The key difference between customer centric and customer focused is that customer centric organizations operate by focusing their marketing efforts on customers’ lifetime value by offering a number of products that they want in different phases of life whereas customer focused organizations operate with a strong orientation towards serving customer needs. The customer is the most important aspect of an organization, and retaining customers have become extremely challenging with the increase in competition. Thus, it is essential to spend adequate time and resources to ensure that the organization is equipped with a strong customer base.
1. Overview and Key Difference
2. What is Customer Centric
3. What is Customer Focused
4. Side by Side Comparison – Customer Centric vs Customer Focused
What is Customer Centric?
Customer centric organizations operate by focusing their marketing efforts on customers’ lifetime value by offering a number of products that they want in different phases of life. Here, the objective is to acquire the customer by strong marketing efforts and continue to offer different products for a considerably long period of time. The profits obtained at the beginning of the life cycle may be low and the companies may even incur losses. However, the intention will be to cover these losses as the relationship with the customers progress over time. Customer centric companies are always attempting to figure out what are various products that they can offer their customers.
E.g. HSBC offers a number of products as per the following diagram to its customers and they attempt to acquire customers at a very young age such as 11-15 years through their live cash accounts. They offer a number of loans, usually with low interest rates up to a certain point in the life cycle and gradually increase the interest rate with the type of loans offered at the latter part of the life cycle. This way, they aim to build a lifetime relationship with the customers.
Focus on the overall quality of the products or services provided remain at the center of customer centric organizations since the customers should remain satisfied for a long period of time. In customer centric companies, the relationship between the customer and the company is not restricted to a limited number of transactions; thus, extra efforts should be made to strengthen customer satisfaction.
What is Customer Focused?
Customer focused organizations operate with a strong orientation towards serving customer needs. This is not a new concept and all businesses are continuously attempting to remain customer focused in order to enjoy higher profits. An effective customer focus has been proven to be a strong contributor to the overall success of a company where some companies have been able to achieve excellent results.
E.g. Ritz Carlton has an excellent reputation as a customer focused hotel chain and they provide a customized service for every guest. One of its policies permits every employee to spend up to $2,000 to make any single guest satisfied.
Characteristics of Customer Focused Organizations
Continuous Focus on Customer Feedback
Customer focused companies always attempt to ask the question, “What more can we give our customers?”. Thus, customer feedback plays a major role in customer focused businesses. Regularly obtained feedback assists the companies to excel in aspects that are needed by the customers.
Invest in Employees
In order to deliver an excellent customer service, the human capital of the organization should be sufficiently motivated by way of rewards in order to retain them. This especially becomes important in service related organizations such as healthcare, hotel, and tourism industry.
Continuous Focus on Improving Business
The cost of operations should be kept in control in order to offer the products at an optimum price for the customers. In order to do this, the company should maintain the operations by minimizing waste.
What is the difference between Customer Centric and Customer Focused?
Customer Centric vs Customer Focused
|Customer centric organizations operate by focusing their marketing efforts on customers’ lifetime value by offering a number of products that they want in different phases of life.||Customer focused organizations operate with a strong orientation towards serving customer needs.|
|Customer centric organizations offer a number of various products over the life of the customer.||Customer focused organization offer a single or a limited number of products over the life of the customer.|
|Customer centric is long term focused||Customer focused is short term focused.|
Summary – Customer Centric vs Customer Focused
The difference between customer centric and customer focused is mainly dependent on whether the company is interested in building long term relationship with customers (customer centric) or short term relationship with customers by making improvements to the products (customer focused). While all companies are customer focused to various degrees, it should be noted that being customer centric requires heavy investment to acquire the customers at the beginning of the life cycle, thus only cash-rich organizations are able to pursue such strategy.
1. Customer Life Cycle (CLC) and CRM. May 14, <http://www.marketingteacher.com/the-customer-life-cycle-clc-and-crm/>
2. “How Ritz-Carlton Stays At The Top.” Forbes. Forbes Magazine, 30 Oct. 2009. Web. 15 May 2017. <https://www.forbes.com/2009/10/30/simon-cooper-ritz-leadership-ceonetwork-hotels.html>.
3. Andy Hanselman. “10 characteristics of customer-focused businesses.” Management-Issues.com, 01 July 1970. Web. 15 May 2017. <http://www.management-issues.com/opinion/7075/10-characteristics-of-customer-focused-businesses/>.
1. “Hotel Eingangsbereich”The Ritz Carlton”.” By NoRud – Own work (CC BY-SA 4.0) via Commons Wikimedia