Knowledge for product managers
|Customer centricity as the key to success
How to revolutionise your B2B product strategy with the customer in focus.
A practical report by Shilu Mistry, Design Thinking expert
In the highly competitive world of B2B products, customer centricity is no longer optional – it is a strategic necessity. Companies that prioritise their customers’ needs and preferences foster greater customer loyalty, increase customer retention, reduce costs and ultimately develop more profitable products. In this article, we’ll look at why customer-centricity can play such an important role for companies.
The importance of customer centricity
By placing more emphasis on customer-centricity, companies ensure that their products actually meet the needs of their customers. The results speak for themselves:
- Increase in sales: Companies with a customer-centred approach are 60 % more profitable than those without.
- Customer loyalty: Improving the customer experience can increase customer loyalty by up to 42%.
- Product success: 76% of B2B buyers expect companies to understand their needs.
- Cost efficiency and risk minimisation: Addressing user needs at an early stage reduces development costs and risks.
Practical example: Customer-orientated strategy at John Deere’s Precision Agriculture
John Deere’s Precision Agriculture pursues an innovative and customer-oriented strategy by using technologies such as GPS and data analysis to optimise agricultural operations. This includes:
- Deep customer insights: research to understand the challenges farmers face.
- Collaborative development: Involving farmers to gain feedback.
- Product optimisation: Use of data to continuously improve solutions.
This customer-centric strategy has significantly improved farmer efficiency and productivity and helps John Deere remain a sustainable leader in the industry.
Methods for customer-centred product development
We have brought together the most effective methods for customer-centred product development. These can help product managers and their teams to revolutionise business decisions and consequently their product strategy:
1. Customer insights
By incorporating insights from customer research into your product vision and goals, you ensure that they are focused on solving key customer problems and delivering value.
2. Customer personas
Using data from surveys and interviews as well as feedback, personas can be created that represent different customer segments and ensure that the product strategy takes into account the diverse needs of the target group.
3. prioritisation of features and roadmap planning
Customer feedback and journey maps are an effective means of prioritising features that address the most important customer problems and offer the greatest added value.
4.Iterative development, testing and co-creation
We recommend an iterative development approach that incorporates continuous customer feedback. Methods such as beta tests, product advisory boards or co-creation workshops and hackathons are the most suitable.
5. Data-driven decisions
Usage analyses and customer feedback analyses help to make well-founded decisions about product improvements and new functions.
Winning internal stakeholders for the customer-centric organisation
Gaining buy-in for the customer-centric organisation requires a strategic effort. The vision must be aligned, the values demonstrated and concerns dispelled at all levels of the organisation:
- Alignment with strategic objectives and corporate goals: These should be geared towards market share and innovation targets.
- Emphasising the competitive advantage: It helps to emphasise the extent to which understanding customer needs creates a competitive advantage.
- Utilisation of data-driven approaches: Presenting financial benefits and ROI using case studies such as John Deere can be beneficial.
- Sharing customer references: Many stakeholders take away the importance of fulfilling customer needs and addressing identified pain points.
- Promoting cooperation within the company: Promoting a consistent customer-centric approach in all departments brings all teams on board and creates a truly customer-centric organisation.
Measuring success in customer-orientated product development
To measure the success of customer-centred product development, the following metrics should be monitored:
Customer Satisfaction (CSAT) or Net Promoter Score (NPS): Regular measurement of customer satisfaction and loyalty.
Customer retention rate and customer lifetime value (CLV): Monitoring the retention rate and CLV to determine the long-term value.
Product usage analyses: Analysing usage data to identify areas for improvement and innovation.
Sales growth and market share: Track sales growth and market share to measure the impact of the customer-centric strategy.
Fazit
A customer-oriented organisational structure in B2B product management is crucial for the development of a successful product strategy. By systematically integrating knowledge about their own customers, product managers can create products that are precisely orientated to their needs, promote satisfaction and achieve business success. A customer-centred business strategy ensures that the product remains relevant, competitive and valuable to users.
Learn how to put your customers in the spotlight
Our training provides you with the essential skills and knowledge to accurately segment “THE” customer into customer groups, analyse their needs and develop successful product strategies.
Sources
6 Dinge, die kundenzentrierte Unternehmen anders machen – Forbes
“…customer-centric companies are 60% more profitable than companies that aren’t.”
Improving the business-to-business customer experience – McKinsey
“…customer-experience leaders in B2B settings have on average higher margins than their competitors.”
“… higher client-satisfaction scores, reductions of 10 to 20 percent in cost to serve, revenue growth of 10 to 15 percent, and an increase in employee satisfaction.”
Compete in B2B through customer centricity – Deloitte
“(B2B customers)… want a cohesive journey that resonates with their individual buying preferences.”
Customer Excellence in Industrial Manufacturing – Deloitte
Boosting growth in the industrial B2B sector with customer-centric strategies – especially in times of crisis
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