This is the sixth and final part of a multi-part series on the trends we are observing among the 1to1 Customer Champions with respect to their efforts to build a customer-focused culture.
Over the course of this blog series, I have examined the themes that we can observe by examining the 2010 1to1 Customer Champions. In the course of the series, we discussed the importance of:
Why is being customer-focused so important? At the risk of repeating themes that you will see across all the Walker blogs, we know from our own research and research from academia that:
- Customer-focused companies tend to have a greater share of loyal customers; these customers tend to spend more, purchase more widely across your product/service portfolio, and are more resistant to competitive alternatives;
- Customer-focused companies use the feedback to determine a plan of attack that yields optimal results – that is, it minimizes the cost of implementation while maximizing the financial impact it will have on the organization;
The result includes three outcomes that create a virtuous cycle that benefits both customers and the company in total:
1) These firms tend to enjoy greater financial success than their less-customer-focused peers.
2) As a result of the greater financial success, these firms’ executives are more likely to be “true believers,” which means they will not only continue to invest in customer-centric strategies, but also “walk the talk.”
3) Customers benefit from the level of focus placed on them by the company, and they reward this with greater spend levels and/or lower likelihood of defection.
How can companies ensure that they are perceived to be Customer-Focused companies? Here are some suggestions based on our work with clients:
a) Develop a rigorous feedback gathering method – Use proven sampling techniques to ensure that feedback is being gathered in a fashion representative of your customer population.
b) Have a plan for follow-up – Commit to doing something with the information; if you cannot commit, then do not waste your customers’ time.
c) Look for immediate service recovery opportunities – Scour the real-time results for clues to where services or products are not living up to customer expectations and create a closed-loop process (including set time-bound service level agreements) for your front-line associates to follow-up.
d) Use driver analysis to prioritize effectively – Using a structured feedback approach offers the opportunity to create models that provide insight on where to focus – skipping this step (or focusing solely on raw performance scores) may result in suboptimal improvement efforts.
e) Integrate internal metrics into your analytic plan – Linking behavioral metrics (such as financial data or other performance metrics) will not only bring clarity to what you need to do (particularly important for associates who are not customer-facing), but also how to track your success.
f) Utilize customer feedback in account planning – As sales teams are preparing forecasts, be sure to integrate customer feedback as another data source to consider when looking at which products and services to promote with a specific customer. Walker’s Value Mapping process can be an effective means of providing broad strategies for segmenting accounts that can have great utility in the account-planning process.
g) Communicate what you are doing – The trap that some companies fall into is that they are Customer-Focused Companies that are perceived by their customers as being Lip-Service Companies. The solution? It sounds too simple, but it is true – do not forget to communicate what you learned in the process (and what you are doing about it). This can take a variety of approaches, ranging from a broad-based communication to all customers from the CEO to more tailored messaging to a specific customer account.
It is not easy to become a customer-focused company – if it were, everyone would do it, which would diminish (if not eliminate) its value as a competitive differentiator. If you keep in mind the five themes we see among the 1to1 Customer Champions and leverage the recommendations put forward in this entry, your firm will greatly increase its odds of being a successful, customer-focused, and financially rewarded company.
I hope this series has been of value to you – I would love to hear your own success stories.
Mark A. Ratekin
Sr. Vice President, Consulting Services