Customer Centricity in E-Business

The focus on customer centricity has been in place in many industries and spheres of business for several decades. Customer experience has been significantly enhanced by customised operations and services that put the consumers at the centre of business processes thus providing them with more power as stakeholders (Fournier 2011). Practically, in consumer-centric environments, customers have the capability to influence marketing and organisation strategies, alter product range and appearances, and serve as the creators of brand and business images. The rapid development of information and communication technologies produced a powerful influence on consumer dynamics and behaviour. For the companies and firms that rely on e-commerce, customer relations are just as important for the overall business success and competitiveness in the industry. However, due to the differences between customer behaviours in brick-and-mortar and online settings, e-commerce businesses have to adjust their customer-centric approach to their virtual environment.

Customer Centricity as a Concept

As a concept, customer centricity has been a focus of business experts for a while. Its influence on business performance has been under discussion for about five decades (Shah et al. 2006). In the past, customer centricity used to be a topic for arguments and speculations. These days, its importance is widely recognised, and the concept is applied in a large number of industries. The main principle of customer centricity is the alignment of company operations, products, and services with the needs of their consumers (Fader 2012). In other words, instead of focusing on selling their products to consumers, customer-centric businesses concentrate on satisfying the needs of their consumers.

Customer centricity is a beneficial strategy for a business organization. First of all, it helps to power and promote a strong brand image connecting it with the focus on service provision and customer care excellency (Bucci 2012). Secondly, in the contemporary world where customer experience is highly appreciated, businesses that operate using customer-centric strategies are able to add value to the goods and services they offer, and thus increase their revenue (The journey toward greater customer centricity 2013). Thirdly, customer centricity allows businesses to cover their consumer segments with a higher degree of thoroughness and engagement. In particular, the researchers from KPMG (2016) define the use of customer-centric models in businesses as operating “from the inside-out and the outside-in” (p. 5). This statement points out that the insiders of businesses such as staff members, leaders, managers, and service providing teams are able to connect with their consumers, receive responses, and use them for the advantage of the business and the further enhancement of customer experience. In that way, customers and businesses are involved in an ongoing interaction that generates benefits for both parties.

Challenges of Customer Centricity

Apart from its numerous advantages, customer centricity also brings a variety of challenges for the companies that embrace this approach. In fact, as noted by Shah et al. (2006), many modern companies face obstacles and experience difficulties attempting to become customer-centric. The major challenges related to this strategy are the need to “read customer’s minds”, the difficulty of shifting organisational structure, culture and processes from product centricity, and the adjustment of financial metrics to the new strategy (KPMG 2017; Shah et al. 2006).

Moreover, Viehland (2000) predicted that in the 21st century, consumers are going to become more and more tech-savvy and informed. As a result, attempting to focus on the satisfaction of their needs and wants, companies will have to get used to interacting with educated, smart, and aware customers who know their value for businesses. PWC (2014) states that one of the main challenges of customer centricity is that the consumers are getting used to easy shopping and service experiences that can be assessed at any time of the day. This tendency makes them expect businesses to stay “always on” (PWC 2014, p. 1). Practically, this statement signifies the need for businesses to input much more effort in customer relations than they would be relying on the old-fashioned 9 am to 5 pm schedule.

Customer Centricity in E-Business

The integration of modern digital technologies into the field of commerce resulted in the emergence of e-business where marketing and commercial operations are carried out online using digital methods. Just like all the other types of businesses, e-business firms faced the growing importance of customer satisfaction and customer experience for the organisational performance. Since e-businesses operate online and interact with their consumers digitally, their approach to customer relationship management was different from the one used by retailers operating through brick-and-mortar sources.

