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Customer centricity focuses on understanding customers’ needs and preferences and on adapting an organisation’s service delivery processes to accommodate and satisfy those preferences in order to enhance customer loyalty — which results in increased growth and profitability. The fundamental principle underlying customer centricity is a recognition that customers — and their needs, wants, and aspirations — differ and are not static. Organisations that adopt a customer centric strategy improve their position through deeper understanding of their customers’ needs. The result is a unique competitive advantage that insulates against disruptive threats. The more customer centric an organisation is, the more time its competitors need to respond to its moves and the more likely it is to bring in new customers (PWC, 2011). There are challenges associated with customer centricity. The first challenge to become a customer centric organisation is to identify genuine needs of customers. This includes knowing how to meet these needs. Most of the time, customers do not know what sort of products/services is most suitable for them and this becomes the key role for organisations to match their products/services with customer needs. The second challenge is to develop the ability to apply this understanding to their offerings and operationalising these needs throughout the customer experience lifecycle. The third challenge is to overcome the constraints of product centric organisational structures, processes, and systems and facilitating customers’ needs and delivery of services. This can be rectified by enabling employees with the right insight into the customer needs and analytics, and decision tools can unlock tremendous value in the customer base. The next challenge is catching up with changing customers’ needs. In a fast paced business environment, where customer needs rapidly change, innovation is a key to success for any organisation. Organisations move away from closed-innovation and increasingly adopt dynamic open-innovation. To succeed, organisations do not rely just on employees’ innovative thinking but seeking fresh ideas beyond organisation’s boundaries within customers and other external stakeholders. By looking closely into the above challenges, it becomes clear that customer centricity has several pillars such as human resource management, customer relationship management, service/product development etc. To master customer centricity organisations should perform well in all pillars. They should have the right employees with the right skills and competencies to delivery unique customer experience. Employees should become truly engaged and empowered. Organisations should put customers at the heart of everything they do. They should be truly engaged and empowered. Services should be designed and developed to meet customer needs. Service/product’s quality should be defined from the customers’ point of view and hence customers’ perception measurement becomes crucial. Customer centricity encourages organisations to focus on the lifetime value of customers rather than short term profitability. Customer Lifetime Value (CLV) shows to what extent a customer has already contributed to the profitability of the organisation in the past and how much it is expected to contribute to the future profitability of the business. Two factors will determine the customer’s potential and actual value to the provider over the course of the entire relationship. One is the way the customer’s needs and propensity to spend change over time. The other is how well the provider anticipates, monitors, and responds to ongoing change in the customer’s viewpoint with appropriate service propositions. So, after acquiring the customer, the responsibility is to make sure the always offers the right services through the right channel at a price that this customer regards as reasonable and in the manner in which the customer wants to interact with organisation.
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