Customer driven

From CEOpedia | Management online

Customer driven is combination of plans, offerings or strategies motivated by customer's demand or expectations. Moreover, it is showing great attention to figuring out what customers demand and assist them to obtain it.

Being Customer Driven

Being "Customer Driven" is more than just being in touch with customers and supply them with their needs. Being Customer Driven means (Cristiano, J.J., Liker, J.K.,White, C.C 2000, p. 287-289):

  • Building and developing relationships with customers to understand their needs and following that fulfilling these needs at best,
  • Realizing the customer's state in both with your company and their own customers,
  • Possessing reliable and concrete information which is effectively passed on to the customer,
  • Making sure of availability of staff to help your customer when needed,
  • Communicating with your customer when your processes change to make sure customer benefits the relationship in highest level,
  • Asking inquisitory questions and giving precise answers.

Customer-driven Strategy Definition

Customer-driven strategy is very crucial business philosophy which all companies must adapt. This concept gives a broad abstract of the key points of customer-driven strategy and suggestions critical execution advice and success components. Customer-driven strategy is focused on meeting the needs of the company's factual and potential clients and consequently supplying the goals of the organization, such as profit or service in a public service company. The customer-driven strategy states that long-term profits can be achieved only by customer attraction and retention (Desouza, K.C., Awazu, Y., Jha, S., Dombrowski, C., Papagari, S., Baloh, P., Kim, J.Y 2008, p. 35-37). Regardless the industry - vertical or division in the company, customer-driven position is the best position a company can be in because this position plays a crucial role in quality process.

Elements of a Customer-Driven Strategy

In modern business environment where the competition is high, c company can gain edge-cutting competition advantage by focusing on the problems and the needs of the customers. A happy customer is more likely to be sticky and royal customers and this drives new business opportunities to your company. In addition, companies’ marketing strategy should be driven by focusing on customers who would benefit the most out of your products and services. This kind of strategy must include components like identification of the targeted markets and strategically acting towards the market needs. It must also contain strategies of customer retention and strategies of gaining new business growth opportunities.

Elements of a Customer-Driven Strategy(Hines T. 2004, p. 103-106):

A customer-driven marketing strategy focuses on a very specific segment of the market and uses marketing research to spot extensive demographic qualifications in your customer base. Knowing more about your customer means easier strategy development which will fit to these characteristics. In conclusion, in converts into time and budget utilization. In today's modern technology world, a company can easily find detailed market research at no cost which can contain valuable information regarding the targeted customers and markets which will make the marketing strategy in line with the customers needs, problems and vision.

A customer-driven marketing strategy pays attention on matching the needs of the customers and evaluates how the company's products and services can meet customer's needs. Assuming company's market research shows that its customers are highly interested in receiving value added services. This company can meet such need of the customer by providing deliveries free of charge. For instance, a dentist who works in crowded area which has limited parking spaces, can offer to his patient pick-up or drop-off services, free of charge.

  • Building Customer Loyalty

Customer-driven marketing strategies can help to develop customer loyalty, which allow recurring sales but also customer's referral opportunities. One of the very common examples of this type of strategy is where marketers implement rewards program: customers can win points every time they do an order. The collection of these points leads to free-of-charge or purchase discounted products or services.

  • Using Customer Feedback

Customer feedbacks are very important in order to do changes and improvements on the products and services so that company can continuously meet customers’ expectations. For instance, your customers can indicate they would like to have an easier return policy of your products. Making these changes and enabling your marketing strategies in line with these demands will prove that your company is highly focused on customer's expectations and valuation of their feedbacks.

  • Gaining Customer Referrals

Each company must use referral programs as part of their marketing strategy. Companies should motivate their existing customers to refer company's business to recruit new customers. Implementation of the referral programs where existing customers are awarded for referring your product and services by providing them extra discounts.

Advantages of Customer driven

Customer driven approach can provide numerous advantages to businesses. These include:

  • Improved customer satisfaction and loyalty: Companies that focus on customer requirements will be able to provide better customer service and build long-term relationships. This can result in increased customer loyalty and satisfaction.
  • Increased sales: When businesses tailor their products and services to meet customers’ needs, they can generate more sales. Customers are more likely to purchase when they find products that meet their specific needs.
  • Greater efficiency: Companies that are customer-driven are able to identify and address customer issues more quickly. This can lead to greater efficiency in operations and better customer service.
  • Increased customer loyalty: By meeting customers’ needs, companies can build stronger relationships and increase customer loyalty. This can result in repeat customers who are more likely to purchase again in the future.
  • Improved customer experience: Companies that focus on customer requirements can ensure that customers have a positive experience with their products and services. This can lead to increased customer satisfaction and loyalty.

Limitations of Customer driven

Customer driven can be an effective strategy for businesses, however, there are some limitations associated with it. These include:

  • Difficulty in predicting customer demand: Customers’ demands and expectations change constantly and it can be difficult to predict what they will want next. This makes it challenging to create plans and offerings that meet customer needs.
  • Increased costs: Developing customer-driven plans and offerings can be costly, as businesses may have to invest in research and development, as well as marketing and advertising to meet customer needs.
  • Risk of over-promising: Businesses may make promises to customers that they are unable to keep, leading to customer dissatisfaction and potential legal issues.
  • Time consuming: Developing customer-driven plans and offerings can be a time-consuming process. It requires businesses to be proactive in understanding customer needs and responding to them quickly.

Other approaches related to Customer driven

Introducing customer driven approach as a combination of plans, offerings or strategies motivated by customers demand or expectations, there are other approaches related to it:

  • Customer centricity - it is an approach of the company to shift its focus from the product or services they offer to the customers’ experience. It means that the customer’s needs and wants become the leading principle in the company’s development.
  • Customer experience management - it is an approach based on building strong customer relations. Through it companies are able to manage customers’ expectations, needs and wants and to deliver them the best possible experience.
  • Customer relationship management - it is an approach that helps companies to build a strong relationship with their customers by understanding their behaviour, needs and expectations. Moreover, it helps the company to develop strategies that are tailored to specific customer segments.

In conclusion, customer driven approach is a combination of plans, offerings or strategies motivated by customers demand or expectations, and there are other approaches related to it like customer centricity, customer experience management and customer relationship management.


Customer driven — recommended articles
Customer focus — Consumer orientation — Value innovation — Brand value chain — Buying cycle — Goals of marketing — Value drivers — Competitive product — Selling process

References

Author: Iryna Vasilieva

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