6 minute read 16 Jun 2021
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Why customer-centricity is key to innovation for entrepreneurs

Lynn Rattigan
By Lynn Rattigan

UK&I Chief Operating Officer and EY Entrepreneur Of The Year™ UK Partner Sponsor, Ernst & Young LLP

A member of the UK&I Executive and UK LLP Board. Mother of twins. Advocate of flexible working. Fitness enthusiast.

6 minute read 16 Jun 2021
Related topics Strategy by EY-Parthenon Growth Entrepreneurship
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By keeping customer needs at the heart of their approach, entrepreneurs can achieve innovative growth.

In brief

  • COVID-19 has created a long-term shift in customer expectations, fuelling changes to business models.
  • By making their propositions more customer-centric and increasing the use of digital platforms, fast-growth businesses and entrepreneurs can lead the way. 

Customer centricity is vital to creating positive brand experiences and is a key differentiator in an increasingly competitive and digital marketplace.

With an overnight move to lockdown-induced, digital-first approach to both work and living in 2020, companies had no choice but to fast forward digital acceleration from years to a space of several months. The upside for business owners and entrepreneurs is that the pandemic acted as a catalyst for the formation and growth of new business models. Those that found the most success during this disruptive period had to put customer centricity at the very heart of their business operations. And there’s some key learnings that entrepreneurs can apply from this time which will help them succeed in the future. 

Business models must be relevant to customer needs and eliminate friction

Businesses across the UK had to reconsider and re-engineer their business models. Gyms moved to provide online courses, reimagining how they delivered services and engaged with their customers. Demand rose for digital banking services, meaning banks had to invest more resources and capabilities to support online activity. Shopping experiences moved online. We saw a boom in online collaboration tools to help remote workers be more efficient, and of course, the global health sector had to find solutions to combat and limit the spread of the virus, resulting in a mass collaboration and adoption of new technology at speed for the greater good.

Successful, truly customer-centric innovation and digitalisation rely on a customer’s readiness to embrace digital, and a business’s ability to make bold decisions to eliminate or reduce friction points during the customer journey. The pandemic created an environment for these changes, and companies must continue to question their approaches and consider new adaptations to get ahead now, and long into the future.

Fast-growth businesses lead the way

Because of the agile nature of fast-growth businesses, they are already leading the way by constantly evolving to meet customer needs and using technology to do so. For example, Octopus Group, a UK-based business focussed on the financial services and energy sector, founded by Simon Rogerson and Chris Hulatt, has sought to put customers at the centre of their business.

During 2020, Octopus Energy worked with the UK government to create a uniform approach to helping those struggling to pay their energy bills as a result of the pandemic. Simon Rogerson wrote a personal blog about their work during the pandemic and how they were striving to keep the balance between helping consumers in need and ensuring the business kept running for their employees.

This customer-centric, transparent and people-first approach meant that not only did the company help its end users during a difficult time, but also provided Octopus Energy with a driver for innovative growth. As reported in The Guardian in December 2020, Octopus Energy has become the UK’s latest “tech unicorn” employing 1,000 new tech recruits whose job will be to further develop smart grid technologies that can help the UK’s transport and heating systems harness cheap renewable energy for consumers1.

Another entrepreneur leading the way is Mark Livingstone, CEO of Pharmacy2U, the UK’s biggest online pharmacy. By working with general practitioners electronically, centrally dispensing and delivering prescriptions direct to a customer’s home, the company saves money and time for both patients and the NHS.

Mark and his team have created a centralised, automated and digitised pharmacy, putting the customer back in control of their own health experience and by using AI, are continuously innovating and improving the customer experience.

Thinking outside the box

Evolving to meet consumer need means shedding old business models which puts profits first. This shift in values and focus on the customer will give birth to a new wave of innovation that looks to address new market needs, as well as current unmet needs.

Companies are already turning to big data and technology to get a more accurate view about their customers – recent Tech Horizon research from EY found that almost half (47%) of customer-centric companies have tech teams focussed on building the customer experience.

Hyper personalisation will continue to be a focus, as consumers demand to be seen as individuals and not mass marketed at. For fast-growth businesses, success means having a very sound understanding of customer needs, from the history of their interactions with your brand, their individual challenges, and how they finally purchase from you. This will also mean significant investment in technology and employees with the right digital skills to apply these insights at the right stage of the customer experience.

A key example of how this can be achieved is with programmatic advertising. Entrepreneurial duo Dominic Joseph and Adam Ludwin, co-founders of Entrepreneur Of The Year alumni Captify, seek to solve this exact problem with their innovative use of AI. Captify’s Search Intelligence technology connects real-time search data of 2.2 billion consumers globally to power digital, programmatic advertising and insights for some of the world’s biggest brands, whilst also considering consumers’ needs around data privacy and protection. The firm has recently undertaken partnerships1 and launched new products to market2 to allow programmatic buyers get the most accurate search insights available, and ensure that their adverts reach the most relevant audiences possible.

Making the experience personal across the whole customer journey

With the growing number of communication channels and touch points, customers are also increasingly expecting personalisation throughout their customer journey. We will likely continue to see the developments in artificial intelligence and machine learning to improve the quality of customer support through automation. As part of customer service, fast-growth businesses will need to rethink how they navigate customer touch points. They will need to move away from a customer having to venture to a company’s website and find an email address to seek support, to having multiple ways at which customers can receive information. Increasingly companies are including social media and instant messaging as part of this digitised approach.

In terms of wider business models, entrepreneurs will need to continually work alongside their customers to understand and then create the services and products they actually want. This will mean more than just customer review panels before launching new propositions  —  instead involving customers much earlier during the product development or service ideation phase.

Research for SHL found that an additional 59,358 new companies were created in the UK between June and August 2020, compared to the same period in 20193, meaning the marketplace is becoming more crowded. It’s even more important that the next wave of businesses put their customers at the centre of their business model if they are to have real competitive advantage.

The next few years will be an exciting time for innovation. Reaping the rewards of a customer-centric model will mean more customers onboarded, more sales closed and – longer term – potentially a higher valuation for a business. All of which could translate into more funding opportunities as entrepreneurs look to scale up and achieve future growth.

Summary

The COVID-19 pandemic has highlighted the importance of the customer experience in our hyperconnected world today. The entrepreneurs and business owners who are most able to offer unique approaches and engage more fully with their customers will be the ones that drive future growth and innovation in the UK business community.

About this article

Lynn Rattigan
By Lynn Rattigan

UK&I Chief Operating Officer and EY Entrepreneur Of The Year™ UK Partner Sponsor, Ernst & Young LLP

A member of the UK&I Executive and UK LLP Board. Mother of twins. Advocate of flexible working. Fitness enthusiast.

Related topics Strategy by EY-Parthenon Growth Entrepreneurship
Upvote