Understanding Customer Orientation vs. Product Orientation

The business landscape has changed in the 21st century. The key to a company’s survival is understanding how to evolve in this new environment. Central to this is realizing what it means to be a customer-oriented company instead of a product-oriented one.

Product-Oriented vs. Customer-Oriented

In the simplest terms, product-oriented companies are capability-driven. They first focus on developing products, then selling them to as many customers as possible. This strategy was the predominant approach to business success in the 20th century but suffered from low customer loyalty, leaving companies vulnerable to disruptive competitors.

To evolve and grow, companies need to shift to a customer-centric approach, which we consider key to success in the still young 21st century. Customer-oriented companies switch up the traditional script by primarily focusing on the customers’ needs and then aligning their products and services to fit them. A 21st-century company is “obsessed with the customer” and aligns every aspect of the business to focus on them.

Why does customer orientation matter?

Customer orientation allows companies to speak directly to their customers’ needs. Addressing the needs of your customer at every level of the organization, not just sales and service, earns you their trust and loyalty. Developing a customer-oriented approach makes your business more resilient to changing markets. It also stops you from developing products and services that do not meet the market’s needs.

The largest companies in the world are the ones that have been successfully able to put their customers at the heart of what they do. A perfect example of this is Amazon.

How Amazon Became a trillion-dollar Company

Amazon has developed its entire business model around successfully understanding what its customers expect and addressing them directly. This is how Jeff Bezos successfully scaled Amazon from an online book retailer to a US$1.7 trillion company and one of the major success stories of the century thus far.

Amazon’s resilience was only possible because of its sharp focus on gaining customer loyalty and keeping it by becoming an invaluable lifeline that met their needs. The continued success of companies like Amazon is evidence of the strength of customer orientation and the many benefits it offers.

Evolving your organization to meet customer needs

Becoming Amazon is not the target, but there are many lessons to learn. If your company suffers from declining profits, it’s time to fully embrace 21st-century thinking. The only way forward is by putting your customers at the center of everything you do as an organization.

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