Three Types of Customer-Centric Strategies

What can you do to be more customer-centric?

First, let me share my definition of customer-centric: Solving specific customer problems cheaper, faster, or easier.

So how can you do that?

According to Clayton Christensen there are three distinct ways:

1. Sustaining Innovation
2. Low-End Disruptive Innovation
3. New Market Disruptive Innovation



1. Sustaining Innovation
Deliver better performance to highly demanding buyers in an existing market. Crowd Spring is my favorite example. In the new transparent world of social media, graphic designers and ad agencies are struggling with the commodization of their product. As one of my graphic designer friends said upon seeing Crowd Spring for the first time, "This makes me sick to my stomach." Crowd Spring is a crowd sharing web site for graphic designers. A buyer simply posts a project and creative brief on the site with a budget--a very low budget. For example a logo and identity for a new architectural firm for $500. Depending on what market you're in, that is either very low or "wouldn't buy me a cup of coffee" low. Here's the really bad part for designers: Fully developed concepts are submitted from graphic designers all over the world. Hundreds of them. When the buyer selects the concept he or she likes, then the $500 is released to that designer. Bottomline: For $500, this buyer gets to see hundreds of concepts and ideas and only pay for the one they choose. Crowd Spring is providing remarkably better performance (in the form of same quality for much cheaper prices) to highly demanding buyers in an existing market.



2. Low-End Disruptive Innovation
Give “over-served” buyers “good enough” performance at lower prices. My hero R. Sam Bowers described it this way: In the old world, sellers always sought to exceed the buyer's expectations--go above and beyond what is being asked for. Today, buyers have learned that the extra effort costs money. What buyers want is "good enough" at lower prices. A great example of this is healthcare where striving for the highest quality has been the mantra. This mission has also resulted in the runaway costs of healthcare. Minute Clinic discovered that there are many ailments for which patients just want "good enough". For $40 you can get diagnosed and get presciption meds and be on your way in less than an hour. These patients don't need a doctor, a nurse practioner will do. Minute Clinic is providing "over-served" patients with "good enough" care at much lower prices.



3. New Market Disruptive Innovation
Provide “excluded buyers” a simple, lower cost, easy solution. Traditionally, there have been services or products that have been priced beyond the reach of many potential buyers. One of these is business legal services. LegalZoom has changed all that. Now, small businesses can get the legal documents and services they need for prices that fit their budgets. LegalZoom has created a new market by finding a significantly cheaper way to deliver the service.


In today's new customer-centric world, marketers need ways to increase their competitive advantage and win more business. Employ one or more of these three customer-centric strategies and you will be amazed by the results.

A final note about profit and margin. The only example above that diminishes margin is Crowd Spring. But it diminishes it for a commodity. You can't put lipstick on a pig and you can't add margin to a commodity. The other two invent better processes that actually increase margin while dramatically lowering price.