CEOs: Data Shows It’s Time To Build a Customer-Centric Company. Here’s How to Get Started

Every company is constantly navigating change and working to get its strategy right, almost as if answering a call to the motto “disrupt or be disrupted.” Leaders dream of coming up with a strategy that delivers innovative solutions that trounce the competition (until new competition comes along), or that leads to creative breakthroughs that have the power to transform humanity—even save lives. And if they can get there, the reward is the pot of gold—the revenue and profit to survive in hard times and thrive in good times, year after year.

However, amid all difficult economic circumstances and unpredictable political situations, what sometimes gets forgotten is the essence of why a company even matters to the world in the first place. It matters because of its customers. If there are no customers, no company will stay in business for long. That being customer-centric is important is an understatement; it is the heart of why business exists. Thus, getting strategy right is about making customers central to any business strategy.

We define customer-centricity as follows: orchestrating all company activities for its target customers’ success at a profit. Therefore, customer-centricity demands that companies remain in constant conversation with their customers, identify strategic insights that emerge from the dialogue, and act on them to navigate change and transform how they do business. In the end, customer-centricity is about working together, delivering jointly developed solutions that create mutually beneficial outcomes for both the supplier and the customer. That means strategy requires you to look to your customer, not just to your competitors and the market, to set your strategic direction.

The biggest barrier to getting customer-centricity right is conflating it with consumer-centricity. The latter involves customer satisfaction surveys, net promoter score tracking, mapping customer journeys, keeping the customers engaged via a responsive website, using chatbots and AI solutions, and so on. Highly valued consumer-centric brands like Apple, Google and Amazon do exactly this. They deliver more value than their customers expect.

But what does customer-centricity look like when you are in the business-to-business domain? What if you were like Maersk competing in the shipping industry and your customers are other organizations like Kotahi, not individual consumers? How do you achieve an impressive year-on-year, profitable growth with your customers, while aligning your strategies, value propositions, supply chain processes, and resources?

This will be our focus, the B2B arena, because customer-centricity is both different and less well understood there, despite the fact it’s the bigger market. Behind the scenes of the glamorous B2C market is the global B2B market, valued at $14.9 trillion (about four times the size of B2C) and accounting for almost 80 percent of the global daily transactions. All told, there is a 10 times bigger profit pool if you also look to B2B and develop customer-centricity there.

Even the retail-customer-focusing tech giants Apple, Google and Amazon make billions of dollars in their business partnerships with high-tech companies through software and services deals. Consider, for example, Amazon’s collaboration since 2022 with Italy-based automaker Stellantis to deliver software by 2024 for millions of Stellantis vehicles globally, including brands like Jeep, Chrysler, Fiat, Ram and Peugeot. This partnership to codevelop the software platform, which leverages AI and cloud solutions to create personalized, intuitive in-vehicle experiences for entertainment, Alexa-enabled voice assistance, navigation, vehicle maintenance, e-commerce marketplaces, and payment services, is a part of the Stellantis’s ambition to invest more than $33.7 billion through 2025 into software and electrification. It is helping both companies move forward into business breakthroughs. More examples of Amazon’s partnerships in the government context are its $600 million deal with the CIA in 2013, followed by a new “AWS Secret Region” for the U.S. intelligence community and U.S. government customers in 2017, and a $10 billion cloud computing contract with the U.S. National Security Agency after a very public lawsuit dispute with competitor Microsoft in 2021–2022, all of which showcases the importance of B2B partnerships for these large tech companies.

In B2B, customer-centricity is more than customer satisfaction surveys and so forth. At a basic level, it usually starts with negotiating and renegotiating contracts, designing tailored value propositions, developing cutting-edge digital sales journeys, making sales-growth predictions through the latest data-driven analytics, and mitigating the endless risks that come with two or more organizations dealing with each other.

At an advanced level, customer-centricity for business customers means having a business strategy that incorporates the customer’s voice. Our research shows that B2B companies aspiring to be customer-centric ensure that the voice of their business customers is represented in the boardroom when business strategies are formulated. This saves them from the classic risk of making strategy discussions the equivalent of a ritual rain dance: it has no effect on the weather that follows, but it makes those who engage in it feel that they are in control.

Business customers are the most important source of information about the market (and thus, information that informs strategy), as they provide firsthand insights not only on industry developments and innovations, but also on shaping commercial innovation trends through their own strategies that will influence the future decisions in their business with the supplier firm. For any business strategy to overlook business customer insights and information is an expensive risk, especially for the large customers that contribute a significant part of the company’s revenue. A case in point is Microsoft and its ill-fated Nokia acquisition. At the time of the decision to enter the device market, many of Microsoft’s customers were not convinced that this was the right strategic move. However, management went forward with the acquisition that was seven years later pulled out of devices business with Nokia. The Microsoft management would have seen it coming if they had listened to the strategy inputs of their key accounts. Since then, a lot has changed, and the company has become much more customer-centric under the leadership of Satya Nadella.

When Maersk first began a strategic dialogue with its business customer Kotahi, it realized that there was not enough alignment between the top management teams. Also, the sharing of strategic plans was missing, including a mutual go-forward strategy across the supply chain network for ocean transport, ports and landside logistics. In some cases, the missing communication was blocking the customer’s approval of new value proposition proposals from Maersk. As a result, there were few joint activities to broaden the relationship. What was needed was a customer-centric approach, because Kotahi was an important customer for Maersk.

Making the voice of the customer heard in the boardroom was key for further success. The meetings in Copenhagen showed the companies that there was massive value just sitting there, if they could talk and unlock it together.

Excerpted with permission from TRIPLE FIT STRATEGY: How to Build Lasting Customer Relationships and Boost Growth by Christoph Senn and Mehak Gandhi (Harvard Business Review Press; Nov. 19, 2024).