The difference between product-centric and customer-centric
The term product-centric is used to describe a company that prioritizes their product development by looking at the product portfolio - for example adding features to existing products - rather than keeping the consumer needs as an innovation driver. . Instead of involving the customer in the creation process, this approach simply relies on brainstorming within the company.
A customer-centric business places the customer at the center of their operations with a clear understanding of what their customers want or need so they can satisfy their demands. It's not about offering just another SKU, but rather new solutions.
Step #1 Look to the market for insights
With market segmentation, you try to understand who your customers are and how they are different. Understanding the different personas that use your product will help you decide which features to offer and which ones to keep out.
Keep in mind that it's not always about demographics, but about their beliefs, their motivations, their habits.
A Gen Y living in Canada’s more urbanized cities (such as Montreal or Toronto) will have different priorities and aspirations than a Gen Y living in Quebec’s rural hinterland, Yellowknife, or Calgary.
Members of different generations can share similar views and beliefs about the same topic as well (let's say, the environment). You can enhance your understanding of who your customers are by focusing less on demographics and more on what makes them unique.
Step #2 Include the consumer facing teams into the ideation process
It's good practice to keep in mind that you want every customer contact point with your brand, be it a physical storefront or an online website, or an email address or chat with a live support rep. It all matters if it's making that consumer feel important and special.
Every step of a consumer's experience with a brand can impact how he or she feels about that company. If things don't go well, it could affect that customer's willingness to buy again in the future, or dissuade him or her from buying anything else offered by that brand.
When you're looking for an innovative new idea, reaching out directly to consumers can help you get more ideas, as well as make sure your customers are on board with any new features you're planning to roll out. This might include using social media and marketing channels like email and digital ads, as well as making use of customer service team members as well as the sales team who interact with unhappy customers.
Ask questions like
What could you do to improve? or
What are we doing right now that makes you like us so much?. Asking direct questions also gives you insight into how you're viewed in relation to your competitors, so for new ideas it's a great idea to ask what customers expect out of other companies and why they don't consider trying yours.
Get as many ideas and feedback as possible before deciding on one. The more feedback, suggestions, and help you have before launching something new, the better.
Remember to share that feedback between company departments to keep the entire company well-connected to consumer insights.
Step #3 Test, test, pivot, test, test
If you want to launch successful products that will bring real results in terms of additional sales , you need to talk directly to customers so that they can tell you what their problems are and how your solution solves them.
Because understanding a customers’ needs and designing your product around them is a very complex task, we suggest using a Value Proposition Canvas.
The Value Proposition Canvas is a powerful tool to ensure a product or service is positioned around what the customer values and needs and it helps the business in the decision making and positioning of the product.
If ever you find out you were wrong, follow the path of least resistance: your consumer! Pivot your solution so that it will answer your consumer needs.
Step #4 Keep yours eyes on the market, not on your internal KPIs
Don't look only at your Top line. Top line is total sales. That doesn’t mean your consumer is happy. You can sell more, but you still have a problem.
We've all heard the old expression: If you only see what's on top of your head, you'll get a big bump on your forehead. You need to look at what’s happening beneath as well.
You need to take into consideration your bottom line as well. If you don't know how many people are buying at full price, you may be in trouble. You can always increase volume by lowering prices or offering deals, but if consumers aren't willing to pay full price for what you offer, there's no reason for them to buy at all.
When you design a product that successfully meets an actual need, the potential for repeated purchases is obvious. However, in the absence of an existing need, aggressive promotion is necessary to achieve a baseline volume of sales.
Customer-centric innovation is a systematic approach to innovation that enables long-term, profitable growth. While most companies profess to be consumer-centric, academic research has shown that the true nature of this orientation can vary greatly.
For more insights into transitioning your business from a product-centric one to a consumer-centric organization, here are a few interesting articles:
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