I am a fan of customer centric marketing.  It drives much of our product inspiration at Crooked Chimney.  I’m a huge fan of professor Peter Fader at The Wharton School, who literally wrote the book on customer centricity, which I reviewed here.  I have a Google Alert set for “customer centricity,” but most of the time, the results returned are not what I’m after.  Customer centricity is simply not what most people think it is.

Most often, the idea of customer centricity is mixed up with customer focus, or what I would label as experience centricity.  You see, strategically, it makes sense for a business to choose a “centric.”  Think: which needle are we going to move at the heart of our business?  For a business that is highly focused on its customer service and experience, like Nordstrom or Zappos, the retail experience is the variable they choose to centrally drive.  Nordstrom and Zappos are experience centric.

Another popular “centric” is productcentric.  Apple is the prime example of a company that delivers decent, but not excessive, service, but the product.  The product is the variable they choose to centrally drive, and in reality, they do not expend inordinate amounts of energy worrying about all the things customers might seek.  Above all else, Apple focuses on delivering outstanding and meticulously designed products.

What about Walmart?  I would call Walmart value centric.  They are driven first to deliver every day low prices on a huge inventory of goods.  This central motive influences every area of their business decision-making.

Coca-Cola and Google might be considered ubiquity centric.  The variable they drive as their central objective is availability.

Fader defines 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 to maximize their long-term financial value to the firm.”  In customer centricity, the goal is to move the needle on customer lifetime value.  A customer centric approach to marketing is analogous to managing a portfolio of customers as assets, much like stocks in a portfolio.  Different behavioral classes of customers play different roles in the balance between value, risk, and ultimately growth of the firm.

No one can argue with the success that companies like Walmart or Apple have had with their respective “centrics.”  However, the nature of competition is evolving.  Cloud computing and data science tools enable new intelligence for marketers.  Customers are empowered, armed with an endless trove of information and alternative buying options at their fingertips as they walk retail aisles.  Switching costs are nearly nil.  New strategies will emerge to help buyers and sellers find relationships that maximize their collective value to one another.

With an experience centric strategy, a company makes investment decisions that govern the service experience it delivers.  The goal is a measure of customer satisfaction, confidence, or even delight. The strategy and brand promise or usually tied together, making this a one-size-fits-all strategy.

With a product centric strategy, a company makes investment decisions that drive development of features and design for its products.  As the quality of product often represents the company’s brand promise, this is also a one-size-fits-all strategy.  Indeed, a subpar product release can be damaging to the overall company image.

With a customer centric strategy, a company varies product and service attributes in ways that create the most incremental lifetime value for the firm, potentially on a one-to-one basis.  The goal is to maximize overall customer equity.

As one of our first tools to prepare companies for the next generation of marketing, Crooked Chimney has developed a cloud platform for calculating customer lifetime value at an individual customer level and in real-time.  Think of this as LTV-as-a-Service.  After all, to make intelligent portfolio decisions, one must first have an effective way of calculating accurate customer lifetime value, the complexities of which will be a topic for an upcoming post.