First of all, due to operating online and offering a better degree of convenience, easy access, and around-the-clock availability, e-businesses enjoy a higher level of customer satisfaction (Kumar & Kumar 2014). At the same time, e-businesses do not have the level of interpersonal communication of brick-and-mortar service providers, which weakens their positions in terms of customer relationship management. Moreover, e-businesses have to rely on a set of specialised means for customer support. Attempting to engage customers, promote their services, and retain the existing consumers, e-businesses tend to overload them with emails and spam (Kumar & Kumar 2014). The latter produces a strong negative impact on customer experience. Finally, another significant challenge faced by e-businesses revolves around the difficulty to measure the costs of retained versus newly attracted customers, the required input in customer experience management operations, and the value of benefits acquired (Kumar & Kumar 2014).

Analysing the information presented above critically, it is possible to make a conclusion that e-businesses have to rely on thorough and repetitive customer base and market research in order to learn how to navigate the available customer centricity strategies. Also, as specified by Jain (n.d.), information is one of the most valuable assets a contemporary organisation can have. Operating online, e-businesses have the capacity to collect the necessary information related to customer needs. However, they need to approach customer market research creatively because consumers seeking online experiences may be less willing to participate in lengthy surveys and answer open-ended questions.

Examples

One of the examples that can be explored for the purpose of researching customer centricity in e-business is the case of Dow Chemicals. This is a well-known producer of agricultural, plastic, and chemical products. In the middle of the 1990s, Dow Chemicals started to operate as an e-business establishing its online presence and starting to sell its products via a website (Chandran & Gupta 2004). Among the challenges revolving around the shifts in organisational structure and culture that were mentioned by Shah et al. (2006) as some of the essential issues in customer centricity, Dow Chemicals also faced technological challenges. The level of customer experience provided by their first website interface was insufficient. The e-commerce strategy required changes and eventually adopted customer-centred management of orders and purchases, personalised interface with product-related information, and the function of order tracking that helped consumers stay informed.

Another e-business that is known for its customer-centric strategy is Amazon.com. This business started out as an online bookstore. Knowing its disadvantage based on the lack of hands-on experience for customers and personal interactions, Amazon.com added a series of functions such as the option of searching books by their contents, suggestions of related or similar products, quick checkout process, and the ability to view some pages of selected books (Amazon.com 2006). As a result, this e-business managed to beat many of its brick-and-mortar competitors by providing services that made shopping online easier and faster than physical shopping.

Moreover, one of the major advantages used by most e-businesses is the customised supply chain. This strategy allows them to carry out fast deliveries of products through overnight and one-day shipping options. These features are loved and appreciated by consumers. Consequently, some businesses used them as value-added strategies. As a result, this ability comprises another powerful advantage of customer-centric e-businesses encouraging consumers to prefer e-shopping to physical shopping.

References

Amazon.com. 2006, Web.

Bucci, D. 2012. Customer centricity – why now more than ever!. Web.

Chandran, M & Gupta, V. 2004. Dow Chemicals’ consumer-centric e-business strategy. Web.

Fader, P. 2012. Customer centricity: focus on the right customers for strategic advantage. 2nd edn, Wharton Digital Press, Philadelphia, PA.

Fournier, SA 2011. ‘The uninvited brand’, Business Horizons, vol. 54, no. 3, pp. 193-207.

Jain, VP. n.d. Importance of information flow, customer relationship management & customer satisfaction in strategic management of e-commerce. Web.

The journey toward greater customer centricity. 2013. Web.

KPMG. 2016. Seeking customer centricity. Web.

KPMG. 2017. The truth about online consumers. Web.

Kumar, MP & Kumar, TS. 2014. ‘E-business: pros and cons in customer relationship management’, International Journal of Management and International Business Studies, vol. 4, no. 3, pp. 349-356.

PWC. 2014. The Cluetrain Manifesto and embracing the ‘always on’ customer. Web.

Shah, D, Rust, RT, Parasuraman, A, Staelin, D & Day, GS. 2006. ‘The path to customer centricity’, Journal of Service Research, vol. 9, no. 2, pp. 113-124.

Viehland DW. 2000. ‘Critical success factors for developing an e-business strategy’. Research Letters in the Information and Mathematical Sciences, no. 1, 1-7.