Every business depends on winning customer loyalty by providing value. This is also true when your customers are from the base of the social and economic pyramid (BOP). Financial service providers who are serving or who want to serve this important customer segment need to invest in understanding these customers’ needs and develop products that meet those needs.
Customer-centricity is about providing solutions based on a deep understanding of customer needs, preferences, and behaviors. Customer-centricity is a concept that practically everyone agrees with, yet it takes a lot more than good intentions to implement. To effectively put the needs and aspirations of customers at the center of business strategies and decision-making, financial service providers may have to rethink their operations and invest significant effort and resources to change not only business operations but also organizational mindsets.
The journey to customer-centricity for financial service providers to the BOP segment begins with understanding how access to financial services can add value to the lives of lower-income customers. Well-tailored services can help customers meet daily needs, achieve personal and business goals, and build resistance against vulnerability. As new customers engage with formal financial services, they build the capability to interact responsibly with these services. But instilling these customers with trust and confidence in the provider and in formal financial systems is not automatic. Trust and confidence are outcomes of successful design and an embedded customer-centric approach.
Getting it right for BOP customers creates a competitive edge for financial service providers, whether through building customer loyalty or by tapping new market segments. Offering a range of tailored services helps providers reduce risk by diversifying across products and customer segments. Providers that take a long-term view stand to gain from a customer-centered approach.