Customer Centricity

Topics: Marketing, Customer relationship management, Customer service Pages: 34 (9302 words) Published: September 26, 2008
Journal of Service Research
DOI: 10.1177/1094670506294666
Journal of Service Research 2006; 9; 113
Denish Shah, Roland T. Rust, A. Parasuraman, Richard Staelin and George S. Day The Path to Customer Centricity
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Downloaded from at University of Groningen on September 20, 2008 The concept of customer centricity and its benefits have
been discussed for more than 50 years. Despite this fact,
many firms are still struggling to fully align themselves to the customer-centric paradigm. This article identifies fundamental issues and challenges that typically deter a firm
from becoming customer-centric. These are mainly
related to the organizational culture, structure, processes, and financial metrics of the firm. To overcome these barriers, the article suggests a path to customer centricity
that is driven by a strong leadership commitment, organizational realignment, systems and process support, and
revised financial metrics. The article concludes with
directions for further research.
Keywords: customer centricity; product-centric to
customer-centric; market-driven; marketoriented;
organization change
The concept of customer centricity is not new. More
than 50 years ago Drucker (1954) wrote in his book, The
Practice of Management, that “it is the customer who
determines what a business is, what it produces, and
whether it will prosper.” Levitt (1960) proposed that
firms should not focus on selling products but rather on
fulfilling customer needs. Still, the importance of customer centricity has only recently been embraced by the
business community. According to a 2003 Gartner Group
Report, “By 2007, fewer than 20 percent of marketing
organizations among Global 1000 enterprises will have
evolved enough to successfully leverage customercentric,
value-added processes and capabilities.” The same
report said that “by 2007, marketers that devote at least
50 percent of their time to advanced, customer-centric
marketing processes and capabilities will achieve marketing
ROI that is at least 30 percent greater than that
of their peers, who lack such emphasis” (Marcus and
Please send all correspondence to Roland T. Rust, Robert H. Smith School of Business, University of Maryland, College Park, MD 20742; phone: 301-405-4300; fax: 301-314-2831; e-mail: Journal of Service Research, Volume 9, No. 2, November 2006 113-124 DOI: 10.1177/1094670506294666

© 2006 Sage Publications
The Path to Customer Centricity
Denish Shah
University of Connecticut
Roland T. Rust
University of Maryland
A. Parasuraman
University of Miami
Richard Staelin
Duke University
George S. Day
University of Pennsylvania
Downloaded from at University of Groningen on September 20, 2008 Collins 2003, p. 1). Thus, it would seem important to
understand how a firm can successfully transform itself
and thus reap the potential payoffs.
There are five trends reinforcing the need for firms
to make this transformation—(a) intensifying pressures
to improve marketing productivity, (b) increasing market
diversity, (c) intensifying competition, (d) demanding and
well-informed customers and consumers, and (e) accelerating
advances in technology (Sheth, Sisodia, and Sharma...
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