If recession taught Fortune 1000 companies the need to migrate from a product-centric to

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a customer-centric approach for better profitability, Indian firms are still complacent on implementing the new concept. Customer-centric approach, which includes understanding the customer, his behaviour and needs before redesigning, pricing and marketing the product, is now being accepted as twice or thrice as profitable than the traditional product-centric approach, said V Kumar, director of the PhD programme in marketing, Georgia State University and chairman and chief executive officer of global business solutions provider IMC International.

“All the Fortune 1000 companies acknowledge the benefits of a customer-centric approach; 75 per cent of them have secured integrated customer data and almost 10 per cent have moved into implementing ‘Customer Lifecycle Management,” he told Financial Chronicle.

IMC International has worked with global giants such as Procter and Gamble (P&G), IBM, Prudential and HSBC. By implementing the concept in the detergent division for Asia Pacific region, P&G had increased revenue of $40 million in 2007, he said.

“We found that P&G had made a fairly large pool of loyal customers for its detergent brand with its pricing strategy and that they will not waver even if the rates were hiked. This strategy worked for the company to earn additional revenues,” he added. “However, in India, only 60 per cent of the companies with larger customer base realise the need for the new approach.

Only 6 per cent of them have integrated data of their customers and only 0.1 per cent are redefining their approach as per the research,” he said. The retail adage says that 80 per cent of sales come from 20 per cent of customers, said Vijay Bobba, chief executive officer of Loyalty Solutions and Research.

“Therefore, it is crucial for a retailer to identify this 20 per cent, especially during recessionary times,” he said.