How to Balance Client-Centricity with Profitability

Generating a profitable product requires empathizing with customers, providing customized solutions, and building an environment of brand loyalty.

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“Organizations derive value adopting client-centricity using automation techniques, introducing Artificial Intelligence (AI) derived solutions and data-driven approach to sectors from non-traditional manufacturing to the digital savvy social media platform or entertainment segments, prioritizing the customers considering them as the mirror to the clients, assisting to earn profit through their own business model as a client-centricity driven business model.”

Organizational horizons are bound to technological waves moving beyond the traditional channels of engagement of customers. Starting 2020, several marketing efforts returned their digital native approach to drive their products and services. Kristi Argyilan, senior vice president of media and guest engagement at Target says, “Data is impacting almost everything that we do in marketing today”. This was the time that organizations fast-forwarded its digital-first strategy, empathizing with the customers to drive the business.

This approach is extended to non-digital products, operating in the brick and mortar business model where the brands and its product verticals aren’t prominent. In this case, customer-centricity is achieved by collecting NPS surveys, following customer feedback loops, performing beta testing with the real users and involving the customers in the product’s roadmap as customer-facing. One such example is an innovative, supporting connected option like IoT-integrated Air Fryer that was designed and available from multiple brands. Their sales hit the shelves selling 25.6 million units of air fryers from January 2020 through December 2021, where increase in sales is recorded as 76% from its consecutive previous two years. Here the focus is Customer-Led Growth where the clients and customers are mirrored prioritizing their diet conscious aspects and specific needs during the lockdown that grew the business.  

Achieve Client-Centricity generating profit during the transformation

According to research firm Gartner[1], customer centricity results in business growth. This is relatively less practical as the customer’s point-of-view is considered while shareholders or boards are often at the center stage driving business in many monopoly and oligopoly markets dominated as Product-Led Growth.

In such dynamism, be it a startup or an established organization, ‘revenue growth’ is the ultimate focus to achieve. The Strategy Pyramid, Mission and Vision are framed and cataloged accordingly. In this line of thought, customer obsession[2], an approach to use data and anecdotes to find gaps on the performance of the products to customers relative to their competitors is dominating the industries. Introduced by Amazon, customer obsession plays a vital role in achieving customer success working backwards considering customers in mind, prioritizing their requirements and driving growth.

A perfect salutary effect on this see-saw is to balance the organization’s approach considering the revenue growth and be customer centricity. This is achieved by performing a series of activities before building or tuning the business model. Yet, many organizations operate with processes, and technologies that are legacy-centric, pushing humanity away from customer engagement[4], there are new players developing assistive products using AI following client-centricity. Examples being the generative AI based code assistance, the Copilot by GitHub, Zoom’s AI companion’s realtime multi-language meeting translator, prompt to visual generating tool for branding and marketing, and many more. Effectuating the business model on such new-age products, manipulating organization’s metrics and measures, working on a calculated derivation for an interval and identifying the break even point brings prosperity and improves the organization’s maturity.

An exploratory and predictive business analysis on the following segments autonomously increases the volume of profit without sacrificing the client-centricity approach. Depicted in Figure 1 the center of stage is positioned with Clients integrating the value proposition of the product created after performing market segmentation, identifying their organization’s type and identifying key metrics.

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Figure 1: Describes the exploratory and Predictive Business Analysis promoting client-centricity

Concentrate on your Market, segmenting the Personas

The foremost step in deriving customer’s insight is finding out the relevant market to build profitable product solutions. The segmentation ranges from understanding their engagement, paste purchases, creating personas, and estimating their Life Time Value.

Understand your Organization Type

Organizations are generally B2B or B2C at a broader level. Though, businesses B2B2C, B2B2B prospers by understanding their customers’ engagement. Examples include the popular e-commerce platforms comprising also the Direct2Customers category. 

Measuring your Business Model (BM) 

The fifth edition of the “State of the Connected Customer” report[3], Salesforce brings insights that the experience a company provides is as important as its products or services – 88% the highest it’s ever been, signifying the importance of business model measurement. Here are some metrics to measure the BM:

Gross margin is a key way to measure your business model.

Gross Margin = ((Gross Sales Revenue * Period) + Total Cost of Goods Sold - Revenue) / Gross Revenue

Customer Life Time Value (CLTV)

CLTV = (Average Annual Spend of a Customer * Duration of the Relationships in years)  - Total Customer Acquisition Cost

Identify the Retention and Churn Rate of customers:

Retention Rate = 100 * (Number-of-customers in a time period (t) - Number-of-new-customers in that time period (t) ) / Number-of-customers at the start of the period 

Churn Rate = (Number-of-customers left in the time period (t) / Total-number-of-customers at the beginning of the time period )  * 100

Calculate the point at which your organization starts building profit using Break Even Point (BEP) Analysis:

BEP = Fixed Cost / (Sales Price per unit - Variable Cost per unit)

Summarizing, generating a profitable product in a market always aligns with empathizing the customers, providing customized solutions using specialized technological advancements and building an environment of brand loyalty in return. 

References: 

[1] Gartner glossary of definition – Customer Centricity

[2] Customer Obsession – Leadership Principles

[3] Article from Forbes – You’re Probably Not A Customer-Centric Company Yet, But New Research Shows How To Change That

[4] “State of the Connected Customer” – Salesforce, Edition V

Kirthikka Devi Venkataram

Kirthikka is a Product professional, served B2B segments of multiple industry verticals like automotive, wireless telecommunication services, AI start up and deep tech signal processing research incubator. She holds a Master of Engineering specialized in Applied Electronics securing Anna University’s V rank and as top 5% in the overall batch. She has been recognized for her significant contribution in projecting before prospects about the Business Unit’s technology and service during her early career. She has coordinated and led professionals of diverse experience and culture in her Executive Development Program adding value to the group. She is a Lead to Women Who Code Data Science community.  A busy mother and passionate about travelling and cooking.


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Kirthikka Devi Venkataram
Kirthikka is a Product professional, served B2B segments of multiple industry verticals like automotive, wireless telecommunication services, AI start up and deep tech signal processing research incubator. She holds a Master of Engineering specialized in Applied Electronics securing Anna University’s V rank and as top 5% in the overall batch. She has been recognized for her significant contribution in projecting before prospects about the Business Unit’s technology and service during her early career. She has coordinated and led professionals of diverse experience and culture in her Executive Development Program adding value to the group. She is a Lead to Women Who Code Data Science community.  A busy mother and passionate about travelling and cooking.