The success of a business can often come down to the priorities it sets. While some businesses prioritize more on their products above all else, others prioritize their customers’ needs and experiences. This leads to the question of which approach is more likely to lead to success – product-oriented or customer-oriented businesses. Despite the common belief that customer centric businesses are always successful, our analysis will show that it’s not always the case and many factors contribute to a business’s success.
In this article, we will delve into the pros and cons of each approach and evaluate which one is more likely to come out on top in the battle of priorities.
Using a real-life case study, we’ll show the difference between these two models and provide hard data to support our argument.
By the end of this blog, you’ll clearly understand what a customer-oriented business is and why it’s the way to go in the current business environment.
How customer-oriented businesses win every time
Imagine going to a restaurant with world-class chefs and fine-quality food, but as soon as you take your seat and pick up the menu card to order, you notice no one is there to take your order.
You will wait for a few moments and then minutes and finally, after 15-20 minutes a lousy waiter will appear to take your order.
You asked him about the items on the menu and he answers everything is already on the menu, and you can order by yourself. And after about 60 minutes you get that tasty dinner.
Quite an “OFF” experience.
So, now you are done with fine dining and you end up having your Sunday brunch again at your favourite food truck where you have been going for years.
And you get the same taste and quality every time faster than the fine dining restaurant.
As you have your delicious meal at the food truck, you reflect on your experience at the fine dining restaurant and realize the true essence of a great dining experience is not just about the food but also about the service.
The attentive and friendly service at the food truck has made you feel welcomed and appreciated as a customer, whereas the lack of service at the fine dining restaurant left you feeling frustrated and unsatisfied.
You also realize that the food truck, with its simple menu and straightforward ordering system, is able to serve its customers efficiently and quickly.
While the fine dining restaurant with its complex menu and long waiting times ended up taking away from the overall dining experience.
This contrast between the two dining experiences highlights the importance of putting customers first in the business world.
The fine dining restaurant in this scenario is a classic example of a product-oriented business, where the focus is solely on the quality of the food, neglecting the customer experience.
On the other hand, the food truck is a prime example of a customer centric business, where not only is the quality of the food consistent, but the customer experience is also prioritized, resulting in a loyal customer base.
Customers do not just want high-quality products, but also a positive experience that meets their expectations and leaves a lasting impression.
This is where customer-oriented businesses shine, by putting the needs and satisfaction of their customers first, they are able to create loyal customers and positive word-of-mouth.
Take, for example, In 2020, Amazon’s net sales reached $386 billion, while their net income hit $21.3 billion.
How did they achieve this level of success? By putting the customer first and foremost, with a focus on providing a seamless customer experience.
Real-Life Case Study – Apple Inc.
Apple Inc.’s customer centric approach has been the cornerstone of its success in the global tech market.
With a brand value of $352 billion and revenue growth from $8 billion in 2004 to $260 billion in 2019, Apple has proven that its customer experience strategy is exceptional in building long-lasting relationships with its customers.
Apple’s approach is simple yet super-convincing, focusing on creating strong customer engagement through effective marketing and storytelling.
Apple’s marketing team crafts powerful stories that tell customers that they are worthy and that having an Apple product will make them even better.
In addition to its marketing approach, Apple’s focus on innovation in every product has driven its success.
The company’s commitment to delivering top-quality products and generating irresistible customer satisfaction is evident in its innovative software, hardware, and product planning.
Apple’s unique and informative store design and experience are another aspect that draws customers to the brand.
The customer experience during the whole customer life cycle is of utmost importance to Apple, and its store experience provides an experience worth cherishing every time a customer visits an Apple store.
In conclusion, appealing to customers and creating value for them is essential, and Apple does it right by delivering a customer-centric approach that is unmatched in the tech industry.
Example of customer-oriented business
An example of a customer centric business is Amazon.
Amazon prioritizes customer satisfaction above all else, from its vast product selection and fast shipping to its easy-to-use website and reliable customer service.
The company constantly gathers customer feedback and uses it to improve its services and offerings.
