What is Customer-driven Strategy and Why Does it Matter?

by | Oct 6, 2021 | Customer Experience, Brand Experience

Originating from the world of marketing, customer-driven strategy is often thought of in terms of branding, communications, and other marketing-specific terms, but the reality of strategy means that it should always be thought of with a bigger-picture view than that.

If you acknowledge, as most modern businesses do, that customer demand has fast become one of (if not the) most important factors driving business decision-making, then it’s a logical next step to embrace a customer-centric mindset and let consideration of customer needs permeate your business operations.

According to a recent study, a majority of businesses will be prioritising customer experience over product and price by the end of 2020.

The question is, why?

Customer-Driven vs Product-Driven

First things first, a customer-driven business mindset can be juxtaposed against a product-driven strategy in order to identify what makes it different and therefore how it plays itself out in the business context.

A product-driven strategy or approach to business, puts the product at the centre of attention, and largely tries to understand how to change the behaviour of potential customers in order to get them to make a purchase that might not otherwise fit into their pre-existing patterns of behaviour. The product is compared to market alternatives and improvements, business decisions, and strategies are built around bridging the gap and differentiating.

Customer-driven strategy, on the other hand, gives centre stage to the customer perspective – understanding existing customer behaviours and patterns, and making decisions based on the implications of those.

Understanding Customer Service In A Fast-Changing World

Meeting consumer demands has become a defining feature of the times. No matter the market, modern consumers are absolutely spoiled for choice, and customer-driven mindsets have become the norm for businesses trying to differentiate themselves from their competitors.

This means that user and customer experience are fast becoming focal points for businesses trying to secure or grow their market share, earning customer loyalty and advocacy to insulate their operations against the shifting whims of an uncertain future.

This changing approach to the market, from a product to a customer focus, can be seen in the increasing personalisation and customisation of services and products in the effort to provide customers with an experience that focuses on them, their day-to-day reality, their preferences, and their habits.

Core Elements Of A Customer-Driven Strategy

So, what comprises a customer-driven strategy? What are its core inputs and outcomes; the elements you have to be getting right if you want to consider your business customer-driven?

Identifying and targeting your market

First and foremost, market research should be a perpetual priority – an ongoing process that identifies new market segments, changes in existing market segments, and opportunities to tap into both.

Because of how central to success the customer is, a customer-driven strategy prioritises the understanding of the customer; every operation and every business decision should be informed by this understanding.

Who is the customer? How old are they? Where do they live, work, and hang out? What industries do they work in? Who are their friends?

The fuller the picture you have of your customer, the more meaningful your decision-making processes can be, and the more accurately you can meet market needs.

Identifying and meeting customer needs

The modern customer expects you to know more about what they want than they know themselves. Decades of having their attention ever more effectively competed for, combined with the proliferation of brands and businesses in almost every niche have created a situation in which customers are less loyal to brands than they’ve ever been.

A survey by PwC revealed that about a third of customers would leave a brand they love are just one negative experience. 92% would completely abandon a company after two or three negative interactions.

Being able to improve or maintain your service and product in order to meet those customer needs – both spoken and unspoken – could be the thing that keeps your company off of the market’s chopping block.

Using customer feedback to improve service quality

A customer-driven strategy is data-hungry. Every possible touch-point that can be used to gather relevant information from customers  should be used for that purpose – unless doing so would be intrusive to the customer.

One of the most valuable sources of information on what customers want or dislike is, unsurprisingly, the customers themselves. Often, customer will appreciate when you seek their feedback on organisational decisions – especially if they can see that feedback reflected in service, products, experiences and company interactions.

Building customer loyalty through service quality

While customer loyalty is hard to come by in this day-in-age, that does not mean your brand shouldn’t be trying to earn it.

Modern consumers trust the words and opinions of their friends, families, and social connections more than they do the promises of brands. The better the service your organisation provides, the stronger the bonds you will build with your customers, and the better you will come to understand their needs.

Building loyalty requires providing genuine value, so improved customer service – built around a growing understanding of your customer needs – should always be a top priority.

Turning customers into brand advocates

Ultimately, you want your customers to not only be loyal to your brand, but you want them to be so impressed by their experience with your company that they share it with their family, friends, and colleagues.

If you meet a customer need or provide a positive customer experience that is not made available by the competitors in your market, then customers will often share that experience with others. In this way, a customer-driven strategy can grow into customer-led brand advocacy.

Improve Customer Service and Customer Experience with Interact RDT

Shifting to or effectively supporting a customer-driven brand-wide mindset can be a challenge. The modern field of market research is competitive and it’s often not realistic for a company to expect to have the necessary expertise in-house.

Improving customer service is also a multi-faceted endeavour, and can involve not only CX expertise, but also user, brand, and even employee experience, to enhance the ability to meet the omnichannel needs of the customer.

At Interact RDT, we help to develop strategies and approaches to customer service and experience improvement that utilise a broad spectrum of experienced expertise aimed at forming a big-picture, whole-of-organisation view of customer interactions. Contact us today if you want to lead with a customer-driven strategy that gets results!


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