“Customer-centric product development is an approach to building products that place customers at the center of new development.”
From a study conducted by the Design Management Institute in 2014, we learned that consumer design-focused businesses like Apple, Coca-Cola, Nike, and Procter & Gamble exceeded the performance of most successful companies by an astounding 219% over the last ten years. This has led to more organizations becoming interested in consumer-centric product design. Let’s take a peek at what customer-centricity is all about.
Why is it needed? What does it mean? How can businesses adopt a more customer-centric approach?
Customer centricity means putting customers at the center of decisions. Customer centricity is an organizational mindset that needs to be practiced throughout the organization, not just customer-facing teams.
This approach emphasizes collecting, monitoring, and acting on customer feedback so that customers get value from the products that are developed.
Let’s look at how a customer-centric approach differs from a product-centric approach.
Bruce McCarthy, product management expert, author, and founder of Product Culture says customer centricity is one of three key pillars of a product-centric or product-led approach.
Ideo, a leading product design firm, explains their approach thus:
“Product design blurs the boundary between physical and digital form factors. Prototyping across a wide range of media and materials, we explode constraints to create new physical products, digital services, intangible experiences, and palpable delight.”
They define product design as an intersection between Desirability, Viability, and Feasibility elements.
So, according to that definition, customer centricity and product centricity (also called being product-led) are not mutually exclusive but rather complementary to one another and mutually supporting.
Why customer centricity
This approach helps product teams understand the right thing to design and then design those the right way. In other words, addressing genuine customer problems at the core of product development ensures customers’ evolving needs are met and helps product organizations reduce the risk of building the wrong thing.
Additionally, In today’s increasingly competitive landscape, consumers have the luxury of choice for the brands they choose to do business with. Giving customers a voice in product development and committing to listening to that voice and communicating back to them about outcomes is one-way brands can differentiate themselves.
Organizations who leverage customer-centric product development to help them create great products and memorable customer experiences may see measurable impacts such as:
- Increased customer lifetime value (LTV)
- Better customer satisfaction and net promoter scores
- Improved customer loyalty and retention metrics
And most importantly, customer-centric product development can help turn average customers into passionate product evangelists.
How can an organization adopt a customer-centric approach?
Capture Customer Feedback
Committing to being customer-centric means getting a representative view of all target customer segments, not the perspective of a vocal minority. Product development teams without a scalable system for capturing and tracking feedback from various sources may struggle to get a holistic understanding of customer needs.
Not only do organizations need a mechanism for capturing and tracking the various types of feedback they receive, but they also require an understanding of when and how to use the various types of feedback they receive. For example, when to use qualitative vs. quantitative data and bring both together in a meaningful way.
Identify and nurture target customers
In addition to a scalable way to capture customer feedback data, product teams need to segment their data. A common pitfall in this approach is forgetting that not every customer segment has an equal business or strategic value and looking broadly at all feedback. Instead, customer-centric product teams know which segments represent the most value and focus first on serving the needs of those segments.
Communicate with customers
Product development teams must commit to following up on feedback with updates and letting customers know when their ideas may not be a good fit. If customers who share feedback are not informed on what’s been done with that feedback, they may begin to feel a lack of respect. Just saying “thank you for your feedback; we’ll act on it soon” will not help.
Tacit vs. Latent Needs
Product development teams dig deeper into the underlying issues instead of the surface level ‘asks.’ Getting to the root problem often means digging deeper into requests by asking the right questions. After understanding the underlying customer problem, the product teams should look at their identified customer problems and further filter them down to address the actual causes.
A culture of customer-centricity
Being customer-centric is an organizational mindset. A random act of customer-centricity doesn’t make products that customers love once in a while. It requires a coordinated and concerted effort across all departments and units of an organization. The company needs to set up a culture conducive to collaboration, provide transparency and access to key information to critical stakeholders and empower every employee to display customer-centricity in all aspects.
Customer-centric product development represents an opportunity for organizations to serve their customers’ needs and co-create the very products that they eventually use.
This way of creating product experiences provides delight to their customers and ensures that the products developed are technically feasible and commercially viable. Hence, organizations take a customer-centric approach to product development.
~ Sheshagiri V, Author and Consultant, Product Management
In today’s times, when users have multiple options available, product managers play an extremely important role in understanding user needs and expectations, and translating to an ideal product. As such, product management is a growing field with several opportunities for career advancement. Upskill yourself in this highly in-demand field with courses in product management from top-ranked universities. Gain hands-on experience to understand how products can be designed, and how analytics will help you optimize. Connect with us to understand which product management course is ideal for you.