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Being Customer-Centric Isn’t the Complete Answer

Aug 24, 2022 8:19:02 AM

You can’t throw a proverbial rock at marketing and strategy publications these days without hitting an article about customer-centricity. And for good reason. In today's marketplace, the customer is firmly in the driver's seat - switching brands and services at a rate like never before - and companies that put their customers at the center of their business are seeing an increase in customer satisfaction, loyalty, and overall lifetime value. Forbes recently reported that 64% of companies with a customer-focused CEO are more profitable than their competitors.

Jack Welch, the former CEO of General Electric, has famously said: “We have only two sources of competitive advantage ― learning more about customers faster than competitors and turning that learning into action faster than the competitors."

If your company has somehow lost sight of the true purpose of your business, to provide value to customers, and has become too product- or operationally-focused, now is the time to get the pendulum swinging back the other way. There is no denying that today’s fastest-growing brands are differentiating themselves on excellent customer experiences. But customer-centricity alone will only get you so far. You don’t win just by serving customers well. You win by serving customers better than your competition.

Almost a decade ago, Vennli’s three-circle model was conceived, like many great ideas, on the back of a napkin. Our co-founder, Professor Joe Urbany, was trying to explain competitive differentiation to a student. He started with two circles, one to show the value your company provides and another to show the value customers are looking for:
two circles
This thinking is customer-centric. It’s the foundation for creating products that customers want and love.

But it’s not enough. Customers make choices in a competitive context. They have options. Therefore, you need to provide UNIQUE value in order to win their choice.

So, Joe added the third circle to represent the value the competitor offers customers:
three circles
This creates an intuitive three-circle Venn diagram that visualizes how customers make choices in a competitive context:
vLens Description
And each area has significance for both understanding customer choice and taking actions to build competitive advantage:
three circles w explanation
When we think about customer data in this way for our clients, we usually uncover a few things. To start with, the customer has a variety of needs of varying importance – some that may be surprising. Your company may meet a number of those needs effectively, but the competitor might also meet many of those same needs AND provide some unique value that you don’t. And, usually, the consumer has at least one need that neither offering meets that fall in the Yellow Zone. These are excellent opportunities for innovation.

These insights are often a big help in understanding why sales have stalled or are declining. If you want to win the customer’s choice more often, you’ve got to move the factors that drive customer choice into your Green Zone (i.e. your competitive advantage).

Our mantra at Vennli is just nine words: Be different from competitors in ways important to customers.

This sounds simple, but it’s not easy. The reality is there is a lot of complexity in applying this nine-word prescription. You’ve got to create value that matters deeply to customers, is different from competitors, and is based upon unique company resources and skills. The goal is to win the customer’s choice.

So, to go back to Jack Welch’s quote, not just any customer data will do. Specifically, you need to understand how your customers make choices before your competitor does. If you place all your focus on your customer and lose sight of what is going on in your market, you’re left with a huge blind spot.

Yes, leading brands have to understand their customer and provide amazing customer experiences, but, to win market share, they also have to be different. This is what will build a strong, long-lasting brand.

Vennli
Written by Vennli

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