Product-Centric vs Customer-Centric: Which Approach is Best for My Business?

Product centric vs Customer centric: What business are you in?

It’s quite unfortunate that many business owners and marketers don’t know what it means to be product-centric or customer-centric. This is clearly one of the reasons many businesses suffer a setback.

Here is it, Product-centric is focused on developing the best products while Customer centric believes in satisfying the customers’ needs.  Although these two designs are full of opposing ideas, they are effective in their own ways.

Knowing the difference between a product centric and customer centric business approach is great. However, if you want to stand apart from your competitors, you must seek a clearer understanding of how these two models apply to various businesses. You’d never know which approach would be more sustainable for your business.

In this article, you’ll discover the major differences between the product centric and customer centric as well as their individual business models. The aim is to enable you to make a better decision about your business model and design.

Product Centric Model

“Customers don’t know what they want until you show it to them” ~ Steve Jobs. This is a typical product-centric representation.

A product-centric organization is one that is focused on the products it brings to the market as a way to measure success and determine strategy rather than the customers that buy those products.

They look to develop new products by leveraging technology or specialized skills that exist within the company,

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Customer Centric Model

“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better” ~ Jeff Bezos

Customer-centric company model starts with the customer. They work to meet the needs of customers. In fact, customers are at the core of every business decision they make.

Have you too noticed that marketers are gradually adopting a customer-centric approach and taking into account what is important to their customers?

Let’s see the reason for that.

Product Centric Versus Customer Centric – What is the Difference?

The table below shows a clear distinction between product-centric and customer-centric business model.

Product-CentricCustomer-Centric
Create the best productsCreate the best solution for the customer
Develop new productDevelop a solution to problems
Reward people that develop new productsReward people with great insights into customers
Aligned with the industrial eraAligned with the experience economy
Pushes products unto the customersHave informed buyers

Product-centric companies and customer-centric customers have the same goal of maximizing their shareholders’ value, but the difference lies in how they intend to achieve their goal.

Product-centric approach gives management a clear structure and makes it easy for the team to identify their focus.

Solo, the plastic cup company, is typical product-centric because their products don’t require a lot of effort to purchase.

Solo customers are more concerned with the value of their purchase rather than building a business relationship with the brand.

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Generally, product-centric companies achieve their goal through high volumes and cost reduction. These companies have a lot of expertise in a certain technology or area making them strive to increase their production and possibly dominate the market.

However, this might lead to them being less receptive to customer feedback, which is obviously problematic.

On the other hand, customer-centric companies rely on customer development, retention, acquisition as their major strategy. They structure their processes around the future, segmentation, and personalization.

Take a look at companies like Apple, Amazon, Zappos, and Southwest Airlines, and how their customer focus helped them break into incredibly competitive, established industries. They keep creating a lot of brand new categories.

Product Centric vs Customer Centric-Which One is More Sustainable?

Product centric approaches to business have their roots in the industrial era and are fast losing relevance in a new age where the customer is in charge.

Likewise, customers are willing to provide positive reviews to businesses that provide them with a fair exchange of value.

It is the customer-centric approach to business that delivers greater long-term value to the business.

Mainly because these approaches recognize the value of customer loyalty and advocacy. And they recognize that the value of a business is reflected within the composition of its customer portfolio.

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Conclusion

Product-centricity and customer-centricity are approaches to business models. Both approaches are vital for any business growth. In fact, these two approaches ideally go hand-in-hand, but it is important to understand the difference to know how to properly run your business.

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