A while back I was having a debate with a colleague about the phrase “customer-centric.” It’s a phrase that is the cornerstone of the work I’ve done over the last 25 years and is at the heart of what we teach at Sense & Respond Learning. My colleague was saying that you can’t just be “customer-centric” because it doesn’t take into account the needs of the business. They argued that blindly focusing on customers risks the long-term viability of the company. Needless to say I disagreed. Here’s why.

We don’t blindly ignore anything

To argue that being customer-centric ignores the business is a straw man. Ignoring any part of a system designed to operate holistically is a recipe for failure. My colleague argued that focusing solely on the customer ignores things like profitability and scalability. They also argued that there are reasons to do things in a business that aren’t for the customer but rather for the long-term sustainability of the company. 

I strongly believe in the profitability, scalability and long-term sustainability of a business. However, businesses exist to provide value of some kind. The recipients of that value are customers and as long as they continue to derive value from the products and services of a company it will thrive. Decisions that are made strictly with the business’ interests at heart or that, worse, negatively impact the customer start the inevitable decline of an organization. 

“Business”-only decisions always have customer impact

“Let’s sell advertising.” 

“Let’s outsource our customer service to an offshore party.”

“Let’s change our pricing model from one-time purchase to subscription.”

“Let’s centralize IT into a cost center that services all of our business units.” 

These seemingly business-only decisions are often done to reduce costs, drive up profitability or think of new business models and revenue streams. To be clear, these are legitimate business concerns. Any responsible CEO should absolutely be thinking about them. That said, it’s naive to think that these decisions don’t have business impact. 

Selling advertising clogs up the user experience and makes your customers your product often to be optimized and exploited. This drives up frustration and churn ultimately resulting in lower usage numbers. 

Outsourcing customer service often means lower quality problem resolution. Businesses rely on satisfied customers. If their concerns can’t be fixed in a timely fashion they’ll take to the internet to share their experiences, tell their friends and, once again, churn. 

Changing a pricing model can make sense in certain industries. Does it make sense in yours? If you haven’t thought that through, consider how your customers might react to a new pricing model that now, instead of a one-time charge, hits their credit card monthly? 

Optimizing the design of your organization is always a good idea for increased efficiency and productivity. Centralizing IT as a single cost center that services every business unit seems like it makes sense from the point of view of spreadsheet. However, every business book, article and blog post from the last 20 years will tell you how this cost-cutting move hurts your teams ability to react quickly to changing customer consumption habits, new technology and competitive threats. You know what happens when your organization can’t react quickly to these things? Customers leave for more nimble, modern organizations. 

Every business decision should come with a customer conversation

The example above are just that, examples. There are lots of business decisions that are made daily with only the business in mind. Instead consider adding the customer point of view to every discussion of a “business only” change. How will this change impact our ability to serve our customers? How will this impact the customer journey? User experience? How will this impact the staff who build the products and support them? 

Inevitably there will be trade offs but if we build these questions into our decision logic we make better informed, customer-centric business decisions. We go into these changes with eyes open knowing that this cost-cutting measure or new revenue stream will have a specific impact on the people that we serve and that keep us in business. 

And if we don’t know what that impact will be — just ask your customers.