Placing value creation for the customer at the heart of key business and organizational processes—an approach known as customer centricity—is increasingly being seen as a source of sustainable competitive advantage. In recent years, over 30 percent of Fortune 500 firms, including Intel, Dell, IBM and American Express, have placed customer centricity at the center of their business practices as a way to achieve an edge over the competition, and more and more companies are following suit (Lee, Sridhar, & Palmatier, 2015).
In this article, we address the concept of customer centricity from a strategic perspective, combining the concepts of value creation, value capturing and competitive advantage. Broadly speaking, customer centricity is seen in the literature as the art of establishing and strengthening distinctive customer relationships and as the cornerstone of key value creation processes. Moreover, customer centricity is seen as a means to enhance financial performance (Rust, Lemon, & Zeithaml, 2004), which is in tune with the notion that part of the customer value created should be captured by the organization in order to secure continuity and/or enhance long-term profitability (Fader, 2012). The literature has also recognized that customer centricity enables organizations to create a competitive advantage that is difficult for competitors to displace (Shah, Rust, Parasuraman, Stalein, & Day, 2006). In short, customer centricity with strategic impact is about delivering superior performance in the marketplace through a process of dual value creation: the customer wins because (s)he is served well, and the organization wins because it creates and captures value in a distinctive way.