Table of contents
2. The essence of customer centrality
3. Barclays Plc and customer centrality
4. Analysis of customer centrality
The development of the modern marketing is characterized by the appearance of new trends and traditional approaches, which were considered to be effective in the past, prove to be ineffective in the present epoch. In this respect, it should be said that customers were traditionally in the focus of attention of all companies operating in any market because it is the customers companies strived for because customers defined the extent to which the company was successful. Basically, the situation has not practically changed at the present moment. However the attitude to customers has changed dramatically because nowadays one of the major goals of many companies is not just sale their products or services to customers but rather attract the customer to its services and products and retain him/her. In fact, the customer became the central figure in the marketing strategies of companies and it is the customer who plays probably the key role in the functioning of companies. In such a situation, companies perfectly realize the important of customers’ positive experience and loyalty and this is why they attempt to attract customers using all available means and this trend is known as customer centrality. This is why it is necessary to discuss the problem of customer centrality, its essence and practical application, analyze and critically evaluate it in order to better understand the perspectives of this approach.
The essence of customer centrality
Basically, customer centrality implies that the customer is the primary concern of a company and needs, demands and interests of the customer should be met and satisfied. At the same time, it is not an altruistic desire of a company to satisfy the customer’s needs and interests. This strategy primarily targets at the formation of the loyalty of the customer to the company. It should be pointed out that in recent years this trend has become very strong and, at the present moment, it can be viewed as the dominant trend in the modern marketing. At the same time, this trend is quite different from the traditional attitude to customers.
To put it more precisely, as a rule, customers were viewed just as potential consumers which should buy a product or service of a company and simply disappear. At any rate, in the past, the fact of the sale of a product or service to customers was the ultimate goal of company-customer relationship. At first glance, it was quite a logical and natural scheme because the company, in such a situation, gained its major goal since it sold a product or services produced, while customers needs and demands were also satisfied. In principle, the sale itself is still the major goal but what is more important nowadays is the necessity of customers’ retention. In actuality, modern companies cannot achieve significant successes in the current market situation, if they do not have loyal customers that are devoted to a particular brand and that can be viewed as the major consumers of products and services of a company. The company cannot ignore the fact that customers need to develop a positive experience of buying products or service of this particular company, because, otherwise the company will lost its market position and will gradually degrade. To a significant extent, such a situation is determined by the growing competition in the market that increases the competition and rivalry between companies for clients. The higher is the level of customers loyalty to the company the more successful the company can be because customers will return over and over again and buy products or services of the company.
Consequently, the development of customer centrality is quite logical in such a market situation and practically inevitable. Specialists point out that it is quite surprising that “businessmen have concentrated far more on how to attract customers to product and services than on how to retain customers”ť (Hamel & Prahalad 1994, 154). In fact, the problem of retention of customers became one of the major goals of modern effective marketing strategies. The customer centrality provides an opportunity to focus on the needs of the customer and through the customer’s satisfaction retain him/her. In such a way, the company can develop customers’ loyalty.
Barclays Plc and customer centrality
The need develop and implement the concept of customer centrality in the modern business became obvious for many companies operating in different fields. Even the large companies have to implement customer centrality as an effective tool to improve its market performance and increase its profitability. In this respect, it is possible to name Barclays Plc. In fact, Barclays Plc is the largest financial services provider in the world. This company operates worldwide and is represented in many countries. It operates through its subsidiary Barclays Bank Plc. Potentially, this company should not have serious problems with customers because it was and still remains one of the largest companies in the world. However, it could hardly preserve its leading positions in the world financial services market without the effective implementation of customer centrality strategy.
