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A “Two-by-Four Moment”

Have you ever had a two-by-four moment? By that, I mean an “a-ha” experience. It’s like someone hit you with a two-by-four and all of a sudden you have clarity about the situation. You see things in a brand new way.

two-by-fourRecently an executive of a leading U.S.-based distribution organization had a “two-by-four” moment when he reviewed their Customer Loyalty results. His company is pursuing a growth strategy, with the goal of increasing profitability and sales. In an effort to better understand the market position, the VOC initiative included a measure to gauge share of wallet. On first glance their results are extremely positive. They have the vast majority of their customers’ business.

But, wait a second. There is a small portion of business that is going to the competition. That share of business going to the competition is increasing. Furthermore, when you translate the amount of business that is going to other organizations into lost sales – here it comes – they are missing out on hundreds of millions of dollars in potential revenue.

The two-by-four moment: They left money on the table by not pursuing all potential business with new customers.

·         When acquiring new customers they targeted the core business, obtaining about 90% share on average.

·         Over time, their share of wallet eroded as the customer grew relationships with other providers (e.g. down to 80% SOW within five years).

Are you maximizing relationships with your customers?

Kitty Radcliff
Vice President

About the Author

Kitty Radcliff

Kitty Radcliff

As a vice president of consulting service, Radcliff serves as the senior client service contact for assigned customer feedback engagements, with an emphasis on industry knowledge, research expertise and creation of valuable insights. Her current portfolio of client relationships includes both international and domestic companies in the high-tech, manufacturing, and financial sectors. Kitty’s largest accounts involve global customer satisfaction/loyalty measurement programs with survey activity occurring via the web in several dozen countries around the globe.

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