Digital technology and information – including “big data” – have changed the relationships between businesses and customers in ways that were almost unimaginable a generation ago. Your potential customers and clients know more about your business, and you have the potential to understand more about them than ever before.
“Good is the enemy of great.” — Jim Collins
The challenge for business leaders is to see this relationship from both sides: You need to understand how prospects discover, view, and interact with your brand and at the same time you have to find the group of consumers who are the most likely to respond to your brand’s competitive edge. Once this group is identified, you must communicate with them and care for them properly.
To help evaluate your positioning, you should ask thought-provoking questions.
Here are a few examples.
* Is your target market still relevant to your brand?
* Are there new audiences you should be talking to?
* Are you reaching customers in the way they want to be reached?
* Are you consistently delivering on customer expectations?
* How loyal are your customers? Do you really know?
* Is customer service and experience the cornerstone of your business or just rhetoric?
* How can you attract and retain customers for life?
* What kinds of customers don’t you want to do business with?
No matter what industry or business you’re in, you’re in the people business. And the balance of power has shifted. Customers have the power today.
Whether you’re B2B or B2C, customers know as much or more about your business, product, and service as you do. They research and comparison shop before they make buying decisions.
They read online reviews and ratings. In a survey of 1,200 U.S. consumers, 7, the global leader in customer engagement solutions, found that four in five (79 percent) consumers will take their business elsewhere within a week of experiencing poor customer service.
Companies of all sizes miss the mark when it comes to an understanding the growing power of the customer. According to PV Kannan, founder, and CEO of 7, consumers have more options than ever, so they don’t feel compelled to stay loyal to a given company when the customer experience falls short.
“The way customers engage with brands has dramatically shifted, yet many enterprises’ approach to customer service and sales is stuck in yesterday’s paradigm,” says Kannan. “For this reason, it’s more important than ever for brands to be where their customers are, and allow them to engage on their own terms.”
Talking about being a customer-centric company doesn’t make it so. Your plan must commit top leadership. You must establish metrics to measure the customer experience just as you would for any other aspect of your business.
To ensure you’re getting the results, start with a benchmark: Survey your customers about their experiences. Establish a customer advisory panel to get a sense of where you stand currently.
Another telling exercise is to ask your customers to describe your business in one word. Then make those words into an abstract visual with the least used being in small print and the most mentioned in much larger fonts.
Is this the way you want your company to be seen? Is it the way you thought your customers viewed you?
One number critically important to focus on when evaluating your success with customers is the lifetime value (LTV) of a customer. Are you retaining customers or are they moving in and out as if they were in a revolving door?
The simplest formula for how to work out LTV is to multiply three numbers: the value (net profit) of each sale to a customer, the number of sales made to a customer in a year, and the number of years a customer remains a customer (if a customer drops out sooner than one year, this would be a fraction).
For example, if you net $100 for each sale to a customer who makes 12 purchases in a year, and you retain the customer for 10 years, that customer’s lifetime value is $100 x 12 x 10 = $12,000.
Is your company focused on customer retention? Many organizations put a greater emphasis on acquiring new business than retaining existing customers. As a result, existing customers may feel ignored and unappreciated. They hold the perception that once the company has customers on board, it doesn’t need to pay close attention anymore. So those customers may start looking elsewhere. If there is a sense of complacency within your organization, you need to wake up your team and develop strategies that will turn your existing customers into raving fans.
In addition to focusing on your customers, don’t forget to get a read on your employees’ satisfaction.
It’s a fundamental truth that happy employees lead to happy customers. Every individual in your organization needs to recognize the importance of the customer experience and how they are responsible for the achievement. And you must emphasize that the reason you’re in business is the people you serve. Customers are the ultimate boss and they pay your salaries.
A company that builds a truly customer-centric culture is equipped to gain a competitive advantage that is hard to beat.
Have you read?
Susan Solovic’s new book is The One Percent Edge: Small Changes That Guarantee Relevance and Build Sustainable Success.
Marketing The Olympics VS. The Super Bowl: Some Key Differences by Michael Czinkota.
Family Businesses: A Promising Niche by Dr. Jyoti Kainth.
What happens when you lead others by serving them by Roy Osing.
Why a CEO Should be the Storyteller in Chief by Chuck Kent.
The Power of Community — How Phenomenal Leaders Inspire Their Teams, WOW Their Customers, and Make Bigger Profits by Howard Partridge.