Amazon Prime, which offers free shipping, access to streaming services, and other perks, is another example of the company putting its customers first.
These efforts have helped Amazon become one of the most successful companies in the world and a shining example of the benefits of a customer-oriented approach.
Why one should go for only customer-oriented business?
Picture this: you’re walking down the street, window shopping and suddenly, you see a store that catches your eye. The store’s sign says “Customer-Oriented Business”.
You step inside and you’re immediately struck by how different it is from all the other stores you’ve ever been in.
You feel like the store is designed specifically for you, with products carefully selected based on your interests and needs.
The sales associates are friendly and knowledgeable, and they seem genuinely interested in helping you find exactly what you’re looking for.
When you make a purchase, you receive fast and reliable shipping, and if you have any questions or concerns, the store’s customer service is top-notch.
That’s the essence of a customer centric business. It’s all about putting the customer first and creating an experience that exceeds their expectations at every turn.
Whether it’s through market research, customer feedback, or simply listening to what customers are saying, a customer-oriented business stays attuned to its customers’ needs and tailors its operations accordingly.
So if you’re looking for a business that truly values you as a customer, look for the “Customer-Oriented Business” sign. Your shopping experience will never be the same.
Comparison of customer-oriented with product-oriented business
Product-oriented and customer-oriented businesses are two distinct approaches to conducting business operations.
While both have their own advantages and disadvantages, the key difference between the two lies in their focus and priorities.
Look at the table below for some differences in important aspects:
|The focus is on the product itself, its features, and its benefits.
|The focus is more on Customer Needs and Wants
|The marketing strategy is product-centred, emphasizing the product’s unique selling points.
|The marketing strategy is customer-centred, emphasizing the customer’s experience.
|The sales strategy is focused on “pushing” the product to potential customers.
|The sales strategy is focused on “pulling” the customer by building relationships
|The business model is typically transactional, where the focus is on a single sale.
|The business model is relational, building long-term relationships with customers.
|Customer service is reactive, responding only when customers have a problem.
|Customer service is proactive, anticipating and addressing customers’ needs.
|Growth is driven by expanding the product line.
|Growth is driven by customer loyalty and referrals.
In conclusion, both product-oriented and customer-oriented businesses have their strengths and weaknesses.
Ultimately, the success of a business depends on its ability to meet the needs of its customers while also providing products and services of high value.
Some data & numbers to support the argument
It’s no secret that customer-oriented businesses have the upper hand when it comes to success. But don’t just take our word for it – let’s look at the numbers.
According to a recent survey conducted by McKinsey & Company, businesses that prioritize customer experience over product-centricity saw a 33% higher total return to shareholders over a five-year period. That’s a big deal! (R, N,)
But that’s not all. Research from Forrester shows that customer-oriented businesses also benefit from higher customer loyalty.
In fact, customers who had experiences that exceeded their expectations were willing to pay up to 16% more for the same product or service.
Finally, a survey from Temkin Group found that companies that focus on the customer experience have more revenue opportunities.
The survey showed that companies that focus on customer experience have a 20% higher revenue growth rate than those that prioritize product-centricity.
These numbers paint a clear picture – customer-oriented businesses are more successful than product-oriented businesses in the long run.
By focusing on the customer experience, companies can gain more loyal customers, higher revenue growth, and greater total return to shareholders. It’s a win-win for everyone!
When it comes to success in business, customer-oriented approaches often have the upper hand over product-oriented ones.
This is because the customer-oriented approach puts the customer first, always striving to provide the best experience and value.
This approach is especially important in a world where competition is fierce and customer loyalty is hard to come by.
By focusing on the customer’s needs, wants, and desires, businesses can create a lasting relationship with their target audience and ensure that their products and services remain top-of-mind.
Product-oriented businesses, on the other hand, focus more on the product than the customer. This can lead to a disconnect between the customer and the company.
The customer may not feel valued, and this can lead to a lack of loyalty.
Ultimately, the customer-centric approach is the more successful approach in today’s business world.
By focusing on the customer’s needs and providing products and services that meet those needs, businesses can create a strong relationship with their target audience and ensure long-term success.