What is the most crucial factor for companies in determining essential product enhancements and prioritizing new product designs? ‘Customer’ is the short answer. In particular, listening to client feedback, understanding their needs, and creating products to tackle these priorities.
Consumers buy products to address a particular problem. However, if the product fails to meet their expectations, they reluctantly continue to use it in a not initially intended way. This mismatch in experience leads to consumers exploring different options in the market. To avoid such frustrating outcomes, it’s vital to keep the customers and their needs at the center of product development decisions.
THE TRADITIONAL PRODUCT-CENTRIC APPROACH
When a company prioritizes the development of newer, more advanced products regardless of customer demand, it is adopting a product-centric approach. Subsequently, all the company’s processes and business operations revolve around developing and fulfilling this strategy. Such companies invest extensively in R&D to create cutting-edge products and grow by adding new product lines to their portfolio.
These days, many software companies emphasize offering a product-first experience – a recent trend. It usually means that most of its resources are devoted to creating the most refined product available. While these aren’t necessarily wrong approaches, they tend to overlook the company’s most significant asset: its consumers. Interestingly, though product-centric companies aim to solve specific customer problems or create value, they extend their product to meet everyone’s needs.
THE CUSTOMER-CENTRIC APPROACH
On the other hand, a customer-centric approach places the consumer at the center of every company decision. Their goal is to maximize client lifetime value and make customer data a valuable asset for their company. Increased Customer lifetime value also drives up a firm’s value and influences investors’ decision to continue investing in the company.
Customer-centric enterprises are relying on repeat customers to generate growth, and they strive to maximize their recurring revenues. Companies are setting up dedicated Customer Success teams to focus on these initiatives and drive maximum revenue from existing customers. The importance of the customer success role is nurturing a whole new support industry and set of tools in the SaaS world.
Which customer practices is your company prioritizing for growth? Share your views with B-TRNSFRMD!