Strategic Imperatives for Customer Centric Approach

Strategic Imperatives for Customer Centric Approach

Neeta Baporikar (CAS - Salalah, Sultanate of Oman)
DOI: 10.4018/978-1-4666-2625-6.ch025

Abstract

Organizations have been forced to transform themselves from “product-centric” to “customer-centric” for various reasons. Becoming customer centric is one of the most important aims of any organization. Customer Relationship Management has attracted the attention of both marketing practitioners and researchers over the last decade. Despite, or maybe due to, the attention drawn to the subject, a clear agreement on what CRM is and especially how CRM should be developed remains lacking. It is now commonly understood that CRM involves technology, drives marketing, sales, and customer services, and is often approached as a business strategy to create value for an organization through the creation of profitable long-term customer relationships. Significant progress has been made in identifying and researching the components of CRM individually. The roles of CRM applications, customer knowledge, customer satisfaction, and a customer-centric strategy have all been subject of research lately. However, to the best of the author’s knowledge, no comprehensive research has been conducted to identify and understand the strategic imperatives for developing customer centric approach, and that is the core objective of this chapter. Moreover, the advancements in society and technology leading to convergence of information, communication, and technology, coupled with acceleration in globalization, competitive environments, and changing customer’s preferences have created new challenges as well as opportunities for leveraging knowledge about customers. Also we have yet to find research that shows a relationship between strategic imperatives and customer centric approach.
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Background

Strategy refers to long term plan while as the term strategic refers to the approach and the term “imperative” refers to something that is “not to be avoided or evaded; obligatory; binding; compulsory”. It is derived from the Latin word imperatus and the past participle of imperare, to command. It basically relates to the will to influence the behavior of another which means there is a power to restrain, control, and direct and also which is not to be avoided or evaded, which means that it is necessary or even a duty. Imperative thus refers to “a moral obligation or command that is unconditionally and universally binding”

What businesses today needs are customer service standards. For an organization to be ‘market-led’ it must be ‘customer-driven’. The only way to embed customer service into the culture of a business is through a ‘management-led’ obsession for being ‘customer-driven’. In that sense, there is a strategic imperative for organizations and businesses to adopt customer centric approach. Businesses need to understand that customers are not something who is bolted onto a business at the end of a process. They are rather the vital core element without which the business would not exist. To survive and grow, a business needs to make profit. In order to make profit, the business should be able to find people who are willing to pay more for the products and services than they cost to avail them. Thus, it clearly means customers are the profits of a business.

This may look very simplistic, but its implications are meant to be understood. If all profits of a business come from customers, then it makes sense to focus business on and around this source of profit. Looking at this process, one can deduce that the employees of a company create and add value directly or indirectly to the product or the services so that the customers are willing to pay the price they pay to avail them. We can thus say that if an employee is not serving a customer directly, then he surely is serving someone who actually is serving the customer directly. Directly or indirectly all employees in an organization are actually serving the customer. This leads to the customer centric organizational structure of an enterprise (Figure 1), which from a macro perspective should consist of two main layers:

Figure 1.

Customer centric organizational structure

  • 1.

    Of people who serve the customers directly, and

  • 2.

    Of people who serve people, who serve the customers directly (i.e. people in layer 1).

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