Operationalising a customer-centricity business model creates long term stakeholder* wealth as a result of a distinctive competitive advantage and business performance sustainability.
Many people believe that customer- centric business models are in direct contrast to stakeholder value-based models we see across the world today. (Many firms focus almost exclusively on the ‘shareholder’ as the most important stakeholder.) The reality, however, is very different. If value is optimised for the customer, the entire stakeholder community benefits. (Optimising value for stakeholder groups other than the customer doesn’t necessarily benefit the entire stakeholder community. In many of these cases various stakeholder groups will experience value destruction if the focus is on a stakeholder group other than the customer.)
Organisations are finding it increasingly difficult to drive sustainable growth through product innovation alone. For many of them, a much better source of growth is through the identification of their high value customers and developing new strategies around them. High performing businesses that are able to recognise the difference between being “customer friendly” or “customer focused” versus truly “customer-centric” are developing and capitalising on their ability to identify and understand their high value customers like never before.
If more companies embraced the principle of customer-centricity (or customer-driven capitalism) and truly made customers their priority, the quality of corporate decision-making would improve and stakeholder value would be maximised.
* Stakeholders include society, partners, investors, employees and customers.