Learn how to center new product development around your customers. Check out our blog post on customer-centered new product development.
You arrive at your hotel after a six-hour flight, exhausted and ready for bed. But an aloof front desk associate says there’s a 15-minute wait for the only working elevator—or you can take the stairs to your seventh-floor room. When you finally lug your bags up six flights of stairs, your key doesn’t work.
Now imagine—instead, a friendly clerk takes your luggage and lets you know they only have one working elevator at the moment. The clerk sincerely apologizes for the inconvenience, but offers to deliver your bags to your room and offers you a free dinner at the hotel restaurant. When you unlock your door easily with the hotel’s app, you’re welcomed with a handwritten note, complimentary snacks, and a bottle of water on the desk. Your luggage arrives an hour later.
The same central problem exists in both scenarios. The difference lies in the details of the customer experience (CX)—and that’s true whether you’re running a hotel or a SaaS product team. And how you respond to customer feedback, whether it’s product- or service-based, is what will set your company apart from your competition.
According to Zendesk’s CX Trends 2022 report, 61% of customers say they would switch to a competitor following just one poor customer service experience with a company. However, 74% say they would forgive a company for its mistake if they otherwise receive excellent service.
Your customers want to know your business prioritizes not only their needs but also their interests and their investments in your products—and customer centricity encompasses both. If your company isn’t yet focusing on customer centricity—and further, customer-centered new product development—it’s time to rethink your strategy.
Defined literally, one may say customer centricity means putting customers at the center of decisions. And while that definition is a good starting point to broadly explain customer centricity, there’s a bit more to it than simply listening to your customers. That’s because customer centricity is an organizational mindset that’s woven throughout the fibers of every part of an organization, not just customer-facing teams like support, success, and sales.
In this article, we address customer centricity—and some of its nuances—through a lens of product development, but it’s worth noting that many parts of our definition are applicable to the broader organization’s contribution to this mindset.
At UserVoice, our product development process is customer-centric, as well.
This approach places emphasis on gathering, tracking, and acting on customer feedback with the end goal of developing products customers truly love and get value from.
It doesn’t take long for customers and other businesses to figure out if an organization has (or lacks) customer-centric values. The same brands that make great customer centricity examples also tend to be the ones with loyal customers and the most innovative products.
The name of the customer-centricity game for modern businesses is personalization. Netflix recommends TV series and movies based on user profiles and the ratings these users have assigned to programs within their platform. Netflix gives the user the power to provide direct feedback about their preferences—which means users receive specifically tailored viewing recommendations.
Bottom line: Netflix uses customer “feedback”—first-party data—to inform its product decisions. The streaming giant is able to make these recommendations because it puts its customers first and considers user experience data to do it.
With Netflix, each user has a custom experience that is focused on them—not a buyer persona or ideal customer profile (ICP).
Luxury retail brand Nordstrom has launched the Nordstrom Analytical Platform (NAP) to enhance service and improve product discovery. The company uses AI to suggest products for its shoppers. It’s an alternative method to market research and keyword searches for connecting with its audience—and it’s much more personalized. Customers receive AI-powered suggestions and can accept them (or not), which makes the software learn user preferences better and more quickly.
Stitch Fix seems to be a brand that truly practices what it preaches with its human-centered styling technology. The company sends each new member of its customer base a personalized “style quiz” to discover the user’s brand, fit, and color preferences, budget, and willingness to wear something “out of their comfort zone.” Stitch Fix then uses AI algorithms along with its human stylists to gain a competitive advantage and create client recommendations for clothing, shoes, and accessories.
These two sources of “intelligence” help data scientists collect and analyze as much data as possible, and all client responses (especially “rejections” of shipped garments) are considered and incorporated into their styling algorithms carefully. Not only are Stitch Fix’s physical products centered on the customer experience, but its algorithm becomes “smarter” over time, as well.
Because of the success of Stitch Fix’s customer-centric product and its data-driven style matches, the company increased its client base and now serves more than four million customers.
Let’s start with the obvious: a customer-centric approach helps product teams create products customers love. Putting genuine, articulated customer problems at the core of product development not only ensures customers’ evolving needs are met, but also helps product organizations reduce the risk of building the wrong thing. It’s win-win.
Another big benefit: an improved customer experience. In today’s increasingly competitive landscape, consumers have the luxury of choice when it comes to 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 that leverage customer-centric development to help them create great ideas, product prototypes, and memorable customer experiences may see measurable impacts such as:
However, one of the most significant positive impacts is a little less concrete at first glance: Customer-centric product development can help turn average customers into passionate product evangelists. Start tracking the business that comes in through referrals, and you’ll see.
People often wonder how a customer-centric approach differs from a product-centric approach (also known as a product-led approach). Turns out—the two are not as different as many believe. They actually go hand in hand.
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.
“Being product-led incorporates customer wants and needs into a broader perspective of what’s good for the company strategically,” he explains. Being product-led requires McCarthy’s team to look at things through a wider lens and ask themselves:
“Those are kind of the three Venn diagram bubbles that people draw in product, and being customer-centric is one, but being product-centric is all three.”
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.
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