In this respect, it is necessary to point out that this implementation of this strategy was basically determined by the considerable changes in the financial markets in global terms. Under the impact of the process of globalization, the world financial markets started to integrate rapidly. The financial barriers between countries gradually disappeared and companies got new opportunities for the international cooperation and development of business in different parts of the world. In such a situation, the movement of capital was also relatively free. At any rate, there were no serious obstacles at such a scale as they used to be in the past epochs, when it was quite difficult to overcome national borders and enter a new market. As the matter, financial markets are currently viewed as extremely liberal and open for international cooperation (Peters 2007, p.221).
Naturally, as the boundaries and fiscal barriers became weaker and less significant many financial service providers attempted to gain a better position in the market. As a result, companies got larger opportunities to develop their business abroad and they got a chance to increase their profits consistently entering new perspective markets. At the same time, such a situation contributed consistently to the growth of the competition between financial services providers. Many banks started to offer their services on better conditions to their customers that their competitors. However, such a policy threatened to the stability of banks and even their reliability.
Barclays Plc also perfectly understood the possible threat of the growing competition and the gradually decreasing profits because of the deteriorating conditions of functioning of the company in the international market. In such a situation, the question concerning the necessity of the implementation of new, more effective strategies in relation to customers has aroused. On attempting to find the most effective way of the gaining a better competitive position in the market Barclays Plc started to implement widely the strategy of customer centrality. In actuality, the realization of this strategy implied the concentration on the needs and interests of customers and the major task of the company was to satisfy these needs and interests. In fact, the implementation of such a strategy was accompanied by certain difficulties because the company had to develop strategies for the research of the interests, preferences, demands and expectations of its customers.
Nevertheless, the company started to implement changes in relation to its customers making them more customer-oriented. The company attempted to make its services not only available to customers but it also to make the company closer to customer. To put it more precisely, the company introduced the practice of the direct communication of company’s managers with its customers in questions which were really important to customers.
Moreover, the company attempted to stimulate its loyal customer making them better offers compared to other customers. For instance, the company could credit its customer and the loyal customer could spend less cost to pay off the credit than other customers. In other words, credits could be less expensive to loyal customers than others.
But it does not mean that the company totally ignored the interest of other customer. In stark contrast, it was just one the means to stimulate the retention of customers. In fact the company viewed each customer as the partner that should remain with the company. This was the strategic policy of the company to stimulate the retention and increase loyalty of customers.
In this respect, it should be said that gradually such a policy gave positive results because it contribute to the growth of loyal customers and, what was probably even more important, it increased the popularity of the brand and made the company quite popular in different countries of the world. In fact, nowadays Barclays Plc is an international brand that is recognizable in different parts of the world
Analysis of customer centrality
Obviously, customer centrality has a number of advantages compared to traditional strategies, which were applied by companies in the past. First of all, it should be said that the company can benefit considerably from such a strategy because it increases customers’ loyalty. The latter is very important in the modern world. It is necessary to understand the fact that in a highly competitive environment the customer’s loyalty is one of the major tools that can give a company a serious competitive advantage compared to its rivals. It is obvious that a company can rely on its loyal customers and, therefore, it can have a stable sales rate. In addition, loyal customers can stimulate the increase of sales rate since they can share their positive experience of using service or buying products of a particular company. New customers that buy products or services of the company could also become loyal customer and attract new customers in their turn. Thus, the cycle may be repeated and the number of customers of a company can steadily grow.
At the same time, it is also obvious that the company could hardly maintain the interest and loyalty of customer, if it fails to implement effectively customer centrality strategy. What is meant here is the fact that if a customer is not in the center of attention of the company this may lead to the dissatisfaction of a customer with services or products of the company. Consequently, this customer will not return to the company again. In contrast, if products and services of the company meet the expectations of the customer than he/she will be more likely to become a loyal customer and return to this company and, as it has been already said above, he/she can even bring new customers to the company.
Another positive effect of the customer centrality is its contribution to the growing popularity of the brand of a company. Nowadays, the popularity of the brand is extremely important. It is not a secret that brand constitutes a part of the market value of the company and, in this regard, the example of Barclays Plc is quite noteworthy because it is one of the most recognizable brands of the financial services provider (Volti 2005, p.247). In such a situation, it is hardly possible to underestimate the significance of customer centrality for the popularity of the brand of a company that leads to the improvement of the position of the company in the market.
