consistently shows that customer-centric organizations outperform their peers in terms of customer acquisition, retention, and loyalty. A study by Dimension Data of over 1,300 organizations across 80 countries found 84% of organizations that focused on improving customer experiences increased their revenue, and 79% reported significant cost savings.

Here’s how customer-centricity and customer experience are related:

1. Customer-Centricity Drives Customer Experience: At its core, customer-centricity is about prioritizing the needs, preferences, and satisfaction of customers in all aspects of business operations. By adopting a customer-centric mindset and aligning strategies, processes, and resources to meet customer expectations, organizations can deliver superior customer experiences. Every interaction with the customer, whether it’s through product design, marketing communications, sales interactions, legal and finance systems, or customer support, serves as a moment of truth. It is an opportunity to reinforce the organization’s commitment to putting the customer first.

2. Customer Experience Reflects Customer-Centric Culture: The quality of the customer experience (CX) directly reflects the organization’s commitment to customer-centricity. A positive CX reflects your organization’s efforts to understand, anticipate, and fulfill customer needs and desires. Conversely, poor CX can signal a disconnect between the organization’s stated values and its actual practices. Therefore, building a customer-centric organizational structure is essential for consistently delivering exceptional customer experiences that differentiate the brand and drive customer loyalty and advocacy.

3. Feedback Loops Facilitate Continuous Improvement: Customer-centric organizations leverage customer feedback as a strategic asset for driving continuous improvement in CX. By actively soliciting feedback, listening to customer concerns, and taking swift action to address issues and pain points, organizations demonstrate their commitment to responsiveness and accountability. This feedback loop fosters a culture of continuous improvement, learning, and adaptation, allowing the organization to evolve and innovate in ways that enhance the overall CX.

4. Together They Build Long-Term Customer Relationships: Customer-centricity is about building enduring relationships based on trust, empathy, and mutual value creation. By consistently delivering exceptional customer experiences, organizations can foster loyalty and advocacy among their customers. Loyal customers are more likely to repurchase products or services, recommend the brand to others, and contribute to long-term revenue growth. Therefore, prioritizing customer-centricity is a sound business strategy and fundamental driver of sustainable success. Research by Gartner found positive customer service experiences account for over two-thirds of customer loyalty, which is greater than the loyalty driven by brand and price perception combined. A Gallup Workplace study found customer-centric companies saw a 25% increase in customer loyalty and a 20% increase in customer confidence.

Customer-centricity and CX are symbiotic concepts that form the foundation of a customer-centric organizational structure. It is your organizational structure that translates the philosophy into action.

12 Steps to Build a Terrific Customer-Centric Organization

Companies with rigid hierarchies and siloed departments often struggle to deliver seamless and personalized experiences to customers. Findings from the Business Agility report note organizational silos among the top 10 impediments to agility. Greg Kihlstrom, author of The Agile Brand, claims agile companies improve their ability to adapt to market shifts, boost customer happiness, and promote lasting expansion.

In a customer-centric organization, decision-making is decentralized. Why? Because in this type of organization, frontline employees are encouraged and empowered to promptly solve customer problems, no matter what it takes. Zappos, the online shoe retailer, illustrates the above and beyond of a customer-centric organization and culture. Zappos employees are encouraged to “deliver happiness” to customers, even if it means spending hours on the phone with them.

Ready to create or expand your customer-centric organization structure? Consider how you might use these 12 steps.

1. Define a Clear Customer-Centric Vision, Mission, and Outcomes: Establish a clear mission and vision, along with outcomes that prioritize your customers’ success and create customer value across all levels of the organization. Establish an organizational structure and select leaders for functions who will facilitate these.

2. Empower Employees: Once you have the structure in place, empower frontline employees with the autonomy and resources to address customer requirements effectively. Provide comprehensive training to ensure they understand the importance of customer-centricity.

3. Break Down Silos: The structure needs to foster collaboration and communication across departments to ensure a unified approach to serving customers. Eliminate silos, which hinder the flow of information and can result in disjointed experiences for customers.

4. Collect and Act on Customer Feedback: Implement robust mechanisms for collecting customer feedback that is shared across the entire organization. Use this data to drive continuous improvement initiatives.

5. Establish Measures and Measure Success: Define measures and key performance indicators (KPIs) that align with customer-centric performance targets, such as customer effort, customer engagement, customer experience, customer loyalty, and customer lifetime value. Make sure every function’s and department’s measures are directly linked to these. Regularly monitor and analyze these metrics to track progress.

