Customer Success! Coined in the early 2000s, it’s more than a buzzword—it’s the essence of customer-centricity. Why has this concept expanded so rapidly across all industries? Because customer centricity isn’t just a growth strategy; it’s THE primary strategy for driving value and building lasting connections. In this episode What’s Your Edge? we’ll examine customer success’s link to customer-centricity and reveal the 4 pivotal board roles in guiding leadership to master this business model.

Customer success goes beyond customer satisfaction.  It is a proactive strategy aimed at ensuring customers achieve their desired outcomes while using your product or service. Customer-centricity, coined by Dick Lee in the early 2000s, is the precursor to customer success. The concept emphasizes placing the customer at the core of business operations, anticipating their needs, and creating exceptional experiences to sustain long-term value for both your customer and your organization.

Peter Fader, a prominent scholar in customer-centricity, provides an additional layer to this concept. Fader, a professor of Marketing at the Wharton School of the University of Pennsylvania, defines customer-centricity as “a strategy to align a company’s development and delivery of its products and services with the current and future needs of a select set of customers to maximize their long-term financial value to the firm.” This definition emphasizes understanding and meeting current customer needs and also anticipating future requirements to ensure sustained business success. 

The changing dynamics of customer expectations have propelled customer-centricity to the forefront as the primary growth strategy. Today’s B2B buyer expectations have significantly changed.  IDC’s Laurie Buczek, vice president, CMO Advisory Service explains that “the current marketing and sales operating model fails in customer centricity and perpetuates the challenge B2B marketing and sales leaders face in a digital-first era — to establish relevancy, nurture, and build relationships among a growing number of influential individuals in a buying committee.” 

For B2B companies who desire to acquire and gain market share and category ownership, and to build customer trust and customer loyalty, customer-centricity is paramount. Research by Deloitte found that customer-centric companies were 60% more profitable compared to companies that were not focused on the customer, and 64% of companies with a customer-focused CEO are more profitable than their competitors. This shift in focus translates to tangible business value, such as increased customer loyalty, referral rates, and brand preference.

To appreciate the significance of customer-centricity, let’s contrast it with three other prevalent growth strategies:

1. Product/Service-centric strategies which prioritize developing and innovating products and services. These firms reflect the idea, “If we build it, they will come.” You know these companies because they make extensive investments in R&D.  Often, however, they neglect to conduct more than cursory customer or market research and as a result often create products looking for a market. 
   
2. Sales-centric strategies concentrate on closing deals. They are all about making the number. You know this company because the salespeople will sell things the company doesn’t even make or offer to close a deal. Anyone who has ever worked in a Sales-centric company can appreciate the internal chaos this approach can create. 
   
3. Market-centric strategies revolve around taking advantage of and drafting a hot trend.  We are experiencing this right now in the world of AI. 
   

What does this mean for a board of directors?  We believe that the board of directors needs to play a crucial role in steering an organization toward a customer-centric model. Board members can guide and empower the leadership team by setting a clear vision for customer-centricity, aligning it with overall business objectives, and ensuring adequate resources and support. They have a fiduciary duty to serve as champions for building the culture necessary for sustained customer success. In building a customer-centric strategy, there are four ways the BOD can support designing a customer-centric organization:

1. Architect a Customer-Centric Framework: The focus of the board here should be to work with the leadership team to develop a structured framework that aligns all aspects of the organization with customer needs and goals. Like an architect designing a building, the leadership team should outline a comprehensive plan that will integrate customer-centricity into every facet of the organization’s structure and operations. To successfully navigate the paradigm shift, a customer-centric, marketing-experienced, BOD member should sit at the table. If your board doesn’t yet have deep customer-centric expertise, now is the time to add this capability.
   
2. Create a Blueprint for Cross-Functional Collaboration:  The board and leadership team should work together to create a detailed blueprint for collaboration across the different functions and departments, ensuring a unified approach to customer interactions. Like an architect specifying the integration of different building components, this step entails defining how various departments collaborate seamlessly to provide customers with a cohesive and integrated experience.
   
3. Ensure a Solid Technology and Process Foundation: Customer-centricity requires stellar operational processes and a robust technological infrastructure. Also, like an architect ensuring a building has the necessary infrastructure such as electrical, plumbing, heating, air conditioning, etc., organizations need to map and manage critical customer-facing processes and install cutting-edge technology.
   
4. Regularly Inspect and Adjust Customer Success Performance Measures:  Architects, engineers, and contractors inspect a building to ensure it will stand the test of time. In its role, the BOD must continually review the measures to maintain the integrity of the customer-centric design. We recommend exploring the following measures along with customer lifetime value , which serves be the primary key performance indicator.  Measures such as these five will provide insight into what is impacting customer lifetime value: 
   

• Referral rates –the number of referrals from existing customers that ideally result in faster, and less expensive net new customer acquisition
  
• Retention rates –the number of customers that continue to buy from you
  
• Increased share of wallet – the increase in the amount of business from existing customers
  
• Footprint expansion –the growth the number of business units within an existing customer 
  
• Customer effort –how hard or easy it is for customers to do business with you
  

These measures can provide immediate insights into the effectiveness of your customer-centric strategy. They are directly connected to revenue and reflect the organization’s ability to attract, retain, and maximize the value of its customer base.

In a business environment dominated by increasing customer expectations, customer success has become a cornerstone for sustainable, profitable growth. To successfully leverage the paradigm shift, the board of directors can and must play an active role in architecting and designing a customer-centric organization and strategy. A key success factor is having a customer-centric, marketing-experienced, BOD member at the table. If your board doesn’t yet have deep customer-centric expertise, now is the time to add this capability. By championing a customer-centric culture, advising on strategic initiatives, and prioritizing key measures, the board can ensure your organization thrives in an era where customer success is synonymous with business success. 

If architecting, designing, and building a customer-centric organization is top of mind for you, bring my 4 Game Changers for Every Stage of Growth presentation to your team.