On the other hand, it should be pointed out that the development of customer centrality leads to the change of relationships between customers and company that may naturally lead certain problems within the company. To put it more precisely, the development of the concept of customer centrality and the realization of this strategy in the functioning of the company makes the company highly dependent on its customers and decreases the attention of its administration to needs and interests of employees that may to the internal conflict within the organization. For instance, a company can totally concentrate on the customer satisfaction and customer centrality, but its employees apparently need some time to change their style of work and attitude to customer, to develop new habits, etc. In the process of this change an employee or employee cannot always fully meet the expectations of the administration that may lead to the growing dissatisfaction from the part of administration and the decrease of self-esteem from the part of employees who could feel being unable to change their style of work.
Moreover, the situation may be consistently more difficult when the personnel of the company does not accept the change and sabotage the implementation of customer centrality strategy. Naturally, the opposition of the personnel may be not very obvious but still it will prevent from the effective implementation of this strategy. Anyway, it is obvious that the change of the traditional approach to customer, which, for instance, targets at the attraction of customer solely, to customer centrality may be very difficult and cause internal conflicts within the company that will deteriorate its performance consistently. Also, it is necessary to remember about the fact that a company, especially such a large one as Barclays Plc, is a very complicated organization, which needs its specific goals, problems, its own needs and even culture. In such a situation, customer centrality may lead to the ignorance of some of the problems of the company in the result of the total concentration on customers. It proves beyond a doubt that a company cannot be absolutely focused on customers’ needs and interests. In fact, it is possible to influence customers’ interests and needs that can make the use of customer centrality practically ineffective. For instance, if a company can influence the customers’ needs and interests and, thus, manipulate their behavior, which is defined by needs and interests, than the company can provide customers with products and services which it produces, while its competitor that is totally focused on the customer centrality, will attempt to adapt its production or its services not to the actual needs and interests of customers, but rather to the needs and interests shaped by another company that puts the latter into the advantageous position compared to its rivals.
Thus, taking into account all above mentioned, it is possible to conclude that customer centrality is a very popular trend in the modern marketing. In fact, many companies widely implement this strategy in their practice in an attempt to increase the number of loyal customers and improve its market position. In addition, customer centrality may increase the popularity of the brand of a company and assist to the maintenance of the high sales rate that is also very important in the modern market situation when the competition is very serious in practically all industries.
Moreover, in the context of economic globalization, customer centrality may play a very significant role since it contributes to the formation of a positive customer experience and popularity of the brand. As a result, the company acquires a positive public image and becomes recognizable among customers that makes its products and service reliable not because of their superior quality but rather because of the positive customer experience.
However, the possibility of the development of serious problems within the company in the result of the implementation of customer centrality strategy is also very high because it can provoke the opposition of the personnel and ineffective functioning of the company in the result of its total concentration on needs, interests and demands of customers.Â This is why it is possible to estimate that the implementation of this strategy should very careful and supported by the personnel of the company.
Obviously, customer centrality is a very popular, modern trend but the question concerning its future arises after the analysis of customer centrality and its practical implementation. In fact, customers were traditionally important to companies and without them companies cannot survive but, in actuality, it does not necessarily mean that all the efforts of the company should be focused on the satisfaction of needs of customer. In this respect, it is necessary to remember about the fact that customers’ needs and interests can also be influenced. For instance, media, some modern trends in fashion, the dominating ideology, some natural disaster or catastrophe, and many other factors can affect the customers’ behavior and preferences. In such a situation, it is practically impossible to immediately react on such changes and, what is more, there still remains the opportunity for the formation of customers interests and demands, especially due to the development of new technologies, which facilitate our life and evoke new needs and demands.