Customer centricity is one of the critical product strategies in the PLG (Product-led-growth) era. It is not a new concept of product strategy, but many successful companies with PLG strategies adopt a customer-centric approach. Traditionally, the most common product strategy is a product-centric approach, like building a product with the features that the companies are proud of. However, if it doesn’t provide a positive customer experience, it won’t survive in this competitive digital product market.
What is the customer-centric approach?
A customer-centric approach prioritizes customers in every decision-making process. It focuses on positive customer experience and customer needs. The customer-centric approach invests more time in customers and collecting user feedback, and the main task is providing customer support. Customer lifetime value is critical for the customer-centric approach because it generates revenues through loyal customers who repeatedly use the product.
The customer-centric approach to product development
According to HBR, there are five stages for adopting the customer-centric approach.
- Adopt a customer-centric mind
- Foster a customer-centered data culture
- Prioritize customer-centered digital transformation
- Purse Customer-centered operation transformation
- Embrace a customer and employee-centered workplace
The customer-centric approach always starts with knowing the customers and building the customer knowledge. Adopting a customer-centric mind is not only for a single team; the entire organization should align with a customer-centric mindset.
Once the organization understands the customer-centric mindset, it is crucial to share the customer insight data with each team. Customer insight data can be gathered through qualitative and quantitative research, including surveys, interviews, and customer feedback.
Based on customer data, an organization can identify overall friction in CX(Customer Experience) and determine what to be improved for a better experience and product value. And the product, design, marketing, and sales team should share the data, and see what needs to be prioritized to build a customer-centric product roadmap. Alignment with the entire team is the main task for successful customer-centric product development.
Benefits of Customer-Centric Approach
Sustainability is the most significant benefit of a customer-centric approach to product development. It keeps moving forward to satisfy customers' needs and provide the best product experience, so it is sustainable and a long-term product strategy.
Low risk of Product- Market fit failure
Since the product starts with customers' needs, it has a low risk of failing product-market fit compared with the product-centric approach. During product development, it keeps getting customer feedback and changes the priorities based on customer needs, and it can create strong customer loyalty through product improvement.
The best starting point to adopt a customer-centric approach is market research. Before conducting the customer research and building customer segments, you will need to understand how the existing customers react to the product and gather customer knowledge. However, a customer-centric approach could be expensive because it needs market research and user interviews and takes time to build trust and customer relationships.
The most crucial part of a customer-centric approach is team alignment. Each team fully understands and shares the customer insight data and product roadmap, including the product, design, marketing, sales, and customer success team.
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