6. Cultivate a Customer-Centric Mindset: Instill a customer-centric mindset throughout the organization by fostering a deep understanding of the customer journey and touchpoints.

7. Design Customer-Centric Processes: Review and redesign internal processes to prioritize customer needs and streamline operations. Look for ways to structure processes to eliminate friction and enhance the overall experience.

8. Invest in Technology and Infrastructure: Leverage technology and infrastructure investments to enable seamless interactions and personalized experiences across all touchpoints. This may involve implementing customer relationship management (CRM) systems, data analytics tools, and digital communication channels to better understand customer behavior and preferences.

9. Create a Culture of Continuous Improvement: Foster a culture of continuous improvement across the entire organization. Encourage experimentation and innovation. Empower employees to propose and implement changes that enhance the customer experience and establish mechanisms for sharing best practices and celebrating successes.

10. Align Internal Rewards with Customer-Centric Outcomes: Review and realign incentive structures to reinforce customer-centric behaviors and outcomes. This may involve tying employee bonuses and rewards to customer-centric measures or other key performance indicators (KPIs) that reflect the organization’s commitment to customer-centricity.

11. Promote Transparency and Accountability: Ensure transparency and accountability at all levels of the organization by openly communicating customer-centric outcomes and progress to these. Hold leaders and teams accountable for delivering on customer commitments.

12. Engage with Customers Proactively: Proactively engage with customers to solicit feedback, gather insights, and anticipate their evolving needs and expectations. This could involve conducting surveys, hosting focus groups, or establishing customer advisory boards to foster ongoing dialog and collaboration.

These steps can help your organization further solidify its commitment to building a customer-centric organizational structure. Of course, it’s not easy and you may need help. One resource is your BOD.

6 Ways Your Board Can Contribute to Customer-Centricity

The BOD plays a crucial role in shaping the organization’s strategy and culture. Its members must champion the cause of customer-centricity from the top down, ensuring it remains a priority in all strategic decisions. This includes allocating resources, setting performance targets, and holding senior management accountable for delivering on customer-centric objectives.

Wonder how the BOD can actively contribute to this endeavor? Here are six ways its members can provide invaluable leadership and guidance to build a customer-centric organizational structure that drives long-term value creation and competitive advantage.

• Set Strategic Priorities: The BOD is responsible for setting the organization’s strategic priorities and goals. By explicitly prioritizing customer-centric outcomes, a clear message is sent to management and employees about its importance in driving sustainable growth and success.
• Align Resources: In addition to setting priorities, the BOD allocates resources, including financial investments and talent. To support a customer-centric organizational structure, focus budgets on customer-centric programs, initiatives, and technology investments that enable the organization to better understand and serve its customers.

• Oversee Performance Metrics: The board monitors and evaluates KPIs. Board members should ask for KPIs related to customer-centricity and use these to assess the organization’s progress and performance. By regularly reviewing these metrics, the board can identify areas of strength and opportunities for improvement.
• Champion a Customer-Centric Culture: Board members serve as advocates for building a customer-centric culture within the organization. Through their actions, words, and behaviors, they demonstrate a commitment to prioritizing the needs and interests of customers above all else. This may involve sharing success stories, recognizing employees who embody customer-centric values, and reinforcing the importance of customer-centricity in decision-making processes.
• Hold Leadership Accountable: The BOD holds senior leadership accountable for delivering on customer-centric outcomes and driving cultural change throughout the organization. This includes evaluating the performance of executive leadership based on their ability to foster a customer-centric mindset, align organizational structures and processes accordingly, and achieve desired outcomes in terms of the established measures.

• Stay Informed and Educated: We encourage the BOD to stay informed about emerging trends, best practices, and innovations in customer-centricity. We recommend providing ongoing education and professional development opportunities for the BOD and the leadership team. This may involve attending industry conferences, participating in workshops, and seeking input from external advisors with expertise in customer-centricity.

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Building a customer-centric organizational structure requires a fundamental shift in mindset and operations. By embracing customer-centricity and aligning organizational structures accordingly, your business can unlock significant value in terms of customer acquisition, retention, and loyalty, ultimately driving sustainable growth and profitability. Learn more about the merits of a customer-centric organization in the keynote “4 Game Changers for Every Stage of Growth.”